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Trading Up: Why Consumers Want New Luxury Goods--and How Companies Create Them
First published to media acclaim in October 2003, Trading Up revealed how today’s middle-class consumers are seeking higher levels of quality, taste, and aspiration than had ever been possible before—in their choices of cars and clothing, vodka and beer, golf clubs and dolls, and much more. The book identified a major opportunity for entrepreneurs and innovators, managers and marketers, in every category of consumer goods and services. Now Michael Silverstein and Neil Fiske have thoroughly revised this BusinessWeek bestseller with new research and new insights into the still- growing phenomenon of trading up.
320 pages, Hardcover
First published October 13, 2003
65 people are currently reading
759 people want to read
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September 25, 2020
Yeah... I don’t know why I read this. I am definitely not the target audience. I’m not a CEO, entrepreneur, or business student. I despise the idea of getting an MBA. Yet I sat next to a businesswoman on a plane once, and she recommended this book to me. Pretty sure that I checked it out on Amazon and it had decent reviews there, so I thought I’d try my hand at reading something different. That’s what I get for being adventurous, I suppose.
The basic premise of the book is that there are more households in the middle and upper-middle classes in the United States than ever. By middle class, the authors mean households making at least $50k a year; they make it pretty clear early on that they’re not interested in anyone who doesn’t make at least that much. Because what’s the appeal in making products for poor people? None, apparently. These middle-class households have a healthy appetite for consumer goods, and are willing to pay a premium for goods that are of higher quality or better design. Dubbing these goods “New Luxury,” Silverstein and Fiske argue that their new prevalence in the marketplace has significantly and permanently altered the consumer landscape.
As a corollary, there are the concepts of “trading up” - i.e., spending more in a particular consumer category than your income might predict — as well as “trading down”, which means making product compromises for the aforementioned sake of trading up in other, more important categories. I do think they’re on to something here. Thinking of my own spending habits, I either shop for groceries at Wal-Mart, where I pick up basic shelf-stable items like cereal and granola, or I pay a premium to shop at New Seasons, a local Portland chain akin to Whole Foods with excellent produce, meat, and other fresh foods. That’s it. The middle is decidedly absent - I almost never visit a Safeway, QFC, or other middle-market brand. Those are boring and predictable. When I buy stuff like cereal, where I always buy the same brand anyway, I try to pay the least amount for it possible, hence Wal-Mart. But I want my produce to be really good, and New Seasons offers a pleasantly bougie shopping experience to boot.
That’s it. That’s the whole premise of the book. Sounds kind of interesting but... is it really that novel? Better products at higher prices than the market average are always being introduced. I suppose the uniqueness of “New Luxury” goods is that they sell at a higher volume than expected based on their sale price. But is this really a new phenomenon? There’s no way to really say, because this book is essentially ahistorical. Silverstein and Fiske are pretty much only interested in the period from 1950-2003. Furthermore, their definition of “New Luxury” is really broad and not terribly helpful. They claim that stores such as Williams-Sonoma are the epitome of “New Luxury,” and sure, I can see that. Williams-Sonoma is more expensive than your standard department store, and it’s done really well for itself by selling quality kitchenware at higher prices and basically inventing a new market for those types of goods. But what about Trader Joe’s? It there really anything luxurious about that? The authors say yes, because the mission of TJ’s was to bring unusual grocery items to a well-educated consumer at affordable prices. Ok... but doesn’t the affordable price point kind of negate the whole “luxury” thing? I mean sure, TJ’s exploited a white space in the market, but I don’t know that they’ve necessarily persuaded people to spend more on groceries. Another company they devote the better part of a chapter to is Panera. They claim that Panera represents “New Luxury” because it’s a step above fast-food chains like McDonald’s. But Panera isn’t a sit-down restaurant, either. So, isn’t that the definition of middle market?? After all, I don’t know what exists between McDonald’s fast-food and Panera’s fast-casual.
So the examples feel both cherry-picked (why would consultants be interested in any businesses other than those with absolutely explosive growth?) as well as not terribly illustrative of the core concept. Basically, it kind of comes down to: Guess what! The middle class has money! The middle class will pay more for products that are well-designed and “new” in some way! If you find a gap in the market, you can make a new product and sell it for a higher price and potentially at a really high volume!! And make tons of money and reach millions in sales in just a few years!! Omg do it now!!
