Tiffany-Wal-Mart . . .
it’s a strategy more of America’s biggest marketers are adopting. And it’s because the middle class is no longer growing - it is the top and bottom ends that are swelling.
Since l980 the wealthiest 20% of the population has grown by 2l% while the bottom 60% has stagnated or dipped. This has led to a greater polarization of income and the erosion of the traditional “mass-market” middle class.
Paine Webber has advised investors to follow the Tiffany-Wal-Mart strategy, as has Roper-Starch Worldwide, a New York based polling firm.
The time-tested strategy of appealing to the middle no longer assures success and many companies are treating the market as a two-humped camel.
Of course the middle class has not evaporated, but economic trends have altered its spending habits. The middle class have become inveterate bargain hunters searching for best buys in the big-box discount stores.
Nowhere was this more telling than in the l996 Christmas season. Tiffany and K Mart reported fourth quarter income surges, while mid-scale chains such as J.C. Penney suffered from weak sales.
Some companies have responded by slanting product lines much more heavily toward the households that have benefitted from the huge amounts of wealth created over the last few decades.
For example,the highest earning 20% of the population now accounts for 54% of the new car sales volume.
And, Gucci has pulled its line of luxury goods from Macys to concentrate on upper end stores, while Saks is directing much of its marketing effort toward its l00,000 best customers.
(By 2005, millionaires will control 60% of this country’s dollars.)
Then there are companies such as Gap using the “upstairs/downstairs” technique (the “two-humped camel” approach), making its Banana Republic stores more upscale while creating Old Navy stores - a hip lower-end chain to capture the market on the other side of the divide.
Companies that have failed to recognize this split have paid the price.
How will your company navigate the two-tiered market?
The spoils are likely to go to those companies that are best able to scale back the “mass” in mass marketing.
If your marketing plan calls for specializing in the upper- end niche, do consider the demographics of THE TIMES and CURRENTS readership.
Elegance, opulence, quality and style
CURRENTS, greater Cleveland’s monthly lifestyle newspaper has enjoyed resounding success with its readers and has been nothing short of a marketing phenomenon for its advertisers.
CURRENTS’ raison d’etre is to support the volunteers who, by their efforts contribute millions of dollars to charity and the arts.
CURRENTS is inserted in all 18,000+ paid copies of the TIMES, and is delivered independently to homes with $100,000 plus annual household income in the greater Cleveland area.
CURRENTS has carved a territory of enormous potential for its advertisers: a targeted market of approximately 63,000 upscale homes or 220,500 readers with the highest disposable income in the state.
CURRENTS will take you to the gala parties, regale you with the juiciest tidbits and keep you abreast of the latest on the “social ramble.” It will tease your palate, take you shopping and introduce you to the gifted and powerful, the influential and the interesting, the exciting and the extraordinary.
CURRENTS is fashion with panache: It is striking, stunning, haute couture to street-smart savvy. We are sleeker, slicker, and more sophisticated, and very very targeted.