If one person's trash is another person's treasure, it stands to reason that the concept of luxury is also in the eye of the beholder. In fact, perhaps more than anything else, these days, consumers lead with their hearts and egos when it comes to spending.
The emotional desire to both enjoy experiences and share them is what drives people to spend, especially during the holiday season. In fact, consumers have a real need to enjoy the “experience” of owning something, even more than the goods and services themselves.
“Online we see it every day. Everyone else has new cars and new clothes and they take fancy vacations. You think, ‘I want all of that,’” suggests Ted Jenkin, an East Windsor native who is CEO of oXYGen Financial, an Atlanta-based financial services company, and an oft-featured expert on CNN Headline News. “So, whether you can afford it or not, your behavior is driven by the need to keep up. And, once you have something, you can’t wait to share the experience of owning it.”
Ed King, co-founder of The HighStreet Collective, a retail innovation marketing agency, is hyper-focused on the psychology of today’s shoppers. In fact, he coined a term for them: ACES.
“ACES (Addictively Connected, Experience-seeking Shoppers) transcend traditional generational boundaries,” King says. “ACES crave an intuitive, engaging, human shopping experience. Like the generations before them, they look at shopping as visceral, emotional and fun. Deep down, there is something driving them to ‘experience shop.’”
Jenkin says today’s consumers, specifically Gen Xers and millennials (also known as Generation Y), believe “value comes from experiences.”
“Anything that provides an experience — concerts, sporting events, technology, vacations — are the things consumers are most willing to spend money on,” Jenkin says. “And, if you can share that experience on social media, it’s a home run.”
King says experiential shopping goes beyond Gen X or Gen Y. After conducting considerable research, King says today’s luxury buyers, or ACES, can be categorized by something far beyond age, wealth or power.
While some might say that the “human” side of shopping sped down the information superhighway long ago in favor of quick-fix cybershopping, King begs to differ. Even the act of shopping has become a sought-after experience, whether in-store or online.
“In stores, ACES are focused on the experience of shopping. They want to have a unique experience based on a sales associate who walks them through the store and provides personalized service,” King says.
However, online, people are looking for a similar experience. Anytime a company is able to make the online shopper feel special, the same emotions apply.
“If there is something you can do to give the consumer a nod that makes them feel they have something that the other guy doesn’t, they will be more compelled to buy. ACES are looking for personalized, customized shopping experiences,” King suggests.
A recent Investopedia article, “The Psychology Behind Why People Buy Luxury Goods,” points to the “strong emotions that we attach to expensive material goods.” Moreover, it’s not about whether people can afford the purchases; people’s decision making around buying luxury items is directly proportionate to their ability to “show off to or gain acceptance from others” as well as “reward ourselves for an accomplishment.”
Jenkin couldn’t agree more. In fact, consider all that psychology and add in another aspect for good measure, he says.
“All of this spending behavior is driven by social media. People are unconsciously seeing everyone else on social media living the Life of Riley,” he explains. “You feel the need to reward yourself more and more because you think everyone else is getting constantly rewarded. And once you reward yourself, you need to share it with the world.”
According to King, ACES indeed are focused on “Instagrammable moments.” They want to be able to share their stories — not only that they’ve acquired something but they are driven to talk about how they’ve acquired them.
“People want to be part of a story. They want to know where things come from; they want to know pedigree. They want one-of-a-kind things that provide unique experiences,” he explains. “If a product makes a consumer feel special, especially if it’s one of one available or they are the first to have it and be able to share it on social media, they want it.”
And, the experts conclude, cost is not a primary concern.
The truth is, says Jenkin, prior generations of spenders – baby boomers and their predecessors — had a “save today to buy tomorrow” philosophy. Not anymore.
“Today, people are seeing their parents struggling with retirement,” explains Jenkin. “They are seeing themselves as either having to work forever or as fearful of what their financial situation will be tomorrow. Therefore, they figure they might as well spend today.”