What is premiumisation?
Sophie Maxwell, Pearlfisher Futures Director
Premiumisation has created the bridge between the desirability of the luxury world and the function and necessity of the mass market. But as more brands look to ‘premiumise’ their offers, the way to express this new focus on specialness needs to be more than just skin deep.
From the breakthrough introduction of mass market premium and ‘Finest’ brands in the 90’s, to the launch of Grey Goose and the subsequent race to create the most refined superpremium vodka, premiumisation is now more prolific than ever and no less sought after. And finding the convergence between these two markets demands the right kind of magic from brand owners and marketers. As more brands enter the fray we see a continued shift in the premiumisation stakes and the question of what premiumisation means for brands is becoming increasingly dependent on drawing out the particular specialness inherent in a brand’s own equity.
Thanks to our work in international markets, we are seeing that premiumization is understood and appreciated in increasingly different ways. It can be category specific with, for example, rapid wealth creation in emerging markets bringing about new sources of demand for products like upmarket spirits. For example Diageo Reserve’s global boss James Thompson says his upmarket spirits brands are all consistently continuing to show double-digit growth (source: Financial review, http://www.afr.com). But this is often subject to context and location and how developed – or not – the territory may already be. It’s about understanding competitors, but above all culture, to decipher the semantics and mood of what premium really means for a particular audience and mindset.
Ask anyone to name favored examples of premiumization, particularly when it comes to brand and designer collaborations, and they would be able to name dozens. The list is now endless…and this has become a problem for the exclusivity they seek to create. Previously a route to creating desire, excitement and newness, the collaboration route has now conversely started to become a too familiar model. Borrowing or sharing kudos means that only the very best and/or original are able to partner their traits successfully or differentiate themselves through this approach.
Where the luxury/premiumisation landscape offers the possibility of radical change is through a new, marked, and following the example set by the luxury sector, continual disruption of category. We are witnessing the emergence of truly revolutionary brand languages that are rooted in a brand’s core and come from quintessential beliefs but bring new energy, excitement and impact – breaking established norms – to set radically new and different standards.
We have summarised our top 5 tips for addressing premiumisation today:
1) Build desire – Using powerful creative thinking to identify and drive real difference, creating a new future definition, language and space that does more than keeping up with the Joneses and truly builds new expressions of desire.
2) Create new occasions – It’s about adding new meaning, value and occasions but in an authentic way that connects back to the core of the brand – creating value but not valuing the brand out of its own market.
3) Reach different audiences – Luxury is no longer defined by clichéd expressions and instead leads on imagination and originality to assert its status in new ways, allowing brands to open themselves up to new audiences.
4) Build long-term kudos – Premiumisation needs to come from the heart of the brand. It’s about staying true to that and finding ways to build on and heighten that specialness.
5) Surprise us! – Those looking to master premiumisation ultimately need to be influenced by the luxury approach – returning to its quintessential beliefs to create happiness and pleasure through ever more unique and individual future expressions.
We will always aspire to a better quality of life. Luxury makes us feel special because it is special. Premiumness, as with luxury, establishes difference – our difference – but at a price we can afford and in ways that we can incorporate into our daily lives. If brands can develop a truly resonant understanding of what premiumisation means for them they can use it masterfully to take their brand to a new level, communicating desire through unique and truly special new expressions.
Originally published on Branding Magazine.