TRADING UP…AND DOWN
Byline: Valerie Seckler
NEW YORK — “Masstige” is the next wave for fashion-lifestyle marketers to ride.
The marketing phenomenon reflects the increasing democratization of luxury, according to Michael J. Silverstein, a Chicago-based senior vice president of The Boston Consulting Group in its consumer practice. Silverstein, who is writing a book about the trend called “Trading Up,” coined the word masstige to describe the ego-intensive products people buy to tell the world that — at least in terms of their wealth and consumption capabilities — “I’m doing fine.”
While Americans have long acquired status symbols, they’re rapidly redefining exactly which types of products and stores make them feel good about themselves — and those items are no longer limited to Gucci or Hermes. They now range from a widely attainable $2.50 cup of Starbuck’s coffee up to the rarified reaches of, say, a $300,000 Mercedes-Benz, Silverstein told WWD in an interview at BCG’s offices here last Wednesday.
A confluence of dynamics is contributing to the transformation, including Americans’ rising anxiety about their future; the ongoing concentration of wealth; better education levels, which, in turn, boosts their expectations of products, and access to increasingly sophisticated products.
“People have less job loyalty and less relationship loyalty,” Silverstein observed. “The average marriage lasts seven years; the average first job lasts 1 1/2 years. This has caused consumers’ anxiety to rise during the past decade and, as a result, they are searching more intently for ego-intensive goods to reward themselves.”
Also driving the trend is the concentration of 90 percent of U.S. consumer spending in just 60 percent of the country’s households. “That rising wealth gives people more choices; the ability to buy better cars, nicer homes and disposables like apparel,” Silverstein observed.
Starbuck’s has done an especially effective job in catering to this crowd, the consultant said, mostly because it provides a “completely predictable experience” — a high-quality cup of coffee at an average price of $2.50, when consumers could make a cup of Maxwell House at home for 8 cents. “If you visit a Starbuck’s at an airport,” he recounted, “you see a cross-section of America: auto mechanics, pilots, business executives, Middle Americans taking their one or two trips a year.”
Mercedes-Benz has also done a nice job, in Silverstein’s view, of developing products to appeal to a broader range of customers, expanding its offer to cars priced, in Germany, from $15,000 to $300,000, from the price range back in 1990, when it was a much slimmer spread of $60,000 to $110,000.
Silverstein expects demand for more affordable luxuries only to keep spiraling upward. In fact, the genesis of “Trading Up,” which he wrote with his BCG partner Neil Fisk, was their consulting work for clients who believed there was no upscale market for them to mine. “We found that’s not true,” Silverstein related. “That was the big surprise — the increasingly varied categories of democratized luxury goods.” A prime example, he said, is pizza. A handful of upscale supermarket versions, such as Wolfgang Puck and Digiorno’s, have found success in a niche that didn’t exist 10 years ago.
“Gino’s, the original frozen-pizza brand, which tastes something like cardboard, has become hard to find,” Silverstein added. “This says there is an opportunity to create super-premium products in categories where none previously existed.”