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Predicting consumer preferences for luxury products may just have become easier. By listening to what people say when they test perfume — the quintessential luxury product — researchers have found that people who associate a scent with a personal experience are more likely to prefer it than those who react with generic commentary. This should apply to other luxury products as well.

Based on an interview with IÉSEG’s Barbara Slavich and Gwarlann De Kerviler and on “Self-referencing narratives to predict consumers’ preferences in the luxury industry: a longitudinal study,” by Caroline Ardelet (University of Paris Ouest Nanterre), Barbara Slavich, and Gwarlann De Kerviler (Journal of Business Research, 2015).

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Biographies

Barbara Slavich joined IÉSEG in 2010 and is an associate professor of management. She previously worked at Bocconi University and SDA Bocconi School of Management. She holds a PhD from Italy’s ESADE School of Management and University of Ca’Foscari, Venice.

Gwarlann De Kerviler joined IÉSEG in 2013 and is an assistant professor of marketing. She was previously a CRM Manager at Staples and a marketing manager at Danone. She holds a PhD from University of Paris Dauphine.

 

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Research method

This empirical study was conducted in a perfume store in France. It involved 529 female customers aged 20 to 50 who received random assignments to test a supposed Nina Ricci, Lancôme, or Chanel perfume. Fragrances were created by Firmenich to fit each brand’s olfactory identity. All participants engaged in a free association test, and the 464 who reacted neutrally or positively then filled out a 5-dimension evaluation and were contacted by phone after one week.

The luxury market is fundamentally different from other markets. Consumers base buying decisions largely on symbolic and hedonic value rather than on products’ functional components. While subjective features like beauty and pleasure have been shown to weigh heavily in luxury purchasing decisions, they remain difficult to measure.

Now, however, Caroline Ardelet (University of Paris Ouest Nanterre) and IÉSEG faculty members Barbara Slavich and Gwarlann De Kerviler’s study is filling this gap. By analyzing customers’ spontaneous comments when testing a luxury perfume, the researchers assessed how likely they were to use and keep the product. The study introduces a novel concept — the self-referencing narrative — and a new methodology for predicting customer preferences for luxury items.

An innovative, real-life methodology

Research team members Barbara Slavich and Gwarlann De Kerviler explain that consumer preferences are usually studied by presenting people with hypothetical situations, i.e., Would you buy X if Y or Z? “But we wanted to find out what really happens, so we went into a store to carry out our study.” The researchers presented women who had come to the store to shop with perfume samples and asked them to comment on them in order to assess their genuine preferences.

The study was doubly grounded in reality through a partnership with premium fragrance manufacturer Firmenich, who created three scents that legitimately represented three established luxury brands (Nina Ricci, Chanel, Lancôme). The research data consisted of people’s spontaneous comments in reaction to the perfumes. As neutrally as possible, shoppers were asked, “What does this perfume make you think of?” In listening to their response, a difference was discovered between commentaries featuring a personal story, as opposed to comments like “It smells like grass.”

The former was directly involved in greater product preference. After the in-store interview, participants were free to bring home perfume samples, provided they agreed to be phoned a week later. The time-lapse enabled the researchers to see that initial affinity endures. “First impressions are also last impressions,” Slavich says. “People reconfirmed choices made in the store.”

Decisive personal connection

Self-referencing narrative is a compelling new concept that has proven critical to understanding luxury purchase preferences. “Self-referencing narratives are personal accounts or descriptions of experiences,” De Kerviler explains. “After smelling a perfume, a person might say, ‘This scent is similar to the perfume my grandmother used to wear,’ or ‘The perfume reminds me of a day I spent with my friends last summer.’

In contrast, generic narratives are not specific to a person’s life or associated with particular events or experiences.” When it comes to luxury products, it appears that what matters most is a link between a person’s own life and the product. In accordance with this finding, professionals should be able to better predict luxury purchases by looking at whether or not products trigger personal commentary or emotion. Slavich adds, “People who mentioned specific people, places, and events then wanted to take the product home. On the contrary, people who simply liked the smell but did not respond with a personal account were rarely interested in doing so.”

Because self-referencing narratives are a type of storytelling, it is not surprising that luxury companies that are good storytellers tend to benefit from their skill. Consider the Guerlain campaign for Shalimar perfume, which involves a lengthy film that takes viewers to an exotic, magical world of princes and princesses. Since most people grew up with fairy tales, the film can be assumed to trigger a high percentage of personal, emotional associations that have helped boost sales even though the perfume itself is barely seen or mentioned.

Brand heritage as an intensifier

The third main finding from the study concerns brand heritage, which refers to a brand’s roots, founders, values, expertise, regional associations, and so on. Not only does a brand’s heritage create its uniqueness and provide a story, but it also acts as the glue that connects consumers’ personal narratives to a particular product and brand. Importantly, strong brand heritage was seen to intensify the impact of self-referencing narratives. Before going into stores, the researchers measured the perceived brand heritages of Chanel, Nina Ricci, and Lancôme, the brands that inspired the creation of the three perfumes used.

Brands were ranked according to the strength of their heritage(strongest to weakest, in the order given above), and study participants were told which brand had made the scent they were testing. When customers perceived a given brand’s heritage as strong, the researchers saw that personal narratives had an even greater impact on product preferences. De Kerviler comments, “That is why Chanel is doing the right thing in keeping the myth of Coco alive.”

“In luxury, as in most creative industries, to be understood and preferred, products should present two characteristics: familiarity and novelty. In movies, for example, familiarity is provided by a genre (i.e. western), and novelty by the uniqueness of a specific story,” Slavich adds. In this study, a scent’s ability to trigger personal memories or events provided the familiar component, while the original formula of the scent offered newness. The researchers had assumed there would be a strong link between self-referencing narratives and luxury product preferences, but now they have the proof. “We were able to produce objective measures for something whose value is symbolic (luxury) and fundamentally subjective (preference).”

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Practical Applications

Luxury marketers and companies can appreciate that the findings from this study should apply to any luxury product, not just perfume. “All creative industries must offer customers pleasure, distinction, and status,” say Slavich and De Kerviler. “But people are also looking for coherence with the brand identity and values.” Hence the need to get to know your customers intimately.

– Remember that first impressions are also final impressions.

– Offer consumers a blend of familiarity and novelty.

– Keep brand heritage alive. Convey authentic roots and demonstrate consistency with values.

– Create compelling stories and highlight links between the brand and customers’ personal experiences.

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