As a shopper, you either go big or go home. That’s what a recent article in CNNMoney.com was projecting as an emerging trend in retail consumption. People are weary of getting the best bang for buck, and middle-market products and services just aren’t cutting it any more.
The key word here is value. From what I gathered in the article, people are buying higher-priced items less often overall, but the ratio of mid-priced items purchased versus luxury goods is narrowing. As for the dramatic rise in low-cost items purchased, that just takes into consideration both people who see little value in mid-priced goods and those who simply can’t afford anything more expensive.
How long will this trend last? I think the tide will turn once mid-priced manufacturers decide to increase the quality of their goods. As of right now, Gap clothes made in China will still embody the stigma of an overpriced item that’s not worth its pricetag. Why pay for Gap when Joe Fresh offers similar alternatives at half the price or more?
Retailers should take a hard look at their SKU’s and determine for themselves if the revenue pie chart has indeed changed shape in the past year. The shift may require a re-evaluation in what products to promote more.