That said, the authors also don’t do a terribly good job of illustrating how the middle is losing out. They speak highly of new companies that quickly attain huge sales, yes, but they don’t really analyze the effects of those new companies on existing players. I think a more accurate description of what’s happening is that the middle is permanently shifting upwards. Instead of paying $15 for a department store bra, someone might spend $30 for a fashionable one from Victoria’s Secret. As VS market share grows, those $15 bras look more and more boring. Eventually people stop buying department store bras altogether, to the extent that a top search result on Google is “where can I buy a bra that isn’t Victoria’s Secret?” VS took the bra market in a different direction, but VS is in turn now being overtaken by companies like ThirdLove and Aerie, which offer more comfortable bras in less flashy patterns. The new price point of the $30 bra is here to stay, though. I don’t know if that really illustrates the concept of “New Luxury,” or if it just shows the churn of businesses more generally. Brands are always falling into and out of favor. There’s nothing new or novel about that. And there will always be a new competitor who tries to sell a “better” version of the same product for more money (think of what HydroFlask has done to the Thermos industry). So I don’t know that the book has really persuaded me of anything.
But that’s what I get for reading a book whose copyright is held by the Boston Consulting Group. It’s really just a puffed-up executive report — not terribly well-organized one, might I add — that seems like something when it’s really nothing. Ah, marketing. What a thing you are.
The basic premise of the book is that there are more households in the middle and upper-middle classes in the United States than ever. By middle class, the authors mean households making at least $50k a year; they make it pretty clear early on that they’re not interested in anyone who doesn’t make at least that much. Because what’s the appeal in making products for poor people? None, apparently. These middle-class households have a healthy appetite for consumer goods, and are willing to pay a premium for goods that are of higher quality or better design. Dubbing these goods “New Luxury,” Silverstein and Fiske argue that their new prevalence in the marketplace has significantly and permanently altered the consumer landscape.
As a corollary, there are the concepts of “trading up” - i.e., spending more in a particular consumer category than your income might predict — as well as “trading down”, which means making product compromises for the aforementioned sake of trading up in other, more important categories. I do think they’re on to something here. Thinking of my own spending habits, I either shop for groceries at Wal-Mart, where I pick up basic shelf-stable items like cereal and granola, or I pay a premium to shop at New Seasons, a local Portland chain akin to Whole Foods with excellent produce, meat, and other fresh foods. That’s it. The middle is decidedly absent - I almost never visit a Safeway, QFC, or other middle-market brand. Those are boring and predictable. When I buy stuff like cereal, where I always buy the same brand anyway, I try to pay the least amount for it possible, hence Wal-Mart. But I want my produce to be really good, and New Seasons offers a pleasantly bougie shopping experience to boot.
That’s it. That’s the whole premise of the book. Sounds kind of interesting but... is it really that novel? Better products at higher prices than the market average are always being introduced. I suppose the uniqueness of “New Luxury” goods is that they sell at a higher volume than expected based on their sale price. But is this really a new phenomenon? There’s no way to really say, because this book is essentially ahistorical. Silverstein and Fiske are pretty much only interested in the period from 1950-2003. Furthermore, their definition of “New Luxury” is really broad and not terribly helpful. They claim that stores such as Williams-Sonoma are the epitome of “New Luxury,” and sure, I can see that. Williams-Sonoma is more expensive than your standard department store, and it’s done really well for itself by selling quality kitchenware at higher prices and basically inventing a new market for those types of goods. But what about Trader Joe’s? It there really anything luxurious about that? The authors say yes, because the mission of TJ’s was to bring unusual grocery items to a well-educated consumer at affordable prices. Ok... but doesn’t the affordable price point kind of negate the whole “luxury” thing? I mean sure, TJ’s exploited a white space in the market, but I don’t know that they’ve necessarily persuaded people to spend more on groceries. Another company they devote the better part of a chapter to is Panera. They claim that Panera represents “New Luxury” because it’s a step above fast-food chains like McDonald’s. But Panera isn’t a sit-down restaurant, either. So, isn’t that the definition of middle market?? After all, I don’t know what exists between McDonald’s fast-food and Panera’s fast-casual.
