What actually is Premiumization?
What do we mean by Premiumization?
The definition of premium is evolving. It is no longer defined by a high price point or vast displays of wealth but by the overall consumer experience with a brand.
Consumers want stronger relationships and personal connections with brands. The overall brand interaction now holds an equal (or potentially even greater) significance than the physical product or service itself - it now goes beyond this.
Premiumization is about the experience.
The latest insights report by adm Group agency (tag)Effectus explores the brands activating in this space, through omnichannel campaigns, personalization, exclusive events, immersive experiences and digital worlds to improve consumer experience.
Which brands have embraced the trend, and what is next for the Premium Experience?
Why is premiumization on the rise?
Spending habits are changing – customers are now spending more money, but less frequently. Consequently, when they do spend, they are expecting more from brands in return.
This shift can be largely attributed to a geopolitical and socio-economic landscape of uncertainty, causing consumers to re-evaluate the value they get when they spend, alongside response to the legacy of COVID, as the pandemic emphasized the value of occasions and memories over material possessions.
This is being spearheaded by Gen Z’s redefinition of hedonism; expanding the traditional pursuit of luxury and extravagance to obtain pleasure – into more sustainable and everyday approaches to achieve fulfillment, both culturally and individually.
Personal connection and social interactions are valuable to consumers – forcing brands to act in a more ‘human’ way. Leveraging premiumization to create memorable moments creates a greater consumer-brand relationship.
How are brand creating premium experiences?
The report looks at 5 key pillars brands can use - through minimal to large-scale investment - in order to deliver a premium experience to their customer. Download the full report for case studies and examples of brands already harnessing the opportunities they can generate;
Omnichannel
The connected journey between physical and digital is more important than ever to establish connections with consumers. 73% of consumers prefer shopping through multiple channels (Harvard Business Review, 2023), so seamless omnichannel pathways are imperative in creating a premium brand experience.
Personalization
How can brands leverage technology to create tailored experiences that make customers feel seen and valued?
In the US, 83% of consumers want their shopping experience to be personalized in some way (McKinsey 2020). A customized brand experience increases customer satisfaction and captures mental availability by establishing personal connections and making consumers feel seen and valued.
Unique & Exclusive
Consumers increasingly want to stand out - how can brand experience facilitate them to do this? A pivotal evolving trend in consumer motivation is the desire for individuality.
With 81% of consumers’ purchasing choices are influenced by their friends’ posts on social media (Forbes, 2022), experiences and interactions that generate social media-worthy moments holding increasing value in creating meaningful experience.
Immersive & Multi-sensorial
The key to a premium experience is a memorable one. One way to succeed is to scale up - immersive, expansive opportunities provide this. 63% of global consumers want brands to provide multi-sensory experiences (VML, 2023). The popularity of immersive offerings is here to stay.
Expanding Digital Worlds
The future of engaging and capturing the attention of customers undoubtedly lies in the opportunities presented by new and emerging technology.
With the Metaverse now reaching over 400 million users (BYBIT, 2023), we are entering new virtual worlds, and many brands are already activating in these spaces.
Read more from our Insights team