Personal values

Economic hardship raised consumer awareness of where they can save in order to spend on the things that really matter to them. While purse-strings loosen, individuals continue to economise and avoid irrelevant add-ons in certain areas (‘trading down’), enabling them to increasingly splash out on the brands and products they engage with most (‘trading up’).

How is this sub-trend evolving?

How it was

‘Trading up’ and ‘trading down’ within the same category
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How it is

Combining premium and budget elements within a single product or experience
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How it will be

People giving more attention to their mental wallet, budgeting for saves as well as splurges

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In-market examples from around the world

What: A small, upmarket grocery store and bakery that offers hard to find and high-end items.
Why: The grocery market in Tokyo is saturated by a few chains stocking the same brands in each store, leaving consumers who crave more stuck for access. A few new stores including Seijo Ishii give people the option to trade up and spend on ingredients, allowing them to explore and feed the “foodie” in their broad identity.
What: Monzo is reinventing banking one problem at a time, testing and implementing everything from app development to card distribution, taking care of regulation, and more. Using the app users can see what they are spending in real time and categorise in a way that makes sense to their budget (e.g. eating out, clothes, bills, etc.). The beta version currently in development includes a contactless MasterCard, zero fees, free and instant Monzo transfers, 24hr support, intelligent budgeting algorithms, and an API to build with.
Why: Banking has been complex and opaque for too long, and by creating a user centric, informal budgeting app Monzo is giving people the power to keep on top of their mental wallet in the digital space. They are asking their beta testing userbase to feed into the app development, creating a platform that truly works for the needs of the Millennial and Centennial generations.
What: Good and Cheap: Eat Well on $4/Day’ is a recipe book that promotes eating great food on a budget. The book aims to banish the mind-set that cooking requires great skill and is expensive.
Why: The success of this book reflects people’s desire to spend less and stick to budgets. Consumers are finding ways to squeeze as much as possible out of every penny and do more with less.
What: Germans love beer. However, Germans are also the inventors of Aldi. Few countries are so cost conscious when it comes to nutrition. Hence 5,0 Bier keeps its prices low, but its quality high, employing a business model that does not spend anything on marketing campaigns. The text on each can explains how they maintain that high quality/low price position.
Why: 5,0 Bier recognised that value for money means an inexpensive drink that doesn’t compromise on quality – and quite literally ‘does what it says on the tin’.
What: Nespresso lost the patent for their coffee pods, so budget brands have created capsules that work with the Nespresso machine, for example, Expressi by Aldi.
Why: Not only have Nespresso users traded down from a café experience to home-made coffees, there’s now the option to trade down again, for better value per cup, without Nespresso branding. The quality and price of the machine, however, keeps the experience premium.
What: Vueling, an airline with relatively budget pricing for flights, has just updated its service to include ‘VIP lounges’ in its Spanish operating airports.
Why: Consumers who choose not to spend fortunes flying can opt for VIP lounge access should they need a quiet working environment, or desire a more upmarket experience, appealing to short-haul flyers, who don’t need all the trimmings of a business/first class flight.
What: Tuskys, the Kenyan milk retailer, sells its milk from a vending dispenser in cafes and shops.
Why: By cutting packaging costs, Tuskys has reached a new demographic of people who would not normally buy good quality, pasteurised milk because of its high price in the market. Tuskys’ budget price, product safety and efficient route to consumer is growing the business throughout Africa.