The New Luxury: Trading Up and Trading Down

Middling products and services are disappearing. Consumers are trading up to enjoy the emotional satisfactions of the "new luxury," even if it means sometimes trading down in order to afford it. Companies that transform commodities into luxuries, or create "masstige" products-affordable versions of super-premium goods-are moving off the demand curve. By offering genuinely new technical, functional, and emotional benefits, these companies can achieve higher volumes and margins, even in the current downturn.