I remember learning about "trading up" when I worked on the Häagen-Dazs brand a few years ago. Our VP was a big fan of the book Trading Up, which described how middle-market consumers felt affluent and were starting to trade up up higher premium products.
We baked "trading up" into our brand strategy. Afterall, we weren't just a premium brand, we were a superpremium brand (ice cream is one of the few categories where superpremium is legally defined – fun fact for today). Not only was superpremium more profitable, it was growing. Consumers were willing to pay more for products with stories, with ethics, with higher quality.
I started going to natural products shows and realized there was a whole exploding world of superpremium products, many pushing the bounds of how much premium consumers were willing to pay. I remember one brand calling itself "ultra superpremium", another "masstige". I was struck by the one-upmanship. It seemed like "trading up" applied to brands as well as consumers.
It made me wonder if brands were juicing products with more premium than consumers really wanted. Last year, I cracked up seeing a $40 bottle of water decorated with Swarovski Crystals.
This dynamic has been on my mind lately, as consumers seem to be "trading down" to value in droves. I heard someone describe a shopping bag from LIDL (a big European discounter) as this year's Anya Hindmarch bag.
This environment is a litmus test for brands that are truly meaningful. Rather than trade up, brands need to trade deep.
Leave a Reply