Why cheap is so successful?
Michael J. Silverstein (VP with Boston Consulting Group)
Silverstein has authored two books, each highlighting a different end of the Fidelity-Convenience Tradeoff. In Trading Up he looked at the Premium Product Market and the willingness of everyday people to selectively Trade Up in their purchases.
Treasure Hunt explores the “High Convenience” side of the market … the low cost, easily available products that increasing capture much of total consumer spending. Silverstein sees this not as a dismal settling for whatever is cheap, but a vibrant innovation filled part of the market, where customers derive excitement and satisfaction from deals and their own frugality.
The numbers are certainly stunning. Wal-Mart is not alone in capitalizing on people’s willingness to embrace products that are “good enough” to meet their needs.
There are lots of examples of successful High Convenience markets. There are also many illustrations of businesses that found themselves stuck in the “Mushy Middle” … neither a premium experience worth Trading Up for a deal with the Treasure Hunt.