How Conservatives and Liberals Buy Luxury Goods

Listen to the authors present their findings (source: December 2018 JM Webinar)

Is there such a thing as Rolex Republicans? In our new study, we say the answer is decidedly yes.

Our research team analyzed the luxury goods market, which notched $262 billion in sales in 2017, to understand an under-explored trend—how political ideology influences the purchase of high-end goods.

While marketers spend tens of millions trying to trigger aspirational buying, chances are they either don’t target consumers’ political aspirations or do so delicately. There’s a good reason—doing so could antagonize prospective buyers, with uncertain rewards. Witness athletic goods manufacturer Nike’s move to hire Colin Kaepernick as the face of its new campaign. While the company earned extensive media coverage and is experiencing a sales rebound, the move polarized other groups, such as investors. 

Yet marketers may want to take note of our study, which investigates how political ideology, such as being conservative or liberal, affects buying patterns when individuals either want to maintain status or advance it. Since luxury goods is a hyper-competitive market, marketers are continually seeking ways to expand their customer base, engage with customers, and activate emotional buying triggers.

We hypothesized that since ideology shapes views about social hierarchy, it would also influence consumption behaviors related to social hierarchy. We further hypothesized that conservatives, who seek social stability, would have a greater desire for luxury goods when their status maintenance goals were activated. This study is different from past research that focuses on status maximizing as a single objective by recognizing that it has two parts: status maintenance and status advancement. However, it builds on prior research finding that conservatives differentiate themselves through products that signal they are better than others (vertical signaling), whereas liberals differentiate themselves through products that signal their uniqueness (horizontal signaling). In other words, Rolex Republican, meet Lululemon Liberal.

We conducted six studies in the U.S. market to test and validate our hypotheses. Key findings include:

• Conservatives view status maintenance as more important than liberals.
• Conservatives prefer luxury goods more than liberals when they seek to maintain social status (e.g., when their current status is high), but this behavior does not occur in the absence of a status goal or when a status advancement goal is activated. 
  
• Conservatives with high-status positions increased luxury goods purchases, regardless of whether they attained the position via income or education.
• When conservatives are temporarily made to think about maintaining social status (e.g., via print ad message), they desired luxury goods more than liberals. 
  

In the first study, we analyzed 21,999 consumers who bought luxury cars between October 2011 and September 2012. Of the buyers, 33% identified themselves as Republicans, 31% as Democrats, and 36% did not disclose their political affiliation.

Republicans with high socioeconomic status (SES) were 9.8% more likely to purchase a luxury car than their high-SES Democrat peers. Thus, a luxury car seller could expect to gain a 14.45% increase in sales targeting high-SES Republications than high-SES Democrats.  Subsequent studies focused on different products, including high-fashion clothing, eyewear, and headphones, validating these overall findings.

Our research empowers marketers to target consumers by political ideology, deepening their segmentation strategies for higher sales and profitability. For example, brands could run targeted marketing campaigns on conservative media platforms (e.g., Fox News); in conservative geographies (e.g., Texas); or online, targeting consumers with conservative digital footprints. If brands do not currently emphasize status maintenance messages, they could change communications to resonate with high-SES conservatives. For example, a message such as Rolex’s “Class is forever,” might motivate high-SES conservatives more than Aston Martin’s claim that cars will “add value” to their lives.

Many brands will be willing to go all-in on their desired demographic. For example, Jeep, the car most desired by Democrats, only sponsors left-leaning media. Others will likely need to toe a more nuanced line to drive sales with key demographics, without alienating others. While it may be more profitable to sell luxury goods to Rolex Republicans, it is likely that Lululemon Liberals also contribute to the bottom line.

Read the full article.

From: Jeehye Christine Kim, Brian Park, and David Dubois, “How Consumers’ Political Ideology and Status-Maintenance Goals Interact to Share Their Desire for Luxury Goods,” Journal of Marketing, 82 (November).

Go to the Journal of Marketing​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​