So the examples feel both cherry-picked (why would consultants be interested in any businesses other than those with absolutely explosive growth?) as well as not terribly illustrative of the core concept. Basically, it kind of comes down to: Guess what! The middle class has money! The middle class will pay more for products that are well-designed and “new” in some way! If you find a gap in the market, you can make a new product and sell it for a higher price and potentially at a really high volume!! And make tons of money and reach millions in sales in just a few years!! Omg do it now!!
That said, the authors also don’t do a terribly good job of illustrating how the middle is losing out. They speak highly of new companies that quickly attain huge sales, yes, but they don’t really analyze the effects of those new companies on existing players. I think a more accurate description of what’s happening is that the middle is permanently shifting upwards. Instead of paying $15 for a department store bra, someone might spend $30 for a fashionable one from Victoria’s Secret. As VS market share grows, those $15 bras look more and more boring. Eventually people stop buying department store bras altogether, to the extent that a top search result on Google is “where can I buy a bra that isn’t Victoria’s Secret?” VS took the bra market in a different direction, but VS is in turn now being overtaken by companies like ThirdLove and Aerie, which offer more comfortable bras in less flashy patterns. The new price point of the $30 bra is here to stay, though. I don’t know if that really illustrates the concept of “New Luxury,” or if it just shows the churn of businesses more generally. Brands are always falling into and out of favor. There’s nothing new or novel about that. And there will always be a new competitor who tries to sell a “better” version of the same product for more money (think of what HydroFlask has done to the Thermos industry). So I don’t know that the book has really persuaded me of anything.
But that’s what I get for reading a book whose copyright is held by the Boston Consulting Group. It’s really just a puffed-up executive report — not terribly well-organized one, might I add — that seems like something when it’s really nothing. Ah, marketing. What a thing you are.
July 5, 2017
Very inspiring and potent research of the changes of global economic. 4.5 Stars!!
First, the author starts with explaining the force behind the demand for New Luxury Goods. After the World War II, the needs of manufactured goods are sky rocketed. Commodities produce incessantly to meet the demand of the markets. People get to wear clothes, foods, drinks. After the fundamental of need in the human hierarchy, people want more. They wanted cars, refrigerators, household goods.
I remembered the book, Abundance by Peter Diamandis. He describes that human has a different fundamental needs in life. It called Maslow's Hierarchy. When the basic foundations of need fulfilled. We wanted more. That is why the consumer is in a state of heightened emotionalism. We want to be unique, valued, respected, status.
So, the consumer is willing to spend a lot of money for certain things if we think they have value and we want them and can afford them. Because every consumer has a different idea of what is necessary for them to survive in his own world and what he is willing to spend to do so.
The second reason behind the force of trading up is the reduced cost of living and more discretionary income. The young, single, working women are the main contributor in this New Luxury Goods market. The changing of the family structure also playing a part a role of the discretionary spending. People are having fewer kids in total. Therefore, people have money to spend on something important to them.
When people have more choices to trade down to buy cheaper commodities, they will have more discretionary spending on the different category of New Luxury Goods in their life. People gravitate toward the premium New Luxury goods if that category is important to them (Benz C Class, BMW 3 series, affordable premium goods, etc), if isn't they trade down to low-cost goods. That often leads to death in the middle for those products. Because they offer no specific reason to buy.
But the author has written this book in the year of 2003. Which Starbucks, Victoria Secret, Under Armour, and many other New Luxury goods are born during 90's. And all these brands have now become commercialized and mainstream.
There will be another New New Luxury goods risen during this decade. For instances, Starbuck coffee has become too pervasive which leads to Generation of Millennials to create their own hippy cafe and artisanal products.
The author should update the book as another expanded edition to follow up and explain that all the New Luxury products will eventually reach the laggards market and become obsolete. *The law of diffusion. Therefore, every product and business have their lifecycle.
Overall are very impressive to read and I found the book is a bit redundant. And I skimmed a few chapters on the explanation in different New Luxury Goods industry where are not really interested to read at all.
First, the author starts with explaining the force behind the demand for New Luxury Goods. After the World War II, the needs of manufactured goods are sky rocketed. Commodities produce incessantly to meet the demand of the markets. People get to wear clothes, foods, drinks. After the fundamental of need in the human hierarchy, people want more. They wanted cars, refrigerators, household goods.
