There are many reasons for why we eat. Knowing what food-consumption needs your brand-business satisfies is critical. Needs-based occasion-driven segmentation is fundamental to brand-business success. The latest example – phenomenon – derived from needs-based occasion-driven segmentation is the Food Hall. Some may say that a Food Hall is a channel, not a need. In a few cases, for some people, that may be the case. But, understanding why we eat helps demonstrate how a Food Hall satisfies a need.

Needs-based occasion-driven segmentation helps define a brand-business’ strategy and policies. Needs-based occasion-driven segmentation helps to answer the questions: Who is the customer? What are the customer’s needs and problems? What are the contexts (how, when where) in which these needs and problems occur for these particular customers? 

Global research studies over decades indicate that there are a handful of universal needs when it comes to eating. These big universal needs are either physiological or psychological, or both. These big universal needs are also multi-dimensional. For example, Hunger is, of course, a universal physiological need. The universal Hunger need has dimensions such as satisfying real hunger, satisfying energy re-fueling or satisfying a nutritional dimension. Break is both a physiological and psychological need. We may need a psychological lift or an escape. We may need a physiological time out. Or we may want not to cook, which can be both physiological or psychological. 

Self-expression is a need for why we eat. Self-expression has multiple dimensions including the need to be adventurous. Food Halls are where people can satisfy their need to feel adventurous via eating out.

According to The Wall Street Journal’s recent report, Food Halls are becoming ubiquitous eating destinations. The reason provided by The Wall Street Journal? People who moved to the suburbs during COVID want to replicate their city dining options of different cuisines and local chefs’ versions of different cuisines. The Wall Street Journal focuses on the real estate angle (profitable ways to use empty mall space). This explanation misses the point that Food Halls address an unmet personal need. 

Satisfying an unmet need – or solving a problem – are two of the best ways for a brand-business to generate high quality revenue growth. And, The Wall Street Journal’s explanation does not address Food Halls in places like Miami. In the Miami area, there are about 9 different Food Halls, including Shoma Bazaar, Julia & Henry’s, Lincoln Eatery, MIA Market and Oasis Wynwood.

Unlike a Food Court which is populated by fast-food restaurants, a Food Hall is a splendid collection of ethnic, gourmet and local craft eating and drinking opportunities. 

Food Halls offer creative dining experiences along with the breweries, grocery stores, butchers, food boutiques, artisan/local food products and entertainment. Food Halls contain multiple restaurants, usually with counter-service and communal seating. Food Halls are usually showcases for local chefs with safely-exotic cuisines such as Korean, Syrian, Nepalese, smoked meats, BBQ and rustic Italian, for example. Food Halls are eating destinations where local, artisanal chefs curate dining options.

There are no McDonald’s, no Cinnabon, no Panda Express. Forget Sbarro and Sonic. There are no plastic utensils. The Food Hall, according to online reporting, is “the cooler, hipper cousin” of the Food Court. These trendy, popular, experiential establishments are not just for East Coast or West Coast diners. Middle America is enchanted as well. Cities such as Omaha, NB, Reno, NV, Dunwoody, GA and Cincinnati, OH have Food Halls.  Minneapolis, Kentucky and Pittsburgh have Food Halls. Small towns across America have Food Halls. The Wall Street Journal states that there are 364 Food Halls dotting the American food landscape, with more on the way. A request for articles on Nexis for the last month turned up over 300 stories. The sixth-month request showed 1288 pages of articles.

Even Wegman’s, the very popular American grocery chain, is adapting to the Food Hall concept with its Astor Place, NYC, store. The Astor Place Wegman’s has a Food Hall offering sushi, salads, sandwiches, soups, pizza, wings, hot Asian cuisine and made-to-order and packaged Mediterranean options.   Food Halls are multiplying because Food Halls satisfy a need for self-expression. This is the definition of a market: people with a need. And, Food Halls are a growing need. Data indicate that the Food Halls market will grow to $71.69 in 2 years.

You might not want to participate in extreme sports, yet you may desire adventure. You might not have a passport. You might not want to travel outside your state or your neighborhood. Yet, you might not want to eliminate excitement and adventure from your life. Food is a safe, personally-expressive way in which to satisfy a need for adventure. Food Halls deliver the newest tastes and flavors. Food Halls challenge a diner’s taste buds. Food Halls provide the exotic within one’s own neighborhood.

