Mixed signals? Decoding luxury consumption in the workplace

Abstract

The present research focuses on luxury (vs. non-luxury) consumption in a workplace setting, a social environment integral to consumers’ everyday life, and theorizes that interpersonal inferences based upon luxury (vs. non-luxury) consumption cues will depend upon relative status in the workplace (e.g., managers vs. employees). Across five studies, we show that (i) luxury (vs. non-luxury) consumption by higher-status consumers has negative effects on observers’ reactions due to inferences of lack of warmth; whereas (ii) luxury (vs. non-luxury) consumption by lower-status consumers has positive effects on observers’ reactions due to inferences of competence. We further explore how this reversal and the underlying inferential mechanism are altered by observer characteristics (implicit self-theories, employee/investor emphasis on warmth/competence) and signal characteristics (luxury brand prominence, impression motive cues). Together, our findings demonstrate how the mixed signals of luxury consumption are interpreted in the workplace, with implications for consumers, marketers, and the workplace itself.