Alcone Marketing Group – Consumer Lab

The phenomenon earned many nicknames — mass affluence, new luxury,
masstige — and posited that Americans with household
incomes of $50,000 and above tend to “trade up” to high-end products in
categories like kitchen appliances or bedding that are emotionally
important to them, while perhaps pinching pennies elsewhere to
compensate.

But trading up was always a fragile phenomenon. It rested, in large
part, on consumer psychology — a feeling of wealth derived from soaring
home values and the steady growth of real income, that is, income
adjusted for inflation.

Today, any growth in real income is all
but canceled out in consumers’ minds by falling home prices and rising
energy costs. Michael J. Kowalski, the chief executive of Tiffany,
calls this “the wealth affect.”

~A

Thinking Twice About That $400 Handbag – New York Times
IT was a retail juggernaut that swept through America’s shopping malls and bedroom closets, rewriting the rules of class and consumption.

But affordable luxury is not looking so affordable — or sustainable — anymore.

During
the 2007 holiday shopping season, the middle-class consumers who spent
the last decade splurging on $300 saucepans and $600 scarves, tightened
their purse strings in the face of slipping home prices and rising
energy costs.

Powered by ScribeFire.

Filed under: advertising, Consumer, fashion, living target, positioning, trends