Sunday, April 13, 2008

Recession Watch, part V

On the recession front, I just read an interesting report in a recent issue of Fortune magazine.

“Affordable luxury” brands such as Tiffany & Co. and Coach are suffering in the current U.S. economic slowdown. As the middle class trims its sails, upscale retailers are abandoning the mid-priced luxury market. In tight times, the middle is no place to be.

Examples: Coach recently announced it would shift 40 of its nearly 300 stores into a more exclusive format offering higher-end bags (no more $300 handbags for luxe-class wannabes) and personal concierge service.

Taking the opposite tack, Tiffany is opening a new California store that will forgo the Audrey Hepburn diamonds and focus on inexpensive jewelry, such as $200-and-under silver baubles.

Clearly, these marketers are betting that the high end and the low end will both do better than the muddy middle through the current economic slowdown.

What is your business doing to adjust to today’s emerging consumer realities?

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