(Photo by Robert Hradil/Getty Images for Sotheby’s)
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Written by Roshni Kavina
“Premiumization” is the word of the year, hinting at a world of “affordable luxury.” The term is not far from the traditional meaning of luxury. We all know that luxury goods are not affordable. It has always been for the wealthy. However, a growing number of true luxury brands are offering cosmetics and accessories at lower prices, opening them up to a wider audience and increasing sales of lower-value items while tapping into connections with the ultra-wealthy. It maintains the same ultra-premium image. It’s clearly a win-win for both brands and buyers.
Looking at this growth trend, it is interesting to consider what brands that enter the premiumization space will face. With disposable income estimated to decline in India in 2025, will buyers choose newly premiumized brands? The answer is simple. Traditional buyers stick with what they already like, while new entrants choose trends and badge value over everything.
2025 will be the year of luxury trend seekers. We will see even less mention of tradition and legacy, and a greater shift towards trendiness, accessibility and adaptability. Luxury brands will become more inclusive, more desirable, more relevant and more experiential than ever before. Rather than creating an exclusive world for a select few, these brands aim to connect with consumers by showcasing their beliefs and practices. This approach focuses on topical relevance, daily benchmarks, and conscientious conversations to drive media spending decisions, rather than creating a harmonious symphony of aspirational lifestyle choices. .
Essentially, any brand that enters the premiumization game is going to face a much tougher situation than before. They need to quickly adapt to consumers’ diverse mindsets, become better listeners, and be more in tune with their customers’ beliefs. Understanding consumers’ evolving needs and speaking to them in a way they value is key. Collecting third-party data becomes even more important and difficult as brands need to offer sweeter incentives for consumers to purchase and share their personal information. Above all, a brand’s purpose and mission take precedence over product effectiveness. For example, consider the alcobev category. All brands that fall into this category make their presence felt through brand extensions that emphasize product over consumption and culture over content. Here, as in other categories, understanding the consumer is just as important as getting the distribution model right, especially if you’re in the premiumization game.
So how should we as advertising agencies adapt to this evolving landscape? Good! Ideally as an end-to-end partner rather than a vendor. This change represents a new way of working, rooted in collaboration and deep involvement in the brand’s journey.
In the brave new world of 2025, will more luxury brands lead more ethical, experiential and honest conversations in their quest for premiumization? Some are already doing this But perhaps all that is needed is a gentle nudge from us to encourage others to follow. After all, premiumization is the truest and most humble path luxury goods have ever taken.
(The author is National Creative Director, Saatchi & Saatchi India. The information provided in the article is for general information purposes only.
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