I remembered the book, Abundance by Peter Diamandis. He describes that human has a different fundamental needs in life. It called Maslow's Hierarchy. When the basic foundations of need fulfilled. We wanted more. That is why the consumer is in a state of heightened emotionalism. We want to be unique, valued, respected, status.
So, the consumer is willing to spend a lot of money for certain things if we think they have value and we want them and can afford them. Because every consumer has a different idea of what is necessary for them to survive in his own world and what he is willing to spend to do so.
The second reason behind the force of trading up is the reduced cost of living and more discretionary income. The young, single, working women are the main contributor in this New Luxury Goods market. The changing of the family structure also playing a part a role of the discretionary spending. People are having fewer kids in total. Therefore, people have money to spend on something important to them.
When people have more choices to trade down to buy cheaper commodities, they will have more discretionary spending on the different category of New Luxury Goods in their life. People gravitate toward the premium New Luxury goods if that category is important to them (Benz C Class, BMW 3 series, affordable premium goods, etc), if isn't they trade down to low-cost goods. That often leads to death in the middle for those products. Because they offer no specific reason to buy.
But the author has written this book in the year of 2003. Which Starbucks, Victoria Secret, Under Armour, and many other New Luxury goods are born during 90's. And all these brands have now become commercialized and mainstream.
There will be another New New Luxury goods risen during this decade. For instances, Starbuck coffee has become too pervasive which leads to Generation of Millennials to create their own hippy cafe and artisanal products.
The author should update the book as another expanded edition to follow up and explain that all the New Luxury products will eventually reach the laggards market and become obsolete. *The law of diffusion. Therefore, every product and business have their lifecycle.
Overall are very impressive to read and I found the book is a bit redundant. And I skimmed a few chapters on the explanation in different New Luxury Goods industry where are not really interested to read at all.
March 2, 2021
Whooooweee! This book is awful! I stopped twice in the first 10 pages to do an internet search to make sure this wasn’t a mocumentary-style gag-book. Swear to God.
First, this book glorifies hyper-consumerism in an exorbitantly dull sort of way. It's shockingly grotesque, if I’m being honest. You’d be hard-pressed to find more brand name mentions (along with price points) for no clear reason in the flashing corners of a clickbait article.
Second, this book doesn’t clearly define its purpose or thesis. Yes, the idea is that people tend to “trade up” but the authors never actually lay out exactly what that term means to them. Is trading up literally trading - like, bartering - skyward? Probably not but I can’t be certain because they never really defined it. A quote from the start of chapter two, describing who is “trading up” to show just how vague this monstrosity gets:
“Who are the New Luxury consumers? They are a surprisingly diverse group of people- both male and female, all ages, single and married, and in every kind of profession… As our survey shows, almost everyone (96.2 percent) will ‘pay more’ for at least one type of product that is of importance to them...“
The surveyor who developed that question needs to be located, hog-tied, and thrown in the nearest kiddie pool. Yes, not only is that survey question ludicrous by any standard, not only did they not reference their “survey” AT ALL (sample size who??), but - get this - over the following 22 pages the authors proceed to thread what truly feels like a schizophrenic’s string theory of the types of people who would “trade up.” Now, please, keep in mind that that 22 pages attempted to cover >96% of people in their “survey.” Those 22 pages of paper - per book - would have done more good for the world had they gone directly to recycling.
Further reading points towards a very exclusionary and categorical focus of this book. Namely, that they only care to pay attention to people making $50,000/yr or more and that… that’s pretty messed up on multiple fronts. I mean, at the very least they could’ve mentioned that fact when they dropped their “survey” data haha. I stopped reading shortly thereafter.
Perhaps you’re now beginning to realize why I stopped twice in the first 10 pages to make sure this wasn’t a gag-book. Fundamentally, this book is flawed as, among many other things, it doesn’t state its purpose or adequately support its claims. Every ten or so pages is another two-axis graph made on powerpoint with text saying something like: ‘company X sells more luxury item Y than it did a decade ago;’ nothing substantive. These repetitive issues make it feel like it was written by a very old man in part because of its repetition and because it grasps onto what is so obvious about our current consumerist economy. Brands sell; consumers prefer quality if they can get it; people like technology. The thing is repetitive. It seems that just about anyone with a cursory understanding of finance knows there are actual formulas for this. Also, the book repeats itself.
