Luxury-charity partnerships can boost retail sales

Consumers are more likely to buy luxury brands when these brands highlight partnerships with charity organisations at the point of sale, new research has found.

"A lot of people like to buy luxury but feel a little guilty about it," said study co-author Henrik Hagtvedt, associate professor of marketing with the Carroll School of Business at Boston College in the US.

"So what we found is that if there is 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," Hagtvedt noted.

The study pointed out that 47 per cent of consumers feel guilty about luxury consumption and "often seek out opportunities to justify the indulgence - a license to consume."

The authors conducted three experiments with 342 college students and adults to support their insights. In one study, participants could purchase either a luxury brand (Godiva) or a value brand (M&M's).

Without any mention of charity, 47 percent chose to purchase the luxury brand. However, when participants were told that the Godiva chocolates were made and sold in association with the World Wildlife Fund, the choice of Godiva jumped to 78 percent.

Follow-up experiments demonstrated that the willingness to purchase luxury products increased because the association with charity diminished the participants' feelings of guilt for purchasing a luxury product.

The same pattern emerged whether the luxury products were chocolates, high-end jeans, or Rolex watches. "The consumer sees that some of this money is going to a good cause, and that diminishes the guilt," Hagtvedt said.