Trading Up: Why Consumers Want New Luxury Goods... And How Companies Create Them
Middle-market consumers, in the United States and around the world, are trading up to New Luxury products and services that deliver higher levels of quality, taste, and aspiration than conventional items. Because New Luxury goods sell for 20 to 200 percent more than standard midprice goods, they deliver higher profits. They also can sell in much higher volumes than superpremium products, and thus have greater potential for growth.
In 23 categories of consumer products and services worth $1.8 trillion in annual sales in the United States, New Luxury goods account for about 22 percent of the total, or $400 billion per year. The total is growing at 10-15 percent annually and will reach a trillion dollars by the end of this decade. The New Luxury market is about the same size in Europe as it is in the United States.
The book that describes the trading-up phenomenon, Trading Up: The New American Luxury, senior partner and managing director Michael Silverstein and Bath and Body Works CEO Neil Fiske, was originally published in 2003. It has sold more than 100,000 copies worldwide, been translated into five languages, and received the Berry-AMA award for Best Marketing Book of 2004. A second hardcover edition was released in January, 2005 with a new subtitle, Trading Up: Why Consumers Want New Luxury Goods... And How Companies Create Them (Revised and Updated) The revised and updated edition contains new consumer data, stories about emerging companies and brands in additional categories, and analysis of the trading-up phenomenon in the European and Japanese markets.
Trading Up is based on the contributions of many members of The Boston Consulting Group, who have spent years working with and observing New Luxury companies, products, and brands. In addition to the knowledge gained from direct work with clients, the book contains the findings of extensive quantitative and qualitative research. It includes analysis of 23 categories, such as autos, home goods, food, wine and spirits, sports equipment, pet food, and lingerie; interviews with important New Luxury leaders; the results of three consumer surveys taken during the period 2002-2004; dozens of interviews with individual consumers; and a literature review of more than 800 books, articles, Web sites, and other materials. |
Trading Up