My takeaway: The book's premise isn't too far off; I desire to "Trade Up" to more quality books.
First, this book glorifies hyper-consumerism in an exorbitantly dull sort of way. It's shockingly grotesque, if I’m being honest. You’d be hard-pressed to find more brand name mentions (along with price points) for no clear reason in the flashing corners of a clickbait article.
Second, this book doesn’t clearly define its purpose or thesis. Yes, the idea is that people tend to “trade up” but the authors never actually lay out exactly what that term means to them. Is trading up literally trading - like, bartering - skyward? Probably not but I can’t be certain because they never really defined it. A quote from the start of chapter two, describing who is “trading up” to show just how vague this monstrosity gets:
“Who are the New Luxury consumers? They are a surprisingly diverse group of people- both male and female, all ages, single and married, and in every kind of profession… As our survey shows, almost everyone (96.2 percent) will ‘pay more’ for at least one type of product that is of importance to them...“
The surveyor who developed that question needs to be located, hog-tied, and thrown in the nearest kiddie pool. Yes, not only is that survey question ludicrous by any standard, not only did they not reference their “survey” AT ALL (sample size who??), but - get this - over the following 22 pages the authors proceed to thread what truly feels like a schizophrenic’s string theory of the types of people who would “trade up.” Now, please, keep in mind that that 22 pages attempted to cover >96% of people in their “survey.” Those 22 pages of paper - per book - would have done more good for the world had they gone directly to recycling.
Further reading points towards a very exclusionary and categorical focus of this book. Namely, that they only care to pay attention to people making $50,000/yr or more and that… that’s pretty messed up on multiple fronts. I mean, at the very least they could’ve mentioned that fact when they dropped their “survey” data haha. I stopped reading shortly thereafter.
Perhaps you’re now beginning to realize why I stopped twice in the first 10 pages to make sure this wasn’t a gag-book. Fundamentally, this book is flawed as, among many other things, it doesn’t state its purpose or adequately support its claims. Every ten or so pages is another two-axis graph made on powerpoint with text saying something like: ‘company X sells more luxury item Y than it did a decade ago;’ nothing substantive. These repetitive issues make it feel like it was written by a very old man in part because of its repetition and because it grasps onto what is so obvious about our current consumerist economy. Brands sell; consumers prefer quality if they can get it; people like technology. The thing is repetitive. It seems that just about anyone with a cursory understanding of finance knows there are actual formulas for this. Also, the book repeats itself.
My takeaway: The book's premise isn't too far off; I desire to "Trade Up" to more quality books.
December 25, 2017
Interesting anecdotes but the premise of the book is a bit outdated - data used is mostly from 2000. Not really worth reading unless authors decide to do a full refresh.
August 26, 2017
The book is a bit stale having been published before the rise of social media; however, the company narratives are good, and the work plan chapter is valuable. Very quick read for someone who is interested in recent business history.
March 24, 2017
Good insights on social trends and customer behaviors.
Interesting case studies in different industries such as home decor, wine, beer, car, lingerie, food, pet food...
Interesting case studies in different industries such as home decor, wine, beer, car, lingerie, food, pet food...
January 2, 2018
I saw this book referenced in the sometimes awesome Ribbonfarm blog.
The main concept is that people will commonly spend more in some category of life and less in others. This is actually a lot more plausible than the null hypothesis that everyone spends proportionately the same on everything - damn you homo economicus, you have tricked me again. Anyway, this means that for the special things in life in some particular domain (favourite hobby, specila interest etc.) people will pay for the best, in some way that's emotionally satisfying to them. So there exist business niches that can service these "New Luxury" purchases.
The writing is fine and the structure works well - a handful of chapters to explain the main themes, then half a dozen case studies and a summary chapter or two. More interesting to me for the socio-economics than the business angle, but a solid read either way.
The main concept is that people will commonly spend more in some category of life and less in others. This is actually a lot more plausible than the null hypothesis that everyone spends proportionately the same on everything - damn you homo economicus, you have tricked me again. Anyway, this means that for the special things in life in some particular domain (favourite hobby, specila interest etc.) people will pay for the best, in some way that's emotionally satisfying to them. So there exist business niches that can service these "New Luxury" purchases.
