Around a month back met a friend who has moved into a new home and told me that after 2 weeks in the new home he decided to buy a refrigerator costing 1 lakh. Having known him for over 25 years this sort of spending seemed very unlike him.When asked he said his wife and mom wanted a refrigerator to be in line with the new house and were unwilling to settle for anything less than super premium item and he had to simply give in. The surprising aspect is that his wife and mother are also known to be very conservative but why did they end up buying a super expensive fridge? There is a phenomenon called as Diderot effect which makes people make choices which they would have not done otherwise and these choices are almost always preceded by a change in environment (in this case moving into a new home) or buying a new thing.
Who was Denise Diderot?
Denis Diderot is a famous French philosopher who was poor but was famous due to his work of Encyclopédie, one of the most comprehensive encyclopedias of the time. He wanted to get his daughter married in the year 1765 but had no money, Hearing about this situation Catherine the Great, the Empress of Russia gave him an offer to buy all his books at a princely sum of $5000 (the equivalent of $150,000 now) and then started his miseries. Based on his new found wealth he decided to buy himself an expensive scarlet gown for the wedding.After wearing the gown he started to feel that all possessions in his home did not go well with his scarlet gown, due to this he decided to upgrade his carpet with an expensive one from Damascus and then decorated his home with expensive sculptures and tables. Soon all his money was spent on these expensive items and he was back to his poor self. He decided to write down about his sudden urge to acquire new things in an essay. The cause of these reactive purchases was thus called Diderot effect in his honor as he was the first write down about this.
What causes the Diderot effect?
The Diderot effect in simple terms can be called as “the introduction of a new possession into a consumer’s existence will often result in a process of spiraling consumption”. In simple terms purchase of one new item often leads us to buy other items even though you may never have felt the urge to buy the those items otherwise. As an example, I decided to buy accessories like a protective cover, air freshener, phone charger inside my car, etc within the first few weeks of the purchase of the new car. Now after 2 years I never use any of those items and also never felt the need for it. What is causing this change in behavior when we buy new things?
The phenomenon happens because of two important things which are happening in the background and these explain the Diderot effect(orginally described here )
- Goods purchased by customers become part of their identity and tend to complement one another.
- The introduction of a new item which deviates from that identity can cause a spiral of consumption in an attempt to forge a new cohesive whole. The sense of identity also gets changed by a change in environment e.g new job, home, joining gym, etc. So the Diderot effect can also be triggered by a change in the environment.
At the sub-conscious level, the things which we use or own is part of our identity and you can relate to this because many people spend thousands of rupees to customize the look and feel of things which they use (car) or choose to buy a expensive bike to showcase their personality. Any new item added causes a shift in this identity and we would have to adjust ourselves to the new in identity. In the process of adjusting, we tend to go overboard and almost always end up buying stuff which is not needed.The identity shift also gets triggered when we move to a new place. The best example is of my friend who decided to buy an expensive refrigerator just so that it goes with his new home. In this case, the new home has become part of his identity and this caused him to go overboard. In summary, as we tend to go overboard every time we acquire new items which impact our identity.
How to prevent the Diderot effect ?
As the Diderot effect makes us spend more money than required and we need to find a way to control it. The simplest approach would be to prevent the start of the Diderot effect by not embarking on the purchase of a new item. I have been practicing an approach where I prevent impulsive buys by waiting for 2-3 weeks to buy a non-essential item.After 2 weeks if I still need the item I tend to purchase it else I don’t purchase the item. But this may not work for everyone and I believe the most practical way to handle this would be to add a wait time of 2 weeks after you buy a new item or move to a new environment. This way you would be clear of the useful items which are needed to adjust to your situation. The second approach which many folks have tried is considering every new purchase as a replacement by tending to give away something every time they buy something new. This sort of minimalism would help prevent Diderot effect from getting kick started.
As a marketer I think there are enough lessons for us to use the Diderot effect to our advantage to increase purchase probability by proposing new items or recommendations after the has bought a new thing. A similar approach is used by Amazon to recommend similar products bought by others when they send a confirmation email. These recommendations will have great conversions because of Diderot effect.
PS: I discovered the Diderot effect when reading about it in the Atomic Habits Book by James Clear.