trading down

Posts Tagged ‘trading down’

Monday, June 15th, 2009

Micro-transactions on the web

Consumers are proving that there is a market for small dollar amounts for on-line content. Ring tones, cheap internet calls through Skype, iTunes and more are ringing up big dollar amounts on micro-transactions. It was once believed that consumers would not pay for on-line content and the only way to profit was through on-line advertising and monthly subscription services. Now advertising revenue for the time being is not as profitable as once thought and consumers expect information to be free.

Home accessories, a luxury in a down market

Little luxuries in depressed times cheer people up. In the down market designers of big ticket furniture items are facing a major challenge. A few smart ones are adding well designed home accessory collections to their offerings. But this is not just about pure design; consumers also want functional products that are long lasting, something that the discounters do not provide. Consumers of high quality furniture are attracted to premium materials and finishes and high levels of craftsmanship.
Home gift and table top retailer recently engaged famed British Architect Zaha Hadid to design a collection for the company.
Unlike big ticket furniture, home accessories can change by the season to better reflect both design and fashion trends.

Aspirational and luxury retail taking a hit

Luxury brands in the recent economic boom of 2003-2007 focused on their existing trade with a greater variety of high priced goods, but often with perceptible reductions in quality. The luxury brands also sought to expand their empire by attracting new aspirational consumers by opening more points of purchase to reach a larger market and by developing new products at lower price points for those who aspired to step up to the brand. This resulted in more consumers paying more for premium goods. But just a few years later, the consumer at all levels has traded down and perhaps to never return to the same level of consumption, in this generation.