Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: East

Column: Luxury marketing for masses fastest growing retail segment

The luxury market is the fastest growing segment in America’s retail marketplace.

This is not the traditional luxury market of the rich few. It is luxury for the masses or "trading up. It was a major topic at the recent 5th U.S. Pima Industry Seminar in San Diego where some of the world’s most successful apparel and home furnishing manufacturers and retailers talked about the future of American Pima cotton in this changing retail market.

It is retailers like Brooks Brothers which has successfully differentiated itself from the mass marketers by selling affordable luxury like $95 cotton dress shirts to the masses.

It’s people like Jess Jackson of Kendall-Jackson who converted middle-market wine drinkers into upscale wine drinkers by offering affordable quality California wines. Jackson was one of the subjects in a Harvard Business School analysis of this trading up phenomenon.

This growing consumer segment is the 47 million households earning $50,000 and more per year with $3.5 trillion in disposable income willing to pay 20 percent to 200 percent more for well-designed, well-engineered and well-crafted goods.

Ironically, this disposable income is coming courtesy of another rapidly growing segment of the retail market, the mass merchandisers like Wal-Mart, Costco, Home Depot and Lowe’s. These mass merchandisers offer heavily discounted prices on many basic goods people need for everyday living, and according to the Harvard study, freed at least $70 billion in 2001 for this new luxury spending. And, the trend is likely to continue.

This new wave of luxury for the masses is even surprising retailers like Brooks Brothers which has sold 3 million of the high end dress shirts in 3 years.

Luxury for the masses is a ready market for things like $28 socks Sea Island cotton socks and $200 Supima cotton denim jeans. We are not talking about the so called "niche" market, but large volume retail items.

There is an emotional factor in this because so called middle market consumer are feeding their aspirations for a better life by buying new luxury goods they can afford.

This trend bodes very well not only for the future San Joaquin Valley Pima cotton, but all valley cotton. There is an emerging trend to bring more quality differentiation between SJV cotton in general and other cottons with even higher quality SJV Pima and Acala varieties. The high quality Ultima variety from California Planting Cotton Seed Distributors is an example of that trend.

It was exciting to hear of opportunities in luxury for the masses retailing not just for California cotton, but for all California commodities. It certainly points out that consumers will pay for quality, and no one produces quality better than California agriculture.

It was also fascinating that the 800-pound gorillas of retail marketing, Wal-Mart, Costco and others are not the totally bad guys as they are often portrayed. They are actually economic contributors to this new market.

For all the negative talk of retail consolidation and other depressing news affecting the future of so much of what farmers producer, it was refreshing to learn that there are opportunities for those will to create them. Agriculture is no longer just about growing. It’s all about finding markets.

e-mail:[email protected]

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.