Can Identity Signalling Explain Why People Choose Certain Brands?

People often choose products not only for what they do, but also for what they say about who they are. Someone might buy a luxury watch to express success, while another person chooses shoes made from recycled materials to reflect their environmental values. This behavior is known as Identity Signalling.

Research published in the Journal of Consumer Research suggests that shoppers use products to communicate their personal values and identity. Identity Signalling can influence purchasing decisions, so businesses that understand what matters to their customers can create products and messages that feel more relevant. “

How Brands Trigger Identity Signalling with Expensive Luxury Goods

Wealthy customers often buy premium products to express status and achievement. A business leader, for example, might wear a Rolex watch to signal success and earn respect from colleagues. This form of Identity Signalling helps drive demand for luxury goods.

Bain & Company reported that consumers spent €345 billion on personal luxury goods in 2022. An expensive gold watch can communicate wealth without a word. Luxury brands maintain premium prices and exclusivity to preserve this status appeal, producing their products in limited quantities.

Many shoppers choose environmentally friendly products to reflect their values. A young worker, for example, might carry a backpack made from recycled plastic to show support for sustainability. This kind of Identity Signalling can help drive demand for eco-conscious brands.

Research from New York University suggests that products marketed as sustainable grew 2.7 times faster than conventional products over a five-year period. A backpack made from recycled materials can signal environmental awareness to others, while helping sustainable businesses attract customers who care about protecting natural resources. “

Sports fans often wear team merchandise to show their loyalty and feel connected to other supporters. A baseball fan wearing a blue team hat, for example, can be recognized by fellow fans. This form of Identity Signalling can create an instant sense of belonging among strangers.

Research from PwC estimates that fans spend around $30 billion annually on licensed sports merchandise. Retailers such as Fanatics sell large volumes of team shirts and other apparel. Colorful logos turn simple cotton clothing into a way for fans to express their identity, making them willing to pay a premium for official merchandise. “

People sometimes choose technology products to express their identity and expertise. A software developer, for example, may buy the latest Apple laptop partly because the brand is respected among peers. This form of Identity Signalling can influence technology purchases.

Visible features, such as a recognizable logo, can shape how others perceive a device and its owner. When customers associate a technology brand with quality or technical skill, they may be willing to pay a premium. Companies use distinctive design and branding to make their products recognizable and strengthen their appeal. “

Shoppers sometimes choose food to express their values and lifestyle. Someone who buys vegan meat, for example, may want to reflect a commitment to health or animal welfare. This form of dietary Identity Signalling can influence grocery choices.

NielsenIQ has reported that plant-based food sales reached $7 billion. For some shoppers, choosing these products communicates their priorities to friends and family. By making plant-based options easy to find, grocery stores can serve customers looking for foods that align with their values. “

Drivers may choose electric vehicles partly to express their values and identity. Someone who buys a Tesla, for example, may want to signal an interest in modern technology and sustainability. This form of automotive Identity Signalling can influence car design and purchasing decisions.

Also read: Can Brand Partnerships Create More Value Than Going It Alone?

Electric vehicles often stand out through their quiet motors and distinctive styling. These features can make owners feel proud of their choice and attract attention from neighbors. By designing recognizable vehicles and investing in battery technology, automakers aim to appeal to buyers seeking both innovation and status.

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–Written by Rajnish Kumar, a copywriter and strategist with a background in fast-paced journalism, who explores the gap between what brands promise and how consumers actually behave.