The ‘Unique’ Challenging of Promoting Luxury Purchases with Word of Mouth Recommendations

Although consumers’ word-of-mouth (WOM) recommendations are considered one of the most effective forms of social influence, the present work demonstrates a domain where they are less influential: luxury goods. Across multiple laboratory experiments, a field experiment, and two archival datasets, WOM recommendations – whether communicated informally or left as a review – have a less positive influence on consumers’ attitudes, product choice, and willingness to pay for luxury relative to non-luxury goods. We further show that the effect in part emerges because WOM recommendations can reduce feelings of uniqueness associated with the product or service, blunting these recommendations’ positive influence in domains where uniqueness is valued, like luxury goods. In identifying the role of uniqueness, we further provide theory-based boundary conditions for when the positive influence of WOM recommendations is restored. Altogether, this research offers a novel perspective on the impact and inferences of WOM recommendations, and it expands understanding of the factors that influence consumers’ attitudes and actions toward luxury goods.