The ability to offer customers extra luxe, a personalised service and a one-off experience is an effective way for brands to tap into the developing consumer mindset of spending more on the things that matter to them, while cutting back, often significantly, on those that do not.
Premiumisation is certainly not a new concept; previously it was driven by the consumer desire to demonstrate success in material ways. Now consumer priorities have changed and this in turn has shifted the premiumisation megatrend to be characterised by the tendency to be selective, to invest in fewer, better products and experiences, reining in the spending on things that don’t matter to them to free up the money for other things that do.The premiumisation megatrend is characterised by the tendency to be selective, to invest in fewer, better products and experiences, reining in the spending on things that don’t matter to free up the money for other things that do. Click To Tweet
Marie Kondo, champion of the KonMari method, has highlighted the benefits of decluttering. Her ‘less is more’ approach and the idea of simplifying your home to get rid of physical items that don’t bring joy into your life, has resonated with consumers who no longer see possessing quantities of material objects as either necessary or a measure of success.
A survey by VoucherCodes.co.uk of over 2,200 people found that those opting to save money by staying at home were doing so in order to afford life-enriching experiences, with two-thirds saying they would rather spend money on experiences than material possessions.
When it comes to purchasing items, consumers are preferring to spend money on things that are more meaningful. An example of this is the ‘pet pound’, which has soared as more people become pet parents, and elect to spend their hard-earned cash on their fur babies they.
But there is more to it than that. When it comes to products, quality now rules over quantity, and refraining from splurging on items that have less meaning has freed up cash to spend on a fewer, more luxurious products.
So why does this matter?
Luxe brands and small businesses have all benefited from this trend, which has seen premium products become more accessible to a broader clientele.
In the same way that big fashion brands produce keyrings for those unable to afford to splash out on a handbag, companies such as Smeg have created an opportunity for consumers. Visitors to the Smeg luxe London store might not be able to afford a FAB retro-style fridge, but they might be able to stretch to one of the company’s hugely successful range of small domestic appliances, and buy a coffee machine, kettle, ice-cream maker or toaster.
Personalisation is a big part of the premiumisation trend, with products and services tailored specifically to customers’ needs perceived as offering something unique and special.
Similarly, enabling customers to have an experience when visiting a retail outlet – or ‘retailtainment’ – also helps create a premium offering. House of Vans in London famously created an in-store skate park for customers, and Ikea once offered 100 competition winners to an in-store sleepover in their beautifully styled bedroom sets.
Brands that capitalise on premiumisation and give their customers the chance to acquire extra luxe and have a one-off experience at the same time are offering greater value and building lasting relationships.