Study Reveals Price-Led Marketing is Missing Out
A new study of 6,000 shoppers by management consultancy Bain & Company has revealed that the top 20% of UK consumers make up a 60% majority of consumer product sales, signifying that brands need to up their game to attract this lucrative market demographic.
Across all types of products, these spenders are six times more valuable per head than 80% of shoppers, and 12% more valuable when it comes to jewellery brands.
Even at their least influential spending which is clothing, the top 20% of consumers still make up 47% of overall sales in the sector.
These findings reveal that the strategy of many brands to attract the majority of the cash-strapped public through price-led marketing rather than promoting premium items is not necessarily the best way forward.
Tory Frame, Bain's Head of Consumer Products, commented: "Even for something like chocolate, without spending that much money, someone can give themselves a treat by buying a premium or luxury item. The brands we see winning are those that have a good range of products and give consumers a clear functional or emotional reason to trade up."