Nielsen provides us with an insight into the strong sales growth around the world for premium products. In its most recent survey, it states that the premium segment is experiencing strong growth as consumer buying power and spending rise around the world. This is of particular importance within the home furnishings industry which has seen high-end manufacturing and retail in this category all but disappear since the Great Recession.
There were high-end retailers in nearly every major market in America in the later part of the 20th Century. These big names in the high-end pushed the industry to higher levels. Huﬀman-Koos in New York, Raymour & Flanigan in upstate New York, Bograds in Northern New Jersey, Wayside of Milford in Connecticut, Cabot House in Boston, Jonns in Philadelphia, Today’s Home in Pittsburgh, Mastercraft Interiors in Washington, DC, Furnitureland South in High Point, Hilda Flack in Atlanta, Robb & Stucky in Florida, Goodman’s in Cleveland, Gorman’s in Detroit, Porter’s of Racine in Racine, Plunkett’s in Chicago, Gabbert’s in Minneapolis, Kornmeyers in Baton Rouge, Kirschman’s in New Orleans, Suniland in Houston, Louis Shanks in Austin, Ellison’s in Fort Worth, Homestead House in Denver, Barrows in Phoenix, VJ Lloyd in San Diego, Barker Brothers in Los Angeles, Breuners in San Francisco, Selden’s in Tacoma, Maison’s in
Seattle, CS Wo in Honolulu were a few who held court in the showrooms of the big manufacturers at market. Today, only a few of these remain.
For those who are, today's consumers aren’t just trading up on big-ticket purchases; they’re also going premium on everyday items. The personal=care, beauty, home-care and various food and beverage categories are experiencing strong sales growth in many markets around the world. And there is a reason. The most commonly cited features of premium products are exceptional quality (cited by 54%) and superior performance (46%). The most successful premium products are those that perform an important job for which previously available solutions were unsatisfactory or nonexistent.
Within home furnishings, that can be pinpointed to the bedding industry which has provided advances in technology that has enhanced the sleep of millions of people. Thus, bedding has become a major part of nearly every home furnishings retailer.
Roughly four in 10 global respondents said, according to Nielsen, they’re very willing to pay a premium for products made with organic or all-natural ingredients (42%) or environmentally friendly or sustainable materials (39%), and 31% say they are very wiling to pay a premium for socially responsible products.
Sale of products in the ‘premium’ tier, which Nielsen defines as goods that cost at least 20% more than the average price for the category, are growing at a rapid pace. Why? Today, consumers buy premium products for both rational and emotional reasons with the latter resonating more strongly in emerging markets where aspirations for status and accomplishment are high. ‘With increasing aﬄuence consumers are craving products that oﬀer a total experience', said Liana Lubel, Sr. VP, Nielsen Innovation Practice. Beyond basic-need products like chairs for sitting, tables for eating, sectionals for lounging, desks for enjoyment and business or beds for sleeping, many consumers are also buying based on how products make them feel, and premium products tap directly into a desire for products that provide specialized, enhanced air exclusive benefits.
Within marketing of these products, delivering on their expectations of the experience remains critical and the most successful premium products are those that perform an important job for which previously available solutions were unsatisfactory. There are huge opportunities that remain for retail and manufacturing brands in the premium space today, especially when there is a sizable gap between mass-marketing oﬀerings and the old premium tier. Remember, the consumer’s willingness to pay a premium is largely shaped by how consumers feel about their financial situation. Targeting this potential buyer translates into innovative integrated marketing strategies and techniques that will result in increased sales within this category.
The era of buying premium products is back with us again. For those who cater to this tier of consumer, today can by your day to enjoy being in home furnishings once again.
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The Rise Again Of Premium Products
By Lance Hanish
Lance Hanish is Co-Founding Partner in CNA|Sophis Integrated Marketing Solutions one of the leading marketing firms serving the home furnishings industry. An award winning writer, director, producer and advertising/ marketing consultant, he can be reached at:
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