The writing is fine and the structure works well - a handful of chapters to explain the main themes, then half a dozen case studies and a summary chapter or two. More interesting to me for the socio-economics than the business angle, but a solid read either way.
August 29, 2014
What do Kendall Jackson, American Girl, Viking ranges, BMW, Sam Adams Beer, Panera Bread, Crate & Barrel,Victoria's Secret, and Callaway golf clubs have in common? Each is a wildly successful example of a New Luxury {read "mass prestige"} good emotionally embraced by middle-market American consumers. As a fascinated participant in the business of advertising storytelling, I was riveted by Silverstein and Fiske's "profile" of New Luxury leaders.
Silverstein and Fiske present a startlingly accurate {at least for me} assessment of the emotional drivers which prompt us to "splurge" on select New Luxury products {a great bottle of wine, for example}while simultaneously "trading down" to buy goods in other categories {staple groceries at Cub Foods comes to mind for me}. We will "trade up" when a product connects, for us, with one or more of the following four "emotional spaces":
*Products which make us feel as though we are taking care of ourselves: nurturing well-being, beauty, youthfulness, and which give us a sense of making time for ourselves. Think spas and housewares.
* Products which are about connecting; romantically, with our families, and with the social class to which we aspire. Think lingerie, American Girl dolls, and Callaway golf clubs.
*Products which address "questing"; which enrich our existence, deliver new experience, satisfy curiosity; add novelty and exoticism to our lives. Think exotic culinary ingredients, wines, and adventurous travel packages.
*Products which signal our individual style; our achievement, sophistication, and success. Items like BMWs, shoes, the cocktail we choose in a social setting, watches, and fashion fall into this category.
I select certain goods as signals in these emotional categories...well. ALL the time! So much for my illusions of distinctive individuality. Daniel Gilbert is right, and the proof that our similarities outweigh our disparities is in these tales of niche-market success. I reach for Alterra coffee and a lingerie splurge to feel pampered. My slightly-more-than-passing-acquaintance with Australian wines is a subtle way for me to cue both a curiosity about global vintages and my travel experiences. Turns out I can be expert in deciphering brand messages without realizing that I'm aligning with "meanings" that are hardly unique to me.
Much as reading Trading Up left me feeling a bit abashed, it also reminded me how universally human our longings are, and taught me some things about how to translate trend-sensitive vision into success while honoring the humanity of whatever market I serve. This business book is a peek into consumer psyche, and into our own psyche. Me? I think that's worthwhile. If you are in the business of promoting anything, you will benefit by picking up this smart current study. Even if you aren't, Trading Up probably falls into the Questing category of emotional satisfaction.
Silverstein and Fiske present a startlingly accurate {at least for me} assessment of the emotional drivers which prompt us to "splurge" on select New Luxury products {a great bottle of wine, for example}while simultaneously "trading down" to buy goods in other categories {staple groceries at Cub Foods comes to mind for me}. We will "trade up" when a product connects, for us, with one or more of the following four "emotional spaces":
*Products which make us feel as though we are taking care of ourselves: nurturing well-being, beauty, youthfulness, and which give us a sense of making time for ourselves. Think spas and housewares.
* Products which are about connecting; romantically, with our families, and with the social class to which we aspire. Think lingerie, American Girl dolls, and Callaway golf clubs.
*Products which address "questing"; which enrich our existence, deliver new experience, satisfy curiosity; add novelty and exoticism to our lives. Think exotic culinary ingredients, wines, and adventurous travel packages.
*Products which signal our individual style; our achievement, sophistication, and success. Items like BMWs, shoes, the cocktail we choose in a social setting, watches, and fashion fall into this category.
I select certain goods as signals in these emotional categories...well. ALL the time! So much for my illusions of distinctive individuality. Daniel Gilbert is right, and the proof that our similarities outweigh our disparities is in these tales of niche-market success. I reach for Alterra coffee and a lingerie splurge to feel pampered. My slightly-more-than-passing-acquaintance with Australian wines is a subtle way for me to cue both a curiosity about global vintages and my travel experiences. Turns out I can be expert in deciphering brand messages without realizing that I'm aligning with "meanings" that are hardly unique to me.
