I think the recession will ultimately mean the demise of a number of the luxury brands, price deflation on a scale not seen previously, and consolidation of brands in the marketplace, including so-called mass-market brands.
I think discounters will also come under pressure to justify their place in the sun.
In Australia I have noticed price deflation in apparel - creating a new set of price-value-quality expectations in the market.
To be provocative, I do not believe the marketing fraternity is well-equipped to understand and deal with this, and could itself well undergo fundamental change.
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from Pat Murray: Hi Stephen, good to hear from - interesting concept. My initial thoughts is one of down grading ie branded products to no name brands ( ie still trying to main lifestyle without major compromise, deferring purchases like car etc until more certainty of future returns. - so the high priced items will get hit the hardest first
ReplyDeleteI think if the product or service offered has a tangible and authentic benefit along with strong brand loyalty, there is a better buffer against the recession even though it might be a high priced item.
ReplyDeleteFor example currently at Kumfs, our sales are still increasing and not slowing down maybe because of the unique comfort and orthotic friendly features as well as a number of other unique benefits that is not available in many other brands of shoes or shoe retail experience in Australia and NZ.
Anne makes a great point - differentiation on known consumer benefits should definitely add a buffer. So many brands do not necessarily have this point of difference - what, eg. is the difference between Billabong, Quiksilver and Rip Curl ?
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