Challenging economic times call for brands to focus on the premium customers says retail research institute
In challenging economic times, brands need to look to the premium end of the market to find growth, according to the Roy Morgan Research Institute.
The research firm has conducted a national survey of Australia’s high-spending premium consumers to identify their favourite brands. Three retail brands featured in the top 10, which the Institute said tells the story of the economy’s current woes.
Roy Morgan found Vintage Cellars to be the standout premium brand both nationally, while the David Jones brand appeared to retain attractiveness to premium spenders, despite its recent challenges.
Roy Morgan ranking of Australia’s top-10 premium brands
1. Vintage Cellars (Coles Group)
2. Audi
3. American Express
4. Qantas (international)
5. Harris Farms Markets
6. David Jones
7. UniSuper
8. Zara
9. Emirates
10. Lexus
Overall, Roy Morgan noted the economy is slowing, with consumer spending in decline. The proof is in the numbers as ABS data released last week showed consumer spending was outstripped by household saving for the first time in five years, while the retail sector has slumped to its weakest level since the 1990s. Yet that's not the only story.
Roy Morgan CEO, Michele Levine, noted consumer spending is being cut in some areas, while going up in others - the feature of a two-speed economy, driven by premium and budget consumers. In line with this, the term 'premium' applies not only to brands and experiences, but also to consumers, she said.
“The word ‘premiumisation’ is on the lips of business leaders eyeing off the economic fast lane while, at the same time, the slow lane is becoming even more commoditised. In today’s slowing economy the premium market is thriving,” Levine commented.
Roy Morgan said its research found there are 10 million Australian consumers in the economy’s ‘slow lane’, and 4.7 million premium consumers in the ‘fast lane’. Furthermore, 91 per cent of premium consumers are in the top-third of elective spenders in the economy.
To harness growth in challenging economic times, particularly with the prospect of a potential period of recession, brands need to be sure they appeal to premium customers, Levine said.
“Business leaders are now recession-proofing their brands by recognising (a) there is a two-speed economy, and (b) they can now reach, motivate, and acquire these truly premium consumers as their most valuable customers,” she added.
Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.
The current global COVID-19 pandemic is resulting in unprecedented disruption to every aspect of our lives as marketing and brand professionals, from the ways we work, to how our organisations operate, and the way in which we acquire and engage customers. So we’ve drawn on our wonderful CMO50 alumni community to explore different aspects of the crisis facing all of us right now.
The current world pandemic, COVID-19, and its tragic effects has created different and challenging situations for nearly every business. Every business sector is affected differently, depending on the nature of what your place in the world, creating the most unique situation most of us have ever and will ever experience during our professional lives.
People whose personal details and experiences signal they come from racially diverse backgrounds are less likely than anglo or Caucasian candidates to make it through the first cut in recruitment processes. Even if the organisation says it values diversity.
The impact of coronavirus is far reaching with the true impact on the economy and businesses is unknown. While there are a few categories and brands experiencing growth, for the most part the crisis is wreaking havoc for large and small operators across many sectors including entertainment, tourism, retail, fitness, services and the list goes on.
Why these voice assistants are so popular nowadays? Maybe I should get one too? I am really curious.
Jill Kim
Aussie brands jump on voice-interaction bandwagon following Amazon Alexa's local launch
Your page is very helpful. Thank you for sharing with us
Eriona Ajvazi
10 brands making a positive difference to a world in crisis
Extremely insightful and well written. Thanks for the great article!
Nicole Brodie Nahum
Why COVID-19 makes it more important than ever to move at the speed of the consumer
Blockchain is one of the fastest growing technology in today's digital era. Industries like banking and finance are already using blockch...
Aniket Singh
Can blockchain deliver on its big advertising promises?
Great article Emma. So many gems in there. Awesome to have you in the team!
One Small Step Collective
Why COVID-19 makes it more important than ever to move at the speed of the consumer