When luxury democratizes: Exploring the effects of luxury democratization, hedonic value and instrumental self-presentation on traditional luxury consumers’ behavioral intentions

Abstract

While traditional luxury consumers remain an important market segment, the upsurge of affluent aspirational middle class has led to luxury democratization creating a significant shift in the marketplace. However, academic research on the effects of luxury democratization is practically non-existent. Integrating the theories of network effects and impression management, we conceptualize and offer empirical support for the negative network effects of democratization on traditional luxury consumers’ purchase intentions. In study 1, survey data involving 202 traditional Spanish luxury consumers analyzed using SEM and PROCESS and in study 2 an experiment with 205 UK participants, we demonstrate the underlying mechanism of hedonic value that drives the negative effect of democratization. The results also show an important boundary condition through instrumental self-presentation. The study further contributes by developing items to measure luxury democratization. This research shows how luxury firms can develop better positioning strategies for managing the luxury democratization challenge.