More Affluent Consumers Are Haggling for High-End Home Brands
If product features cascade downward, might shopper behavior cascade upward?
I’ve always bought into the luxury marketing theory that product features launch at the high end and cascade downward to the mass-market.
For instance, the in-dash navigation system once found in a Lexus has cascaded down to a mid-market Toyota. The Asian popper appetizer from Jean-Georges is now offered at Ruby Tuesday. And the Jacuzzi once found in a million-dollar estate home is now in a $200,000 suburban garden home. I’m not sure this is an immutable law of marketing, but it’s pretty solid stuff nonetheless.
I’ve often wondered if there was anything that cascaded the other way, from the mass-market upward toward the high end. Lately, I have a working theory:
If product features cascade downward, shopper behavior cascades upward.
Case in point: haggling over price. The mass-market retailers, such as Walmart, have built their brand equity, in part, by offering a low price guarantee. “We’re so confident in our low prices, we guarantee them,” they say. “If you happen to find a lower price, we’ll match it right at the register.”
Years ago, this concept would have been unheard of at the high end. In fact, scarcity of product and non-elasticity of price have traditionally been hallmarks of luxury brands. But affluent consumers have been trained well during their Walmart visits, and now, they are bringing those expectations and behavior to high-end retailers.
The New York Times reports that retailers are not only taking note, but are beginning to train their retail associates in the art of negotiation:
“Armed with increasingly sophisticated price-tracking tools on their smartphones and other devices, consumers have become bolder, and they know that they often have the upper hand during a tough season for retailers. Recognizing the new reality, some retailers, desperate for sales and customer loyalty, have begun training their employees in the art of bargaining with customers.”
As they’ve always done, smart brands are offering value-add items, such as extended warranties, free delivery or gift-with-purchase, as a way to close the deal with a bargaining customer. But I think that we will see more of it among high-end home brands.
And I will continue to test this theory to see if shopper behavior cascades upward.
I’d love to hear your thoughts.