When Retailers Of Luxury Items Partner With A Charity, Sales Jump Through The Roof

Posted: Dec 14 2015, 8:43am CST | by , in News | Latest Business News


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Researchers just found out that purchasers of high luxury items often feel guilty about their purchases, but feel less guilty if the purchase is associated with a charity fund. In a study titled “Gilt and Guilt: Should Luxury and Charity Partner at the Point of Sale?” the researchers established proofs that retail sales jump through the roof when high luxury items are linked to charity agencies or a social cause.

"A lot of people like to buy luxury but feel a little guilty about it," stated co-author Henrik Hagtvedt, Associate Professor of Marketing at the Carroll School of Business at Boston College. "So what we found is that if there's a way to remove that guilt, people will be more likely to go ahead and make the purchase. One way to do that is to collaborate with a charity."

In a research study to be published in the Journal of Retailing, the researchers observed that customers are confronted with assessing the justification of a high cost of a product, but they accept the justification to buy the luxury brand once they understand at the point of sales that it is linked to a charity organization.

Some social scientists think that dazzling customers with the grandeur of luxury in retail spaces would help promote the charity aspect of an expensive product brand, but Professor Vanessa Patrick, a Hagtvedt and Marketing expert at C.T. Bauer College of Business at the University of Houston disagrees, stating that presenting customers with a luxury product’s link to a charity cause at the point of sales or cash register is the best way to up sales.

"At this pre-purchase stage of the decision cycle, consumers are often looking for a reason to buy or not to buy," said Professor Patrick. "Charity partnerships may not fit perfectly with a dazzling retail display, but they can help justify a desirable purchase."

During the research, the authors saw that 47% of customers felt uneasy about purchasing luxury items but “often seek out opportunities to justify the indulgence – a license to consume.”

During the study, 342 college students and adults were asked to buy a Godiva luxury brand or M&M’s value brand. About 47% of the participants went for Godiva chocolates brand because no mention whatsoever of a charity was made; but when they were informed that Godiva luxury chocolate was sold because of a partnership with the World Wildlife Fund, the number of purchases rose to 78%.

The same experiment was repeated two other times with various luxury items such as Rolex watches, high-end jeans and other luxury items, the results remain the same – more luxury sales was recorded because the consumers possibly felt justified by the link to a social cause.

"The consumer sees that some of this money is going to a good cause, and that diminishes the guilt," the researchers said. "In other words, it makes the consumer feel better and removes an impediment to purchase (luxury brands)."

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The Author

<a href="/latest_stories/all/all/52" rel="author">Charles I. Omedo</a>
Charles is covering the latest discoveries in science and health as well as new developments in technology. He is the Chief Editor or Intel-News.




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