As stories continue about how much the wealthy are suffering in this economic downturn, it’s interesting to note what people are still spending on. This article from the Wall Street Journal reports that many luxury firms have so far been resilient in more difficult economic times, finding consumers at the high and low end of the luxury market who are still willing to spend. The article includes examples from three individuals:
Jordan Shapiro, a 25-year-old Wall Street recruiter, says he isn’t sure what his income will be this year, so he put his plans for an African-safari honeymoon on hold. But he splurged a few weeks ago on a $3,000 Omega watch, which he considers an investment. “I hope it’s going to retain or gain value,” he says.
Stephanie Wickouski, a 55-year-old New York attorney, walked out of an Hermès store this week with a “heart-stoppingly expensive” $950 cashmere shawl. Despite the price, she says the shawl is a good value for the money, because it has “range and permanence,” meaning it can be worn over a dress, paired with a skirt or even worn on an airplane when it gets cold.
Margaret Schwartz, a 24-year-old assistant ad-sales representative in New York, shops for clothes at cheap-chic chain H&M. Yet she recently bought a $300 pair of Bulgari sunglasses — one of the Italian jewelry label’s least-expensive items — because she figured she could afford an “investment piece.” “Aviators are always in style,” she said, strolling past Tiffany’s Wall Street store.
This small amount of information about each individual is enough to categorize them as Lambda or Theta. I would consider Mr. Shapiro and Ms. Schwartz to be Thetas. In their mid-twenties, they consider their luxury purchases as investments. I would guess that they are also using their purchases as a way to stand out among their peers (Mr. Shapiro can be seen in his watch on Wall Street, and Ms. Schwartz’s sunglasses are “always in style.”). This desire to fit in is a typical Theta characteristic.
Ms. Wickouski, on the other hand, seems to be more of a Lambda. She recognizes how expensive her new Hermès shawl is, but the pleasure and utility she derives from it makes it completely worth it to her. She interprets “range and permanence” as something highly desired; the shawl makes her unique.
An awareness of what Thetas and Lambdas are looking for, and of what products represent to them, can help marketers reach these individuals more directly.
Photo by Doozle