The evolutionary psychology of luxury marketing

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Ed Woodcock of Aesop explores the psychology behind luxury goods

What do peacocks’ tails, the grooming of bonobos and a Hermès Birkin bag have in common?

They are each an instance of what evolutionary psychologists call an ‘index of fitness’.

An ‘index of fitness’ sounds complicated because it is. In essence, an index is how an individual signals his or her value to other individuals of their species as either social allies or a potential mate.

Each species has its own type of index, and some species have very specific ones. Peacock tails, for instance, are a clear indicator to a peahen of the male’s sexual attractiveness – bigger, flashier and more vivid spells. Phwoar.

Other species have more complex indices which give off social and political signals as well as mating ones. Bonobos will groom as many other apes in their troop as possible to show how politically astute they are. The more backs they scratch, the more back scratches (and other ‘favours’) they have owing, and the more status this implies.

So what about limited edition luxury handbags? Well, humans are a little more sophisticated, but maybe not as much as we like to think.

To explain how Birkins and other luxury goods work as indices of fitness, we need to take a longer detour into evolutionary psychology. What many indices have in common is that they show an individual’s command of excess or scarce resources.

Peacocks don’t need their tails to survive. Quite the opposite in fact. Likewise, successful bonobos groom and are groomed more than is strictly needed to control parasites. And humans don’t really need Birkin bags (however much some might protest). In short, luxury goods are one of many indices humans use to signal a person’s command of excess or scarce resources.

Now this is where it gets much trickier than peacock tails. What qualifies as attractive in humans can take many forms. Political power, intelligence, a good sense of humour (‘GSOH’) or creativity are all desirable traits, sometimes over and above physical beauty. But it can take a long time to demonstrate these qualities to potential mates or allies so we have also evolved to look out for shorthand signals – in other words, indices of fitness.

One index is conspicuously possessing more of the ‘stuff we value’. If we value gold then the more gold the better. But it could be cowrie shells or marble. This is why a lot of luxury is merely material ostentation. ‘Bling’ basically.

Another index of fitness are artefacts of a skill or creativity that others don’t possess, which is why nearly all luxury involves an element of craft.

Last but not least are symbols that signify the possession of rare knowledge or valuable reputational status, such as an MBA from Harvard or, in times gone by, an aristocratic title. With luxury goods the marque is shorthand for a brand’s reputational value, which explains why a Birkin isn’t a Birkin if it isn’t from Hermès.

In short, luxury goods and services are often a combination of the three main types of index: material ostentation, skilled craft and hard-to-acquire reputation.

Now, how does an evolutionary approach to understanding luxury help us with the marketing of it? Well, you will have noticed how the final category of index, reputational value, has no real material basis. While bling is ‘stuff’ and craft results in tangible things like watches or handbags, reputation is wholly in the mind – it is represented merely by a signifier. And this is where marketing comes in because it is marketing and PR (along with another intangibles, like service) that help create reputational value.

More specifically, it is often the stories we tell about a luxury brand that create its reputation. In fact, it is increasingly the source of value in luxury as ostentation and craft become less and less reliable indicators of true rarity. In essence, the more legendary a luxury product or brand, the more intangible value it acquires.

Trouble is, not all stories are equal. Some stories need to be made for general consumption. These are the stories that create the social capital that make a luxury brand a widely held store of value – you can’t flaunt a symbol, however discretely, if no one understands what you’re flaunting. The back-story behind a brand is often the foundation of its value. Chanel only makes proper sense if you know about Coco, the radical trendsetter and original ‘it girl’. Rolls-Royce manufactures large cars in valuable materials and with rare skill, yet it is its heritage (coach makers to long-gone aristocracy, presidents and royalty) which gives it its cachet – the kind that a brand with a less rich story, like say Lexus, cannot easily acquire. The more widely marketed these stories are to ‘fans’, the more social capital is created for customers. Advertising and content don’t necessarily need to tell this back-story, but it is key to creating social value.

But some stories are like the articles themselves – they need to be kept exclusive to remain luxury. Just like a luxury good loses value if it is too widely available, some stories are only valuable if they are in the possession of a handful of people. This is why luxury brands should invest in exclusive content just for customers. Luxury jeweller Boodles has invested in storytelling training for staff. This training provides them with stories – tales of provenance, design or the projected emotional journey of the piece. Used correctly they can turn a lifeless stone into a living object, adding a certain kind of romance which can only be felt in a Boodles store.

This distinction between storytelling for fans and storytelling for customers is crucial to the long- term health of luxury brands struggling to balance exclusivity with commerciality.

Entry-level luxury goods that drive commerciality, like perfume or sunglasses, depend on widely understood brand stories. But high-end luxury goods that maintain a brand’s reputation need their own exclusive stories to ensure these products remain truly luxurious. Exclusive experiences and service also play their part in maintaining reputational value, but these often serve to generate stories in themselves. Boodles collects stories of exceptional service that have become legendary among its customers. And Dolce & Gabbana’s Alta Moda shindig has generated stories that have become fashion lore.

What’s ultra-valuable about these ‘exclusive stories’ is the fact they are integrated into the customer’s own personal narrative – the story we tell ourselves. But ultimately, our personal stories end up being shared. Not only the thing itself, but a killer Instagram post or tomorrow’s dinner party badinage becomes a crucial index of fitness. Luxury isn’t just what you buy, it is how you express it, which means we can now add ‘great chat’ to our list of indices.

Luxury brands need stories now more than ever. The rarity that once enshrouded luxury brands is in retreat. Whereas once you had to visit a certain shop in the eighth arrondissement for that special something, luxury can now be bought with a click. In addition, the realm of what we think is essential grows larger every day. We now take for granted responsive technology, on-demand chauffeurs and ‘crafted’ products.

Luxury, like a peacock’s tail, should always be more than necessary – true luxury perhaps completely useless. If luxury brands are to maintain their richness, magic and allure, then they need to use the most powerful tool in their arsenal. After all, without a story a Ferrari is just well-engineered machine, a Birkin bag just exquisitely stitched leather. Stories are part of what makes us human and without them our luxury is about as highly evolved as picking a flea off a bonobo.

Ed Woodcock is director of narrative at Aesop.

This article was originally published in The Drum Network luxury special. You can get your hands on a copy here. To be featured in the next special focused on the charity sector, please contact stephen.young@thedrum.com.

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