The COVID-19 threat and luxury advertising

Abstract

The purpose of this research is to examine how the COVID-19 pandemic has impacted the luxury goods industry. The authors hypothesize that pandemic threats drive consumers toward luxury consumption to increase their perceptions of control. The article reports results of three experimental studies conducted in the United States. In Study 1, after participants read an article about COVID-19, they respond favorably to an advertisement for a luxury brand. The comparative control participants read an article about a tofu dish and respond less favorably to the luxury advertisement. Study 2 provides further evidence that perceived control acts as a mediator, while ruling out alternative explanations. Study 3 indicates that threat evokes luxury preferences only when advertisements for both luxury and nonluxury products use abstract messages, as opposed to concrete messages. The findings provide practical insights showing that the most effective advertising strategy for luxury brand managers is to use abstract rather than concrete messages for targeting consumers who feel highly threatened by COVID-19.