For many years, product success was based on mass marketing, mass production, and massive retailers. But the world has changed. More and more people are choosing to pay a premium for fewer but higher quality goods. This trend of premiumization is creating new markets for Coach purses, BMW sedans, and Callaway golf clubs with younger, less affluent buyers. Of course this trend applies to high-tech purchases too – Nielsen reports that 29 percent of North American customers are willing to pay top dollar for their personal electronics.
While it’s arguably easier for upscale brands to slum it by releasing mass-market products, migrating brands upwards is feasible for manufacturers of consumer goods willing to embrace new technology. In fact, it can be downright lucrative. According to consumer electronics expert Markus Kick at GfK, a market analytics consultancy, equipping products with upmarket features has tremendous potential - even with today’s increasing saturation rates.
A relatively easy way to shift your product from the low-profit, low-growth segment of the market to the high-margin, high-growth segment is to add a display screen. This approach is being pursued by many manufacturers, something that can be seen by the rapid growth of the display panel market, which is expected to grow from USD $137 billion in 2019 to USD $167 billion by 2024.
Products with LCD or OLED display panels are in high demand in part because they make products easier to use. The allure of an elegant intuitive full-colour display helps drive a premium price tag. If your product looks entry-level, dated, or difficult to use, consumers tend to stay away. Another key aspect of the premiumization trend is that products become a reflection of the purchaser: high-tech products with attractive colour screens look more exclusive, signal affluence, and drive brand loyalty.
Premium high-tech products also tend to have more features than their more commoditized cousins. One of the great things about a screen, is that it enables new functionality through software, not hardware. For example, smart fridges allow consumers to view the contents inside, browse for recipes, coordinate family schedules, keep tabs on expiring food, shop for groceries, order fast food, and watch a TV show while cooking in the kitchen – all with a few finger taps. Moreover, a well-designed and intuitive screen can help consumers make the perfect cup of coffee, program their PVR without a degree in computer science, and navigate their car to their desired destination with minimal distraction. It’s these extra features that help command higher prices.
Adding LCD or OLED hardware is only a part of the equation, however. The user interface needs to be beautiful and well designed. You want your device to generate the fanatic loyalty that Apple’s product design engenders. That’s where Crank expertise comes in.
Great design is something we’re passionate about – it’s in our DNA. Storyboard makes it easy for developers and designers to collaborate on creating user interfaces that are attractive, intuitive, and user-friendly. We know that great products have to focus on details. That’s why we’re constantly exploring and sharing how to create better designs and better products.
Moving your product upmarket has not only the advantages of producing higher profit margins, it also creates tougher barriers to entry for competitors, and increases your brand's value for all of your other products. If you think premiumization could be a part of your next product strategy, download the Storyboard demo to see for yourself how it can make scaling up a much smoother process.
You may also want to check out Crank’s latest e-book where we explore this and many other related topics on building your next killer product.