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For several years now, we have been observing and commenting on the confusion and misunderstanding surrounding luxury consumption behavior. Analysts and critics have targeted the issue of choice, arguing that too many options thrown at consumers is ultimately a bad thing. Dated business and economic theory is called upon to explain why shoppers, like Stephanie in Chicago, where she works as an investment banker in a prominent financial institution, buys Prada, Pottery Barn, Rolex and so on, only "to impress."

While these analysts traditionally invoke the label of "conspicuous consumption" to explain shopper behavior like Stephanie’s, the thought that we incur marked premiums for goods with symbolic value (clothes, cars, food, etc.) only to signify our status in elite circles is really quite limited. Are we really to believe that all shoppers are engaged in the pretentious game of "staying ahead of the Jones’s" when they walk through the doors of Wegman’s or Dean and Deluca in search of a nice block of cheese? We not only think not, but our latest research shows it just isn’t the case as well.

At Tinderbox, we believe that contemporary consumers are curious shape shifters drifting amid a sea of everyday contexts. That is, we react very differently according to the product world at hand, to the occasion for our shopping and to the retail environment in which we find that product world. This behavioral shifting is not due to a unique personality orientation or some unmet emotional need; rather, it is culturally situated. Another way of saying this is to suggest that such behavioral shifting is based largely on how we use different kinds of products in distinct ways in our everyday lives.

For Consumers, the Desire for Better Quality is Everyday Destiny

Listening to consumers these days, there is startling clarity being voiced for the common desire of higher quality (a.k.a., premium) brands, products, services and experiences. Contrary to convention wisdom, as our Premium Food Experiences: Understanding the Consumer Redefinition of Quality report finds, this talk is not reserved for special occasions—premium is rapidly becoming an everyday expectation.

If your brand, product or retail shopping environment falls on the "cheap" end of the consumer’s experience rating scale, pay heed. Consumers from all walks of life are turning to premium quality and they are doing so for a variety of different reasons, reasons that exceed the limited scope of social status or emotional need.

Consumers that are neither particularly "well off" or have obvious unmet emotional needs participate in premium consumption arenas and do so within highly specific contexts. It is precisely these contexts (e.g., food, apparel, shopping) that we believe are critical to a proper understanding of premium consumption behavior.

One of the characteristics of the premium experience trend is that virtually all consumers now eat (at least some of) the same foods everyday that they are buying for special occasions:

• 82% of households indicate they have changed what they buy for special occasions (and)
• 94% of households indicate that they use the same brands and/or products for everyday occasions as they use for special occasions

Consumer culture has transformed legacy brands from benign symbols into rich experiences, creating new, greater expectations about how premium products should exist in everyday life.

Talking Quality

While many food and beverage marketers like to think consumers are willing to pay more for higher quality products, premium quality isn’t just about price. And, it would be a mistake to think that "premium" is something only affluent consumers can afford, that it is only about indulgent occasions or that it pertains to certain types of upscale "luxury" brands.

One does not have to look too deep into the major trends impacting the marketplace, whether it be the near–death experience of carbonated soft drinks, increased organic usage, the shift toward "all things fresh", "local" or "artisanal" to see that consumers are redefining the meaning of "quality."

American consumers have an evolving, culturally unique way about their understanding of premium. If we take the food and beverage industry as an example, consumers are not focused on specific "SKUs" but talk about food as an "experience." They eat for pleasure, for emotional wellness, and as an intellectual pursuit of a sophisticated cultural experience, rather than merely to satisfy physical hunger or because they got a bargain. Such attitudes are translating directly into behavior as consumers in their quest for higher quality foods and experiences are:

• Seeking distinctive flavors
• Seeking less processed foods
• Interested in locally produced foods
• Seeking handcrafted or artisan produced foods
• Willing to spend more on goods and services viewed as "premium"

Four elements are central to consumers’ meaning of premium. They are:

Quality: In relation to premium, quality is a central consumer mindset. Quality is informed by notions of privilege, exclusivity, and unique, long lasting workmanship and durable materials.

Experience: Experience is a key component of premium and is informed by sensory (e.g. scent, touch, visual) stimuli and emotional cues that are pleasurable or soulful (as in pampering or friendly service).

Limited: Consumers associate "limited" availability, categories and quantity with premium experiences.

Intuitive: Premium is also a felt, "intuitive" emotion that enriches life, feelings, wishes and dreams—also, consumers say they intuitively know premium when they see it.

The following language map illustrates the way in which consumers think and talk about premium.

Premium Is Here to Stay:

The desire to attain higher quality goods and services is not going away; consumers are tired of "average" to "no quality" in their everyday products. Regardless of demographic, consumers will continue, in growing numbers, to pursue premium products and experiences far beyond the foreseeable future. Consumers no longer feel a need to justify premium, they expect it and feel they deserve it.

Like it or not, our complex global economy and our flexible production and distribution systems have given consumers access to goods of unparalleled quality and distinction. Moving forward, food and beverage manufacturers, marketers and retailers should be mindful that consumers are making a dramatic shift away from what they view to be as industrial goods and shopping experiences and are increasingly seeking premium, well designed goods and services.

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