A study by Tilburg University in the Netherlands found that people who wear brand name clothing are more likely to have a favor request fulfilled, a job recommended to them by another person, and garner more trust when soliciting for charity donations.
The Research Results
I’ll summarize an article from The Economist on the results of the study. Some interesting data points include:
- Social Status – Profile pictures of various men wearing a polo shirt were digitally altered with obvious brands. Researchers then asked people to rate each picture on 5-point scale for perceived social status. Those with the Lacoste shirt earned a 3.5 rating, whereas a Hilfiger branded shirt earned a 3.47 score. Pictures where the polo shirt had no logo scored 2.91, and a less expensive brand, Slazenger, scored 2.84 out of five.
- Wealth – Hilfiger apparently means wealth, winning this round with a 3.94 score, with Lacoste came in second at 3.4 out of 5. The unbranded shirt earned a rating of 2.78, whereas the less expensive brand earned an average score of 2.8.
- Survey Questions – A female assistant asked passers-by to fill out a random survey. Wearing a sweater with a Hilfiger logo, 52% of people agreed. The next day, with no logo, only 13% of people agreed to take the survey. Yep – four times as many people filled out the survey when she wore a Hilfiger sweater compared to a non-branded sweater.
- Charity Donations – People wearing designer shirts raised 34 cents on each answered door knock, compared to 19 cents for people wearing non-designer shirts.
- Job Interview – Two videos were captured of a single man applying for a job interview. In one video, the man wore a shirt with a logo, and in another, no logo was visible. Those who watched the interview in which the man wore a branded shirt rated him more suitable for the job, and recommended a salary 9% higher.
You Have to Earn it!
The researchers wanted to determine why a brand would be valuable, so they created a game to find out why branded clothing seemed to have the effect that it did. In a game where the researchers told participants that the shirts were given to the models by researchers, the shirts had no effect on how the game was played. However, those who were left to assume clothing was the choice of participants favored brand wearers by a 36% margin.
The results were consistent with most marks of quality and perceived worth. The expensive brands are something to be had only by the very best, so when participants knew that the clothing was distributed by the study organizers, the brand on the shirt had no real value. It was only when clothing was believed to be a choice of a particular individual wearing the shirt that the brand had any influence on human action.
Turn $60 into $160,657.62
The most interesting finding here is that branded clothes provide for salary offers 9% higher than people who do not wear obvious brands.
Assuming that a dress shirt is $40 for any random label, and a branded shirt is $100, we can run some numbers to see just how much more value comes with a branded shirt. We will assume an average starting salary of $40,000, with wage increases of 3% annually for the next 30 years.
A quick DCF calculation discounted by 4% per year finds that someone wearing an unbranded shirt with a starting offer of $40,000 would enjoy a career worth $1,785,084.56 in today’s dollars. The same person wearing a branded shirt, who receives a starting offer 9% higher ($43,600) would have a job worth $1,945,742.18.
Whoa! A simple $60 investment into a branded shirt for an interview provides for a difference of $160,657.62 in future income discounted back to today. Where else can you get a $160,657.62 return on a $60 investment?!
We obviously have to discount for the fact that the participants watching the videos were not hiring managers, nor necessarily involved in human resources. However, there is a case to be made that brands may have an even larger effect on a hiring manager. Someone with more expensive clothing may be less likely to accept a common job salary. Someone who is used to the more expensive things in life may demand more pay for the same job.
I have to say, I’m not all that surprised with the results. However, I do have a few lingering thoughts as well as a few concepts I find interesting:
- Brand transfer – Marketing has a lot of value; it turns $2 aluminum foil into $4 Reynold’s Wrap and $500 computers in $1,200 Macs. As branding is all about trust, it is interesting that perceived trust can be so easily and inexpensively transferred from a clothing manufacturer to an individual just by virtue of wearing a particular shirt design.
- Efficient Clothes Hypothesis – Markets are efficient in the aggregate, at least as efficient as they can be. It is only logical that younger people are more brand-centric given that they have the most to gain from any perceived increases in their own worth.
- A brand or no brand – A non-branded shirt scored third in social status, but fourth (last) in wealth. The difference between third and fourth place are not entirely statistically significant, but I find it interesting that a “lower price” brand beats out a plain polo. A brand – no matter the brand – is apparently a better sign of wealth.