As the market rebuilds post-COVID-19, there are big question marks about what to expect from premium and mass customers. It can be seen that traditional analyses are not really able to elicit adequate answers from professionals at the moment. However, we can see that despite price increases – often drastic ones if restrictions allow – for premium lifestyle products and services, there is no drop in sales. Certainly not for premium products. Rather, it is progress. It is also certain that there is a clear personality-based background to this trend, since it is, after all, our personality that guides our decision-making. Premium is a Ruler personality type’s doctrine, as brand, high price, and exclusive environment are all conditions that have the right value for the Ruler. However, it is also apparent that the “flashy” look and feel traditionally associated with brand and brand equity has generally been pushed into the background by the crisis. While it remains an important element of the premium, professionalism, real content, and value have overtaken it on the scale. In other words, Individual has been replaced by Expert in terms of secondary expectations.
Clearing premium markets
Whereas in the calm market conditions before the crisis, we very often found inappropriate groups of premium buyers in terms of ability to pay and standard of living, the first and perhaps most noticeable effect of the pandemic is the disappearance of these buyers. As they were generally in the lower-middle bracket in terms of their ability to pay, lured into the premium market only by their spending and brand-centric personalities, the first real impact of the crisis was to damper their aspirations. At rest, they have the will and the opportunity to stretch beyond their own blanket, but in a crisis, they are neither financially supported – everyone is more cautious – nor are they as strong-willed, facing a serious near-bankruptcy situation due to their previous bad purchasing decisions. Of course, everyone is to blame: the economy, the state, the neighbour, but it is always the same group of individuals who are most and most deeply affected. It is also a problem for the premium market, since, on the one hand, there is a serious loss of value, and on the other hand, when the market is “diluted”, ad-hoc customers appear in the premium markets, whose demand for service is also lower. This has been very well observed in the case of certain global brands, where the quality of service has deteriorated significantly, and the quality of the workforce has also declined, as there were plenty of customers and there were enough of them. What has not been realised is that in many cases, the real premium customer group has been lost as a result, and many of the big brands are only now beginning to realise this. After all, those who have real premium needs have expectations, especially in terms of service. But as the big brands have also moved towards volume sales, who cares if there are one or two complaining customers if sales have been good? They also ignored the fact that it was often the customers of highly categorised products who were dissatisfied, and that sales of products that were the entry threshold for the brand were skyrocketing. I myself have experienced a level of outrageous service from a decades-old French fashion brand or even a German car brand that was unimaginable ten years ago. I move in this circle, and obviously, as an analytical journalist, I have “whiter ears” to hear these comments, but it is clear that the advance of the premium market after the 2008 crisis has not been good for all brands, and the number of loyal, genuine premium customers leaving the brand has increased significantly.
The new premium community
Of course, there were times when this was not the case, and brands were able to enter the market and, within a year or two, build a huge name for themselves, something that was not really imaginable in the premium market before. They were simply able to keep up with the trend and appeal to target groups with a truly premium spending background and will, who were not spending their money loudly, but as members of an important, elite club, spending it nicely and not so slowly. There is now a serious checkpoint on who has brought what to the table in premium service and strategy over the last decade or so. For those who have done a good job strategically and operationally, even taking it down to the sales level, the viral crisis will bring another upturn, perhaps more serious than ever before. After all, the premium target group has been locked in for years and now they can start spending money again. And of course, they’re doing it as a favour to their favourite, truly premium brands. And what happens when everything gets more expensive? What’s wrong with that? At least only the people they are proud to ‘”ommune” with really get access to the product. Premium brands are now a community of consumers, and it makes a difference who makes up the community. These customers have certainly been able to progress in their careers during the crisis, because in addition to being able to assert their interests – a basic characteristic of the Ruler personality type – they are also content, professionally strong and respected – one of the basic characteristics of the Expert personality type – and of course they are needed in the workplace, in their own shops and in the marketplace in general. Strategically, my advice is that it’s also worth paying attention to those who will try to join the premium customer group, because first-time buyers are a significant potential. Gone are the days when an Individual from the middle class, in many cases, not a premium buyer, would get something large, spend a lot of money once and then often never be seen again. The true premium customer will try out the perceived premium experience to see if it is real. If he is disappointed, he will move on, but if he is satisfied, he will take it step by step as part of his life that he wants to see recognition, brand and professional content together in his personal life, just as he does in his work. The new premium looks like this. And the new premium customers need to be understood and the service network adapted to them. Even the biggest brands need to be careful who they look out for in their own stores, because they may just have a genuine premium customer who just wants to test whether or not they are being treated as human in simple clothes. And it is not right to look down on someone just because a salesperson – who may well never be a member of, say, the real premium-paying camp for the rest of their life – thinks that customer doesn’t fit in. Even at the premium end of the spectrum, we have to learn to be more human or at least smarter than we were before COVID.