Much as reading Trading Up left me feeling a bit abashed, it also reminded me how universally human our longings are, and taught me some things about how to translate trend-sensitive vision into success while honoring the humanity of whatever market I serve. This business book is a peek into consumer psyche, and into our own psyche. Me? I think that's worthwhile. If you are in the business of promoting anything, you will benefit by picking up this smart current study. Even if you aren't, Trading Up probably falls into the Questing category of emotional satisfaction.
December 15, 2014
I recently went to a talk by Rainer Mueller, the CEO of Williams Fresh Cafe, in which he gave a presentation on what he sees as two increasingly distinct categories of consumers: the Traditionalists (mostly older people who focus primarily on low price as the main purchase criteria) and the NEOs (New Economic Order consumers who are largely of the younger generation and focus more on value, design, uniqueness, and experience). As someone who has an interest in social trends, this was something I found highly interesting. The authors of "Trading Up" have helped to refine this view in my mind to one that I consider as more reflective of actual reality, namely that most people are actually both (looking to save money on some things but willing to spend more money on others), but differ in what they're willing to spend extra money on.
One category tends to consist of older people who would also be classified as rich. When they want to spend money, they tend to buy luxury goods, which the authors define as expensive, exclusive, hand-made, and elitist. The other category tends to consist of younger people who would certainly not be classified as belonging to the "rich" class. By and large, they focus on cost as the primary purchasing factor... but only so long as the products they're buying are relatively ordinary or unimportant in their minds. However, despite their limited resources, there are some things they are willing to spend disproportionately more on, products or services that are engaging, that have value to them in some way by making them feel better about themselves or help them to function better in some way. For these things, which the authors call "New Luxury", they are willing to pay a premium price.
The message for entrepreneurs? Find a business or service that will appeal to this category of consumer and you will soon have a booming market. And for already established businesses? Develop new products or services that address this need or find a way to package existing ones to appeal to this category of consumer.
Definitely food for thought...
One category tends to consist of older people who would also be classified as rich. When they want to spend money, they tend to buy luxury goods, which the authors define as expensive, exclusive, hand-made, and elitist. The other category tends to consist of younger people who would certainly not be classified as belonging to the "rich" class. By and large, they focus on cost as the primary purchasing factor... but only so long as the products they're buying are relatively ordinary or unimportant in their minds. However, despite their limited resources, there are some things they are willing to spend disproportionately more on, products or services that are engaging, that have value to them in some way by making them feel better about themselves or help them to function better in some way. For these things, which the authors call "New Luxury", they are willing to pay a premium price.
The message for entrepreneurs? Find a business or service that will appeal to this category of consumer and you will soon have a booming market. And for already established businesses? Develop new products or services that address this need or find a way to package existing ones to appeal to this category of consumer.
Definitely food for thought...
August 14, 2007
I'm in Marketing, so I'm always interested in consumer behavior books. I'm also interested in luxury goods because, well - I like them!
This book was alright, and I say only "alright" because it became a bit arduous to get through about midway because of its redundancy. You can only say "people want luxury items because of the reputation attached to them" so many times.
And that's pretty much the basis of the book - why people are willing to pay a ton more money for something that has a seemingly "generic" counterpart that would afford them the same experience at a lower price.
Overall, not a bad book - especially if you're in the industry or deal with sales/marketing on a daily basis.
This book was alright, and I say only "alright" because it became a bit arduous to get through about midway because of its redundancy. You can only say "people want luxury items because of the reputation attached to them" so many times.
And that's pretty much the basis of the book - why people are willing to pay a ton more money for something that has a seemingly "generic" counterpart that would afford them the same experience at a lower price.
Overall, not a bad book - especially if you're in the industry or deal with sales/marketing on a daily basis.
July 18, 2008
I mostly picked this up because it was the best choice at the airport bookstore, but I had also read intriguing reviews. And I figured I was one of the consumers this book is about; I buy many of the brands they discuss. It's mostly written as a guide to marketing to these consumers, but it's still an interesting read when you're just a consumer rather than a brand owner. I don't feel manipulated after reading it. It makes homeowning sound dangerously expensive in ways I hadn't considered. Some of the numbers seemed off -- I only earn about half the salary they give for the official demographic that buys these products. Everything else rang true, however. In quoting random consumers, there seemed to be an unusually high number of librarians.
