Retailers Rethink Tactics, Seeing Shame Over Splurging as a Barrier to Recovery
By CHRISTINA PASSARIELLO
In the past year, the guilty pleasure of shopping has turned to plain old guilt.
Guilt has always been part of the shopping experience. But retail executives say it has become such an overriding emotion among shoppers since the economic crisis set in last year that it is delaying the recovery of the luxury-goods industry. Shoppers are suffering from “luxury shame,” consulting group Bain & Co. said in a research report earlier this week.
Right now, guilt is the single biggest problem in the way of getting people to shop again, said one executive of a European luxury powerhouse—although he declined to be identified for fear of sounding too negative about his outlook.
“Guilt has really increased in the last year,” says Martin Lindstrom, a brand strategist and author of “Buyology: Truth and Lies About Why We Buy.” “It can hamper any other good feelings” about shopping, he says.
Now some luxury brands are emphasizing marketing tactics that they hope will push away the guilt and reboot consumers’ desire to spend. That can mean touting a special justification for splurging—profits are channeled to a charity, for instance—or offering novel shopping experiences that can make people forget their guilt.
“It used to be about keeping up with the Joneses, and now it’s about outsaving the Joneses,” says Alexis Maybank, the co-founder of Gilt Groupe, which organizes online, by-invitation-only 36-hour sales of high-end merchandise from labels such as Burberry and Matthew Williamson. “We need to encourage people to get excited about fashion.” (The double entendre in her company’s name dates from an era—2007—when the guilt that went with shopping was far less disruptive.)
Browsing and buying release a variety of emotions. Selecting clothes and trying them on produces a high. When shopping feels good, that’s the dopamine in your brain, the same euphoria that eating chocolate can generate.
But guilt sets in quickly. “It’s not very strong at the beginning but increases when you swipe your credit card through the credit-card reader,” says Mr. Lindstrom, who conducted three years of studies in neuromarketing—hooking 2,000 people up to sensors to monitor the brain’s response to ads and brands. Guilt flashes up in the prefrontal cortex—the same reaction generated in a smoker who has finished a cigarette.
Guilt is what Carolyn Hsu, founder of The Daily Obsession, a shopping blog, felt after her purchase of a Tod’s bag at the beginning of the year. It was one-of-a-kind, she was told at the private luxury sale she attended. She decided to pay more than $1,000 for the large aubergine-colored bag, driven by the fear that she would never find the bag again.
“I try not to have those moments anymore,” says the 24-year-old, who also works in marketing. “I still have [the bag], but it hides in the back of my closet.”
Guilt is running so high these days that many people are simply not going into stores in order to avoid the temptation to buy, retail executives say. Shoppers are steering clear of the usual shopping zones, says Andrea Ciccoli, the administrator for Italian fashion group Ittierre SpA, the owner of Gianfranco Ferre and the licensee of labels such as Just Cavalli and John Galliano.
In response, some brands are trying to catch consumers off-guard with new outlets for selling. Ittierre is considering having some brands open pop-up stores—boutiques that exist for a few weeks or months—in unexpected parts of European and U.S. cities that aren’t traditional luxury shopping districts. The idea is that pop-ups may not activate the psychological barriers that prevent shoppers from entering traditional stores.
Of course, many brands have used pop-ups in recent years to create buzz and test ideas. But the idea has new currency as a way to short-circuit guilt. “People are so disciplined, their super-ego tells them not to buy, and then they don’t buy,” says Mr. Ciccoli.
Encouraging Internet shopping, as many brands have been doing, can also help break old shopping habits. “Luxury shame”—epitomized by the showy act of walking out of a fancy store with a big shopping bag—is one of the main reasons for the estimated 20% jump in online luxury sales this year, Bain & Co. says.
Online shopping involves different consumer behavior, says Gilt’s Ms. Maybank. Instead of planning a chunk of time around going to the store, “you take five minutes out at a specific moment of the day to get the things you need [online],” she says.
Another tactic for taking some of the guilt out of shopping—offering a charitable-giving component—is gaining traction as well, especially ahead of the holiday shopping season, when people tend to feel the most pressure to donate. Shoe brand Cole Haan recently sponsored a typical promotion: Get a 15% discount on a new pair of shoes when you donate an old pair to a designated charity.
Such incentives could help with “the argument shoppers have with themselves,” says Sue Phillips, the London-based chief executive of consumer-research firm Synovate Censydiam.
One of the hottest new stores in Paris this year, Merci, fuses fashion with philanthropy. The store’s light, loft-like space is as trendy as that of other concept stores, selling apparel from brands such as Stella McCartney, special versions of Annick Goutal perfume, flowers and used books. The difference is that all of the profits, after operating costs are paid, go to children’s charities. Last month, Merci—which was founded by Marie-France Cohen as a way of giving back after she sold luxury children’s-clothing label Bonpoint—opened a temporary one-month shop in New York with help from the Gap.
The charitable argument may give consumers another reason to visit the store, Ms. Cohen says, although she believes “a consumer who is tempted by an item goes back to being just a consumer.”
Other companies are putting more emphasis on the “guilt-free shopping” that is said to come with buying environmentally safe products. Stores are even offering to ameliorate the global problems of waste and—interestingly—overconsumption. Last year, upscale Swedish clothing brand Filippa K opened a secondhand store in Stockholm that sells used clothes of its own brand for at least 50% off.
Anders Wiberg, who oversees the boutique and is the brand’s supply-chain director, says the boutique has boosted sales of the current collections. “The customer looks at us as taking more action,” he says.
—Christina Binkley will return next week.
Write to Christina Passariello at email@example.com