The rise of “inconspicuous consumption”?

The rise of “Inconspicuous consumption” is being increasing discussed in the branding world. A key trend has been identified which seems to suggest that elite consumers have a growing affinity with “discrete” branding rather than traditionally packaged and displayed luxury branding.

A research report was highlighted in the Harvard Business Review recently. It appears that there are 3 key factors driving the change from overt consumption to “below the radar” branding. Identifying and responding to this core change in consumer expenditure and taste may be a crucial strategic consideration for the future branding of luxury goods in some market places. The evidence tends to be more anecdotal than scientific but research results seem to focus on particular trends.

The first factor that appears to be significant is that luxury brands have spread beyond their initial target demographic.

The growing middle classes in developing economies now have more disposable income and many luxury goods are now more affordable and desirable to a larger consumer population. The result is that many luxury goods are too “democratised” and have less appeal to the more elite consumer.

The second factor is that upper class consumers may be less drawn to overt status symbols.

This of course may be a legacy of the post recession period when there may have been a reluctance to flaunt wealth in a depressed economy.

A third factor is social media which has enabled the rise of niche brands which creates a tribe of like minded people across all social stratum able to send subtle signals to one another.

Jonah Berger, of Wharton Business School, postulates that,

“An educated elite have a significant preference for discretely marked products, subtle but distinct styles or high end brands that fly beneath the radar…”

This does create challenges for companies that are more geared towards conspicuous branding. Branding campaigns have generally developed strategies based on people consuming products that signal their social status to others. Many companies are responding to the change in emphasis. The Jumeirah Group of Hotels promotes the unique qualities of each of its locations to highlight local geography and culture – whether in the Maldives, Istanbul or Rome. The focus is on the “experience” that the traveller can have by becoming immersed in the location and environment rather than simply the luxury nature of the hotel facilities.

Companies may emphasise the subtlety of designs and logos or branch out into new brands for specific target markets. For example the conspicuous branding of Mercedes is successful in China but Daimler has also launched the lower key all electric Denza brand in the same markets.

J F Kennedy

January 2017