Premiumisation and Recession	1.5/5.0 (4 votes total) Rate: Select 1 - Terrible 2 - Poor 3 - Average 4 - Good 5 - Outstanding
Barry Goggin September 25, 2008

Premiumisation (or premiumization) has been a major trend for marketing this year especially in the food sector but also in many other areas. An article on premiumisation in the New York Times today caught my eye (you may need to register for free to read). Perhaps it was the contrast to the horrible financial news today that drew my attention to it. The financial news made this trend all the more relevant today than when I first heard this term at the beginning of 2008.

What is premiumisation?

Premiumisation is the creation of an ultra-luxury version of a product or brand. This trend has been taken to extremes in many markets such as Tasmanian Rain water captured in the rain forest in what is claimed to be the purest rainwater source on the globe.

The rich keep getting richer

The upscale market is growing: “the London-based Datamonitor research firm estimates that the global luxury market will jump 71 percent to hit $450 billion by 2012″. Luxury goods appeal to those who wish to show off their wealth, those who want unique items that distinguish themselves from the crowd, those who like to indulge themselves or those who reward themselves with premium items.

Being indulgent in a recession

What is interesting is that these upscale markets tend to be recession-proof. “Most of the wealthiest people are above the age of 50, and these people have been through recessions and downturns before so they aren’t so bothered by them,” said Milton Pedraza, chief executive of the Luxury Institute, a research firm in New York. “Many are conservative and patient investors who know that things are cyclical.”

Rich people are online

The wealthier a person is, the more likely they are to be on the Internet. Also rich people buy expensive goods over the less wealthy at almost 3:1 on the web. Luxury brands have a challenge appealing to the wealth online as they often depend on sensual immersion in a shop with senses other than sight being important such as smell and touch. Correspondingly their websites tend to be elaborate and graphics heavy trying to make a splash right on the homepage e.g. Fendi.com or JimmyChoo.com and continuing the brand characteristics into the online world.

Domaining and the luxury market

So how can domainers take advantage of this recession-proof market? Looking for domains that reflect this market should pay off. For example, I picked up PremiumChic.com back in January this year when I first heard about this trend. You could think of this being a site reviewing premium luxury products, selling them or blogging about them. If we get into a deep recession, I think these type of domains may become more valuable and I may even become tempted to develop it to test the market.

Are you taking any steps to recession-proof your domaining strategies or portfolios?

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