I have tried to apply this in my line of work – marketing, specifically communication. The application is fairly simple in say, ecommerce because the messaging/design can (and is) tweaked to play to the heuristics and biases the human mind has. Investments are a totally different beast altogether given there is rarely any instant gratification and definitely no gimmicks and giveaways. It also doesn’t help that our attention span as users is decreasing fast! Nudges ain’t easy. In that context, I have wondered if the two systems are too binary, and whether there is a middle path.

That’s why I was very intrigued when I came across a System 3. First, in this article, in which System 3 is when you say things that sound good but make no sense. It can get activated when you trust what someone tells you rather than figuring it out yourself. The article played at a meta level by using a statement in Daniel Kahneman’s recent book Noise as an example of System 3 in action! In this case, the book was appreciated by a long list of luminaries, but Rachael Meager pointed out a flaw in a section on causation and correlation, which clearly the set of luminaries hadn’t spotted, or assumed Kahneman et al knew more.

Celebrity endorsements, influencers mostly play on this. Most of them have little clue on the products they are endorsing, and/or are paid to say good things, but as Faris points out, when wielded well, it’s a great tool to create mental availability (the likelihood that a brand will come to an individual’s mind fluently in as many situations as possible), a necessary step to purchase. Cred’s celebrity ads are doing exactly this.

However, while mental availability is agreed upon, this also seemed like the halo effect (the tendency for positive impressions of a person, company, brand or product in one area to positively influence one’s opinion or feelings in other areas) or prestige bias (when individuals are more likely to imitate cultural models that are seen as having more prestige). Both of these seemed closer to System 1 because they are short cuts. Add to that, celebrities are expensive and pose inherent risks in the era of cancel culture.

So I searched a bit more and came upon this post that gave a different rendition in which System 3 decisions are made on the basis of our own imagination (mental simulation) of how possible futures will pan out. There are some good examples in there to highlight how it works. It has a bit of both the other systems – an attempt at rational prediction, but intrinsically guided by our biases. This is exactly what Faris’s example of the Extra Gum ad shows. Not celebrity driven, outside of the fantastic choice of Celine Dion’s song, but excellent insight, and captured the mood brilliantly.

But what both these perspectives agree on, and at least another one states, are that brands are built in System 3. “Customers use System 3 to imagine what your experience will feel like…When you advertise, you’re shaping the System 3 of the consumers so that they will respond.” By researching the granular vocabulary of the customer’s triggers, advertising and communication in general can create the ambience for a purchase decision in its favour. When a celebrity is presented well in the context of the brand universe, all the more better!

It isn’t rocket science, but as Faris brilliantly states in his post, Those of us without the publicity instincts of Goodby, Bogusky or Posh Spice will have to wrestle with our analytic minds, which tend to revert to rational models when we go to work even if we intellectually appreciate they aren’t what works. I have also seen enough examples of the other extreme – entertaining ads that don’t connect to the brand at any level. I think System 3 offers a middle path – based on good old insight, but packaged in a way that also creates mental availability.

Before we discuss the specific usage on social media, how exactly do brands become classified as luxury? According to the post above, “When linked to brands, it is characterized by a recognizable style, strong identity, high awareness, and enhanced emotional and symbolic associations. It evokes uniqueness and exclusivity, and is interpreted in products through high quality, controlled distribution and premium pricing”. I assume the above takes into the account the parameter of service – not just in the case of say, hospitality or other service luxury brands, but even regular luxury brands, since the overall experience (from the retail experience of shopping for the brand to post purchase service) is key to earning the tag of a luxury brand.

With regards to social media, I’d say that social media has this way of stripping the veneer, of removing the fluff around entities so that its reputation is made/broken basis its performance on the core value it provides. In fact, sometimes even the cost of ‘production’ is not taken into account, the audience expects things for free and the crowd makes its own sense of value for the product. (yes, I am referring to the interesting free vs paid debate) Wired has an excellent article titled ‘The Good Enough Revolution‘, where it takes examples from various sectors to show how, with advancing technology, consumers’ expectations from their purchases are changing drastically – the rise of the ‘good enough’ tools. While it is essentially attributed to the busy lives we lead now, the fact that it is also ideal for recessionary times is highlighted. From the article,

We now favor flexibility over high fidelity, convenience over features, quick and dirty over slow and polished. Having it here and now is more important than having it perfect. These changes run so deep and wide, they’re actually altering what we mean when we describe a product as “high-quality.”

Of course, there still is an audience that doesn’t live by these credos, but that’s perhaps not really a large number. One could argue that this was the only audience that mattered to luxury brands anyway, but If this trend catches on, then the entire premise of luxury branding becomes wobbly. PSFK has an interesting note on a Louis Vuitton Calabash – on mixing the notions of utility and luxury, and how the addition of a designer label on a commonplace item raises a question on the value of things. A lot of the luxury brand’s aura is through maintaining a perception among the audience, and keeping itself as an aspiration among potential consumers – couching utility in intangibles. This is not taking away anything from the quality of the product per se, but the entire concept of ‘brand’ is usually seen as a way to distinguish the product from similar products and take it to a level  above that of a commodity. A lot of communication these days is about the aura/show off value of the luxury brand than anything to do with the product superiority. In a way, its quite logical (and obvious) because if luxury brands focus on the utilitarian value of their product, they really wouldn’t get ahead. The counter point to this would be that the premium charged by the luxury brand is for the emotional high of using the brand, in addition to the (hopefully) superior quality that it provides. Does it mean that luxury brands would have to relook at the premiums they charge?

But having said all that, there are quite a few things that seem to point towards potential synergy between luxury brands and social media. One of the points that Jeremiah mentioned in his post is the usage of celebrity associations. Celebrities are now running rampant on social networks, and luxury brands have a good means of weaving themselves into the conversation, and increasing their aspiration value. Usage by a celebrity also gives them a context to kickstart conversations. Also, social media is about emotional connect and sharing. If much of a luxury brand’s aura is built on the emotional appeal, then it can use social media very well to its advantage. After all, what other medium offers such easy methods to spread some ‘show off’ value? I thought the Mercedes Benz idea of a closed network would be great if they allowed users at least partial portability of data to other networks. (to, rather than from) The ‘share’ aspect of social media will also help identify potential customers via existing ones. But most importantly, I feel the biggest use of social media (actually the web in general) for luxury brands is the audience data that is being generated on a regular basis, real time. It offers better segmenting and targeting opportunities, and while this is applicable to all brands, it is all the more important for luxury brands. This can be used for gaining more insights, encouraging sampling and so on.

It is definitely an interesting conundrum, but the web, thankfully has space for all kinds, I think. Will appreciate your thoughts.

until next time, the luxury of real time?