Posted by While today’s consumers may be feeling reticent about making big ticket purchases, the practice of “virtuous spending”—buying something that’s outrageously priced but good for you in some way—is booming.
If you can call it self-care, you can justify the price. If it’s good for you, if it signals virtue in some form, go ahead and ring it up. And consumers are doing just that. Virtuous spending is why affluent consumers are foregoing splurges on items like designer handbags in favor of premium groceries. $22 collagen mushroom smoothies, anyone?
The psychology behind what’s coined today as virtuous spending isn’t a new phenomenon. It’s based on the knee-jerk reaction consumers take when there are bigger events they can’t control—so they buy things for “good reasons” that make them feel in control, at least over small things in life.
Estee Lauder reported this phenomenon shortly after September 11th in 2001. The company referred to it as the “lipstick index,” noting sales of lipstick rose markedly after the attacks. At the time, psychologists called it “compensatory consumption.” Consumers couldn’t control world events but they could darn well have great lipstick.
Today the “lipstick index” has found a new home in virtuous spending, especially pertaining to premium foods or wellness purchases. When you call a $12 chocolate bar “self-care,” it becomes a virtuous purchase. If there’s an organic label or sustainability story behind it, even better, which absolves any guilt over the inflated price tag.
Another influential factor plays into today’s virtuous purchasing, and that’s the visibility of the purchase. Premium groceries and health drinks can be just as much about social media as they are about eating healthy.
Social media merely amplifies the trend. When you post a photo or video of your locally sourced organic meal, you define yourself as someone who values wellness, sustainability, and supports your local farmer. Reactions will be far more affirming to such a post than one with your new designer handbag.
It’s telling that just one YouTube video of a grocery haul from Erewhon (a trendy, organic grocery chain in LA that’s popular with celebrities for its wellness products) garnered more than 14 million views.
Even as Louis Vuitton and Dior are seeing profits decline, virtuous purchases are thriving. As a brand, if you can attach your product or service to wellness or virtue, you may have struck marketing gold. At least for now. Read the full article.