💰 It costs more, so it must be better
Hey Fam,
I’ve done it too. I’ve bought the expensive wine, chosen the pricier phone, and purchased the designer label ’cause expensive products outperform their cheaper counterparts, right?
Let’s explore this costly assumption ’cause, well, it costs you.
⏱ Today’s newsletter is 743 words, 4 minutes.
1 big thing: How price signals quality
👖 It probably started with pantyhose. In 1949 a hosiery retailer went rogue and raised prices from $1.00 to $1.14 and made a killing. The higher price apparently “suggested higher value” to the consumer. The Journal of Marketing found this anecdotal evidence to be the opposite of common sense. Yeah, weird human behavior has entered the chat.
❓ What’s going on? We often use shortcuts to make decisions. Having rules preprogrammed in our brains makes it easier, faster, and far more entertaining when choosing to buy one thing over another.
- The Appeal to Money Fallacy is likely at play, where a product’s price unconsciously influences our expectations of its quality or performance.
⚙️ How does it work? Thanks to this phenomenon we often believe that a lower-priced product has inferior quality when compared to the more expensive option. When faced with multiple choices, it’s easier and less mentally exhausting to pick “the best” and avoid “the worst” by going on price.
❗️ Why it matters: Price isn’t integral to performance or quality. A lot of our purchasing decisions are made thanks to non-price information from advertising. Luxury brands are masters at selling quality and prestige based on price.
- Price is often a poor proxy for quality. My post on Generic vs. Brand OTC medications shows the cheaper choice can be the winner.
➡️ Bottom line: Many of us unconsciously associate price with quality without concrete information to back it up! You could easily be missing out on something as good, if not better, by looking past price to save money.
2. Which luxury clothing brands are worth the money?
🧥 Is a Burberry trench coat worth $2,500 bucks? What about a $5,000 Chanel purse? I don’t know much about Versace, Dolce & Gabbana, Balenciaga, or Prada but I’m sure they’re a little pricey too.
❓ What’s going on: Lifestyle site The List picked up my viral Canada Goose post ’cause I asked the same question.
“Financial journalist Kerry K. Taylor noted the brand is one of celebrity inflation, and that its success can be boiled down to marketing. Simply put, “It’s too expensive, not worth the cost … [and] you can buy a comparable coat for less.” The possible animal cruelty is an issue too.
✅ The Take: The List gave most brands a big ‘NO’ ’cause they felt the price didn’t reflect the so-called quality. But a big YES was bestowed on picking up a few wardrobe pieces through the secondhand economy.
➡️ Bottom Line: Call it what you will – used clothing, resale luxury, circular market – the truth is many of these brands can be purchased secondhand for a fraction of the cost through a growing number of resale sites. I’ve got a resale Burberry trench with the tags still on. 🙂
3. 📈 Charted: Secondhand is a global phenomenon
Online thrifting site ThredUP reports that the secondhand economy saw a record 32% growth in 2021.
- Resale could grow 16X faster than the broader retail clothing sector by 2026.
- Technology and online marketplaces are consumer favorites for finding that high fashion frock for less.
- Closet Cleanouts were popular during the pandemic and continue to connect sellers with buyers.
🪐 Planet perfect? TrendUP says “circular business practices cut emissions, reduce primary resource use, minimise waste, and create a more accessible economy for all.”
➡️ Bottom Line: I’m still chuffed I bought a resale Burberry trench with the tags still on. 🙂 I highly recommend the circular economy for most things, but please buy your 👙 knickers new! OK?
4. 🌎 Around the world
🇨🇦 Clothing rentals popular for special occasions (CTV News)
🇺🇸 Shein’s cheap fast fashion is expensive (Vox)
🇦🇺 Australians can buy refurbished tech and sell later (The Guardian)
5. ✅ Check out my closet
❤️ I shared my love for quality stuff that lasts the test of time on TikTok. My blue Doc Martens (1990s) and my Victoria Beckham dress (resale) make the cut. Take a sneak peek and subscribe, if you’re into talking money on TikTok.
As always,
❤️ Love love love,
Kerry