At a recent TED conference, psychologist Daniel Kahneman, Nobel Prize winner and one of the founders of behavioral economics, gave a talk on why our experiences and our memories can be so different. His concept provides important insights about all consumers, but especially for those who purchase luxury brands.
This distinction between experience and memory is especially important as related to luxury brands. Unlike supermarket products and neighborhood restaurants, for which price, utility, and availability are important; the vital ingredient for success in luxury product and service segments is consumer experience.
Most consumers have a list of things they would like to purchase. However, affluent consumers are more interested in new and better experiences. Across all categories, Sacks’ research reveals that the affluent are looking for deeper and more meaningful experiences in their interactions with the products and services they buy. They view these experiences as enhancing their day-to-day living as well as contributing to the long-term quality of their lives.
The lesson for luxury goods marketers is that they need to satisfy the needs of the Experiencing Self so that consumers are drawn to them; while they also provide experiential change that the Remembering Self can use to create memories which will bring those consumers back again.
Kahneman made the following distinction about how experience and memory affect our future behavior: “We actually don’t choose between experiences, we choose between memories of experiences. And even when we think about the future, we don’t think of our future normally as experiences. We think of our future as anticipated memories.”