Currently Reading: Trading Up

Trading Up: "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 ones. Because New Luxury goods sell at premiums of 20-200% over standard midprice goods, they deliver higher profits. They also sell in much higher volumes than superpremium products."

It's a rather interesting look at what's driven the success of companies like Starbucks, Victoria's Secret, and others that make huge profits selling premium-priced products on a mainstream scale. This goes against the traditional assumption that goods sell at either a low volume or a low price. Turns out, people will "trade down" in some categories that don't matter to them in order to trade up in areas that do.

It pretty much only talks about real-world goods, not software or web-related stuff, nor even high-tech stuff, and I don't yet know how exactly the lessons apply to the areas I usually think about. But they probably do. (Is Apple a trading-up brand? Or is it not mainstream enough?) I'm only about a third of the way through it, but good stuff so far.