Prestige brands may become the latest casualties of the Great Recession. Consumer preferences at the high end of the market are gradually shifting in favor of artisanal goods and products. The importance of story and relationship to the producer are becoming a significant part of the purchasing decision. This is a positive development for craftspeople and a challenge for big business.
Status is about Story: Desirable products will have a history and narrative. The story could be about the artisan, where the materials were found, or how things were made. Successful niche merchandisers will be curators of unique products. Educated buyers are looking for full-disclosure on all aspects of their purchases, and demand far more detail than casual consumers.
Social Friction: In a period marked by distrust of CEOs and investment bankers, the wealthy may find themselves spending more money to look like everyone else. Look for an uptick in discrete consumption of extremely high quality basic goods with very subdued advertising and low-profile name recognition. These items will be marketed as bespoke or of professional quality. Unlike conspicuous consumption, discrete consumption is about hiding how much you are spending. Significant purchases will continue to be made on items that are practical, durable, and of heirloom quality.
Distributed Production: The rise in popularity of websites such as Etsy and Artfire make it possible for small artisans to get global distribution. Homemade is hip and people are getting more style points for making things themselves. Status is less about what you own than what you can do or make.
Print-on-demand publishers such as Lulu are helping writers to bypass the major publishing houses. Meanwhile, 3D printing is hitting maturity, making micro-scale manufacturing possible. In an era were the means of production is ubiquitous, design and creativity are at a premium. Mass market products are still at odds with the trend towards customization.
The Experience Economy: The millennials are the first post-consumer generation. As a result, the accumulation of “stuff” is becoming less important than the cultivation of personal experiences. Part of the reason why we may be seeing this is a result of social media – which is less about physical appearances and more about digital storytelling.
It’s a whole new world for big brands. Can they differentiate themselves in a market that demands authenticity, craftsmanship, and narrative?