August 26, 2008
This has become a history book, documenting a time and way of life that might as well be another planet now. Our society of 2008 is much more sober and less impressed than it was in 2003. 2003 seems like the roaring twenties by comparison. Some of the values ascribed to people in 2003 are questionable and the changes have been for the better. The concept of "aspirers" is less about acquisition and more about security these days. All the same, the authors identified a search for authenticity in buyer psychology that might have been the first glimpse of a more conscious, deliberate buyer. Otherwise, this book is well written and observed.
October 9, 2011
This book is skippable. The authors didn't do any real behavioral marketing research. Instead of an analytic, academic study, they just relied on their own wits and experience, citing no footnotes or other proof of their theories. It's just drivel, really. In fact, their math and impressions about median income are just plain wrong. Families in the 1970's had more income, comparitively. Don't bother with it. Read Deluxe: How Luxury Lost its Luster, Stumbling on Happiness instead, and perhaps Cheap. Those three books will give you a better idea on what is really happening in the market today.
January 4, 2017
Though the book was written before the financial crisis and some lessons are less relevant given the ensuing events, there were many historical lessons that still ring true today. Interesting anecdotes from BMW, Whirlpool, Belvedere and Mondavi offer helpful innovation and "Trading up" stories for innovators of today, even though some aspects of the stories were specific to the time period it was written. Overall a helpful overview for anyone interested in consumer psychology, innovation, or direct to consumer sales.
August 3, 2016
Il libro nella sua prima edizione ha oltre una decina d'anni ma rimane ancora oggi una delle più stimolanti chiavi di lettura per capire il mondo dei prodotti lusso e lifestyle, con in più una serie di interessanti casi aziendali.
La parte più utile è quella dedicata all'evoluzione del consumatore e sull'emergere dei "nuovi bisogni" che guidano gli acquisti nel settore del lusso o, meglio, del "nuovo lusso" che rappresenta il centro dell'interesse degli autori.
La parte più utile è quella dedicata all'evoluzione del consumatore e sull'emergere dei "nuovi bisogni" che guidano gli acquisti nel settore del lusso o, meglio, del "nuovo lusso" che rappresenta il centro dell'interesse degli autori.
August 10, 2008
Very interesting discourse regarding the importance of positioning. A product cleverly marketed, even of inferior quality, well packaged and peddled, can be perceived as an item of luxury and a must-have.. Interesting to note how consumers are overly cheap in some areas, to be able to overspend in others. I'm sure you'll find you do the same.
October 14, 2008
Trading Up is a must-read for anyone selling luxury.
The authors are veteran consultants from the Boston Consulting Group with firsthand insight into the rise of mass-luxury brands like: BMW, Starbucks, & Victoria's Secret.
Amazing insights into why consumers polarize their spending habits towards certain luxury goods... check it out.
The authors are veteran consultants from the Boston Consulting Group with firsthand insight into the rise of mass-luxury brands like: BMW, Starbucks, & Victoria's Secret.
Amazing insights into why consumers polarize their spending habits towards certain luxury goods... check it out.
April 15, 2016
Well, for me the epilogue was the most interesting part. There were some interesting insights into the history of brands that gained strength in the 90s, however, the audience is clearly marketing or entrepreneurial types that might apply these tricks of the trade from case studies. Not too much was surprising.
September 23, 2007
a very interesting look at how companies get average middle class people to purchase premium products at premium prices. it really made me think about what i buy and why i'll pay more for particular products.
August 9, 2007
Excellent book that discusses the theory behind why people are willing to pay a premium for items that could cost significantly cheaper.
April 18, 2008
Interested to re-read this given the changes in our economy the last 3 years.
May 27, 2008
Interesting - although probably doesn't apply as much in current economic conditions. But was definately true up until 2008.
August 10, 2008
Same old same old-people want to make money-so they try to convince the everyday man to buy their products. Buy Buy Buy
February 2, 2009
Simple concept. Great examples. Worth a read.
November 2, 2009
A great glimpse into the minds of consumers and why they spend excessive amounts of money on silly stuff that is completely unnecessary.
August 18, 2010
Some interesting case studies but seems very dated these days...
May 23, 2012
this book was given to me as a gift. It was kind of boring, it felt like torture to finish this one.
March 30, 2013
A should-read book on marketing for the knowledge worker, manager, executive, or entrepreneur.
July 28, 2018
If you want to know why we're ALL SO MAD, look no further! Read it and laugh/weep.
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