Consumer Motivation and the Luxury Market – Lessons for Brands



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There's more than just a price tag to luxury. Discover how your brand can fuel consumer motivations to experience the finer things in life.

It’s no surprise that after a year of austerity, isolation, and uncertainty, consumers are moving forward with a taste for the finer things in life. Bentleys are selling like hotcakesvacation-home sales are soaring, and some tastemakers predict a Roaring 20’s revival filled with maximalism.

In biology, there’s a concept called homeostasis that describes how systems like our bodies and our nervous systems tend toward a balance. When that balance is tipped too far in one direction, the system overcompensates to restore the balance, often tipping the scale in the other direction before returning to normal.

This is what we are experiencing post-lockdown — a rapid push toward luxury and indulgence to overcompensate for the losses experienced in the past year. In line with homeostasis, this trend will inevitably fall back toward normal levels once we’ve gotten it out of our systems (or bank accounts).

This is what we are experiencing post-lockdown — a rapid push toward luxury and indulgence to overcompensate for the losses in the past year.

In 2020, luxury consumers — many of whom saw their wealth increase during the pandemic — were often unable to spend their discretionary funds on high-end experiences, and now have more cash than ever to drop on $20,000 cruise ship cabins and helicopter trips to the Hamptons.

Though most brands are not targeting the 1%, their conspicuous consumption signals an important trend. The consumer motivation behind luxury spending shares the same emotional and motivational roots as the average consumers’ buying behavior.

There’s more to luxury than a price tag: luxury is the promise that there will be no problems. Consumers with a range of budgets are willing to indulge for the guarantee that products and experiences will be well designed, enjoyable, and supported by excellent service.

For example, everyone who bought a Peloton in the past year knew they could get an exercise bike for cheaper, but they paid for a seamless experience that makes achieving their fitness goals easier; however, impeccable service comes at a cost, as Peloton saw wait times of up to 10 weeks during the peak of the pandemic.

As average consumers venture into the luxury waters post-lockdown, both high-end and more accessible brands should think about how they can best create a lasting relationship by identifying the features and benefits that allow consumers to treat themselves.

Are consumers buying your experience, or your product?

When looking for luxury, consumers expect both a high-quality product and an exclusive experience — but which one are they willing to pay more for?

The pandemic has created a unique opportunity to examine these separately and identify the features and benefits that are critical to the luxury experience.

For luxury gyms like Equinox, health concerns brought on by the pandemic resulted in changes to the club experience: while the gym floor remained the same, socially distant classes were harder to book and shower closures created fewer opportunities to indulge in fancy Kiehl’s products.

Contrasting the needs of consumers who stuck with your brand with those who decided the price was no longer worth it will help uncover exactly where to focus and build as the post-lockdown consumer landscape takes shape.

With many white-collar workers remaining at home, spaces like gyms could be reimagined by consumer needs and become social hubs or areas to de-stress rather than simply a place to work out.

If you have a pre-pandemic market segmentation, now is the time to aim for a refresh. A person-level market segmentation can reveal the features and benefits members and users are looking for while an occasion-based segmentation will uncover opportunities to understand consumer motivation and satisfy emerging consumer needs.

Trust is a key consumer motivation for luxury brands

Though luxury manifests differently with different types of consumers, it is built on a shared understanding and trust that paying a premium will result in something special.

Trust is built over time, but can be broken in an instant and will take more time to rebuild. Given the shortages and restrictions of the past year, it may be hard to trust a brand that promises “business as usual.”

To bring back the previous example, Peloton’s supply shortages started new customer relationships off on rocky footing and threatened their meteoric rise. They experienced this backlash because consumers trust luxury brands to make the changes and unpleasantries brought on by the pandemic as painless as possible; however, Peloton was transparent about the challenges and continued to provide an exclusive experience for current customers, ensuring that demand for the product would remain consistent.

To effectively build and maintain consumer trust, focus on the areas where you can confidently and consistently deliver and honestly acknowledge the areas that are still being rebuilt.

For example, Disney’s theme parks have leaned into their expertise in creating an immersive customer experience to make post-lockdown vacations as much of an escape as possible. While Disney might not be the first brand you associate with luxury, families choose a trip to Disney over more exotic locales because they can count on the brand to create an effortless, end-to-end experience that delights the entire family.

To deliver quality high-end products and experiences, focus on the fundamental needs important to your consumers and the role your brand can play in helping them meet those needs.

Use the appeal of luxury to expand your audience without losing your shine

As high-end products and services enjoy a boost, brands in this space must identify when and how to transform an influx in consumers into a lasting strategy:

  • To bring in new audiences, many high-end brands create products and experiences at a lower price-point to entice consumers that want the cachet for less cash.
  • To identify opportunities to deliver a high-end experience, consider combining behavioral science techniques with an occasion-based segmentation or other attitudinal research to deeply understand what motivates your current and potential consumers, how your brand meets their needs, and how strongly they trust and connect with your brand.


But be forewarned: accessibility is a risky strategy and may alienate your top-dollar consumers.

Brands like Starbucks, Apple, and Sephora have managed to “toe the line” between accessible and exclusive by offering a range of experiences and refusing to compromise on the essentials of their brand.

Starbucks, for example, created modern American coffee culture by bringing fancy, European-inspired drinks to the masses. As they grew, they managed to maintain an air of status and exclusivity with novelty drinks and indulgent pastries even as they began popping up on every corner.

Today, Starbucks continues to draw in high-end audiences with their Reserve brand — a line of expansive stores that boast $17 coffee flights and exclusive cocktails. Starbucks has deftly maneuvered its brand to be both exclusive and accessible, ensuring consumers at all price points have an opportunity to indulge.

The luxury market’s understanding of consumer motivation can help all brands

Given the diverse needs that bring consumers to each category, indulgence manifests itself differently across categories.

While some consumers may indulge with a showy Louis Vuitton bag, others may splurge on an upgraded home theater or a vacation package that removes all the guesswork from their next adventure.

This means that almost every brand has the power to help their consumers indulge in the “Roaring 2020s” if they ask the right questions — and tap into the needs that drive consumers at every price.