In his previous book, Trading Up, Boston Consulting Group's Michael J. Silverstein documented the “new luxury” movement, where consumers were happy to pay a premium for goods they found emotionally satisfying. This new book looks at the other part of a market bifurcation, consumers (mostly women) who are on a trillion-dollar-plus hunt for “best value,” “best price,” and “best quality,” all in one. In other words, they are on a treasure hunt for the best deal. They both trade down to low-price products and trade up to premium ones.
In between the trade up and trade down markets, the authors write, is retail death: traditional grocers, department stores, and consumer goods manufacturers such as Kraft who are getting squeezed from above and below.
The winners? Bath & Body Works, Dollar General, Best Value Inn, Tchibo, LG, eBay and H.E. Butt, to name several. They all understand the emotional needs of middle-class consumers and, more than that, respect them for their pride in providing for themselves and their families.
The first half of the book studies the dramatically changing spending habits of middle-class shoppers over the last thirty years, this “flight to value,” which the authors believe has been caused by increasing levels of education, doubling of real income, and the downward pressure on consumer good prices fueled by Wal-Mart and other discounters. The data is driven home by the accounts of real shoppers.
The second half of Treasure Hunt lays out the steps, often by example, that companies need to take to win over the consumer who enjoys the thrill of finding a bargain. Dollar General, for example, makes special buys and limited quantity goods available in unexpected places throughout the store “to increase the surprise of discovering them,” the authors relate. Tchibo, a European purveyor of coffee and home goods, creates weekly themes with unique products. Shoppers are never sure what they will find when they walk in the door. “There is almost something irresistible about snapping up an item that looks good, is well made, is highly affordable, fits the value calculus, and brings an element of surprise into one's life.”
Treasure Hunt is very well written and ultimately convincing in its thesis that the middle-class consumer is more interested in value than rock-bottom price, takes enjoyment and even pride in shopping, and is ready to dump a large percentage of disposable income with the sellers who best meet her needs.
- Sean Silverthorne