Business - January 3, 2018

Premiumization of consumer payment… Are we killing cash?

Premiumization has been around for a few years now, but as everything does, it’s changing. What is changing is the motivation behind consumers decisions.

Premiumization has created the bridge between the desirability of the luxury world and the function and necessity of the mass market. But more and more brands look to ‘premiumize’ their offers. The way to express this new focus on specialness needs is to be more than just skin deep.

Earlier this year a published research by Euromonitor International featured the future of consumer payment options. In “Beyond Cashback: Credit Cards and The Premiumization of Consumer Payments,” the paper shows how consumers around the world are favoring payments via credit/debit cards and other virtual methods.

Euromonitor projects an overall increase of 5.5% in the value of transactions through cards. In 2017 the value of transactions reached the level of 23.3 trillion. The amount of sales by banknotes is expected to decline by 1%.

Premiumisation occurs in a product category, market or industry where customers are willing to pay more for higher quality. The following are common types of premiumization.

Here are five tips for addressing premiumization today:

1)    Build desire – Using powerful creative thinking to identify and drive real difference, creating a new future definition, language, and space that does more than keeping up with the Joneses and indeed builds new expressions of desire.

2)    Create new occasions – It’s about adding new meaning, value, and opportunities but in an authentic way that connects back to the core of the brand – creating value but not valuing the brand out of its market.

3)    Reach different audiences – Luxury is no longer defined by clichéd expressions and instead leads on imagination and originality to assert its status in new ways, allowing brands to open themselves up to new audiences.

4)    Build long-term kudos – Premiumisation needs to come from the heart of the brand. It’s about staying true to that and finding ways to build on and heighten that specialness.

5)    Surprise us! – Those looking to master premiumization ultimately need to be influenced by the luxury approach – returning to its quintessential beliefs to create happiness and pleasure through ever more unique and individual future expressions.

Lake Nona Golf & Country Club