Those that know me well know me as “cheap”, and while there is some truth to that labeling, the reality is that I tend to belong in the middle of what I call the “cheap, value and luxury” spectrum.
My hypothesis is this: people fall, by and large, into one of 3 categories of consumer spending — Cheap, Quality and Luxury.
Those that fall into the cheap category do everything in their power to pay the lowest price for everything, with little to no regard for quality and other factors. Though they may not act this way for all purchases, they do so frequently.
The luxury category is the exact opposite. These people tend to spend much more than the other two categories on most purchases, placing a large emphasis on quality and branding. These individuals tend to make purchases based on implicit, rather than explicit value and favour intangibles like brand value and perceived popularity points. While they value quality, they lean towards legacy brand perception rather than outright build quality and reviews.
Finally, there is the value category, comprised of individuals that tend to spend the most time evaluating purchases and striving to strike a balance between quality and price. Value consumers perform additional research to find an optimal price vs. quality” point.
The value category is concerned with explicit benefits of one product over another. Some qualities they may focus on include: build quality, specifications, availability and price.
The reality is that few people fit perfectly into one section of the spectrum but tend to fall into one category more often than the others. I consider myself to fall into the middle category most of the time, spending a lot of time researching products and throwing branding and popularity out the window, but for smaller or less important purchases, I certainly lean towards the cheap category.
Where do you fall in the spectrum and why? Let me know in the comments below.
Shout out to 20somethingfinance for the inspiration for this post.