Why people will inevitably buy the $17,000 Apple Watch even though it's barely different from the $350 version
Wrong.
People will splurge on the Apple Watch "Edition," the $10,000 - $17,000 version of the watch, the same device that costs $349 in the so-called "Sport" version, for several reasons. Most of them are psychological.
Here are a couple of the big ones:
It gives them a "luxury experience"
Author
To firmly establish the Edition as a luxury good, the company is being careful to use words and phrases that people already associate psychologically with high-end products, writes University of California consumer research psychologist Kit Yarrow in a recent post for Psychology Today.
At the Apple Watch launch, for example, Apple CEO Tim Cook described the Edition as "custom," "special," and, most importantly, "available in limited quantities." Even buying the Edition in the store, Cook said, would be "the ultimate experience."
Whether or not these words are true is beside the point, of course. Apple uses them to appeal to consumer's feelings. They "tend to ignite emotion," Yarrow writes, "and yet slip right by the more critical parts of our brains."
It makes them feel special
The idea that people wear and use high-end things to feel better than everyone else is actually born out by some pretty fascinating psychological research.
For one part of a multi-faceted study, for example, researchers had 160 men and women write about a time when they were out in public with either a branded luxury item (like a Dolce & Gabbana purse) or a branded non-luxury item (like a Gap sweater) and about a time when they were in private with either a branded luxury item or a branded non-luxury item.
For most of the participants, having the luxury item (but not the non-luxury one) was linked with a sense of pridefulness or snobbery whether they were in public or in private.
In other words, wearing or using something expensive makes us feel better than those around us, no matter where we are. Since the Edition is a watch, it's hard to imagine a place (other than the shower) where someone wouldn't wear it.
It makes them feel accomplished
AppleChristy Turlington trains with her Apple Watch.
Although people tend to feel snobbish and superior when they wear a pair of Seven jeans or use a Gucci bag, research suggests they buy these things for a slightly different reason.
For another part of the study above, the researchers had a different group of participants write about a time when they felt successful and accomplished and about a time when they felt snobbish and prideful. Afterwards, they had them say how much they wanted to buy a high-end good, like a Louis Vuitton belt, for example.
Most of the participants were far more likely to say they wanted to buy the luxury item after writing about a time when they felt accomplished, than they were after writing the story about feeling snobbish.
In other words, one of the reasons people buy luxury items is because they feel like they deserve them, Brent McFerran, an economics professor at Simon Fraser University and one of the authors of the study above, explains in a recent blog post for Psychology Today.
Splurging on the Edition, especially when virtually the same thing is available for far less money, is an easy way of achieving this goal.