Additionally, one critical aspect of self-expression is personalization. People want the ability to individualize a brand experience; they want to have it their own way. A Food Hall allows a diner to walk around to create a unique, individualized menu. The combination of a personalized menu curated by local chefs reflecting global tastes and dishes is an extraordinary way in which to optimize the marketing challenge of catering to the contradictory force of globalization, localization and personalization.

Needs-based occasion-driven segmentation shows that Food Halls are more than just a real estate play. Food Halls are a context for satisfying a driving customer need.

Here is a marketing truth: it does not matter if there is a recession or inflation: the best value wins. Value is a virtue.  But, brand-businesses do not just wake up one day and have value. Brand-businesses must develop and implement a brand-business value strategy. Value is everything.

What is value? Value is customer-perceived. Value is a brand-business’ expected total brand experience (functional, emotional and social benefits) relative to the brand-business’ total costs (money, time and effort) multiplied by trust. Marketing sets price. Customers declare value. 

In 2008, during the last serious economic crisis, The Wall Street Journal ran an article describing how consumers were cutting food expenditures.  The article noted that consumers were trading down to lower-priced items. And, those cans and boxes in the back of the pantry, those staples, were now on the table. 

Fast forward.  Pepsico, home of beverages such as Pepsi and Gatorade and snack foods such as Doritos and Fritos released its July 2023, second quarter earnings. In its analyst call, Pepsico stated, “Consumers are making some adjustments.  We’re seeing consumers shopping in more stores than before. They’re looking for better deals. They’re starting to look for optimization. They’re going to channels that have better perceived value. They’re buying more in Dollar stores or they buy more in mass or in clubs. So, every segment of the consumer is making adjustment.”  Just to be clear, to optimize means “to make the best or most effective use of a condition or situation. In this particular Investor-Relations-speak, optimize means changing behaviors.

C-suite executives tell Wall Street that consumers are recovering. Recovering does not mean wanton spending. Nor does recovering mean buying those C-suite executives’ brands. Recovering means customer adjustment to a new reality. In this Age of Adjustment, consumers are moving from conspicuous consumption to careful consumption; from status conscious shoppers to conscientious shoppers. Increasingly, the purchase decision-making model is: What is it? Why is it? Can I afford it? Is it an affordable value? 

The Department of Commerce reported that prices were slightly lower in August, 2023. But, many consumers are not “jumping for joy.” Prices are still substantially higher than before COVID-19 appeared. For example, Netflix has not only raised prices but eliminated its lowest tier. The average price of a gallon of orange juice in grocery stores is $9.18, as of October 7, 2023, according to The Wall Street Journal.

Consumers are adjusting to affordability. Adjusting to affordability is the new reality. If a brand is affordable, the brand is desirable.  True affordability represents an opportunity for the savvy marketer.

Once again, frugal is becoming fashionable. Frugal is not the same as cheap. Frugal is careful, prudent and economical. People are “eating their leftovers and cooking from scratch.”

This is problematic for brand-businesses. Over the past several years, brand-businesses have raised prices, and then, raised prices again. Brand-businesses have supported these price hikes with the phrases, “Our brands are strong. Consumers are still buying. We must protect margins.”

Due to price increase, Pepsico and other brand-businesses have lower volumes. Revenue growth comes from price increases. The Wall Street Journal commented on Pepsico’s latest (October 2023) earnings call.  Pepsico’s organic volumes were down 2.5% from a year earlier demonstrating that Pepsico’s revenue growth derived from price increases. In the US, Frito-Lay volumes were flat and beverage volumes fell 6%.

The Wall Street Journal stated, “One main concern among investors has been that consumers are exhausted with price increases and are starting to cut back, which makes weak underlying volumes especially worrying.”  Pepsi Chief Financial Officer said there are “… signs of caution among consumers, such as trading down to cheaper items.” Furthermore, Pepsi CFO said, “Sales at convenience stores and food service locations, places where consumers typically cut back first when they hit economic trouble have remained robust, with the latter still growing by double digits.”

It is not just Pepsico. Its rival Coca-Cola stated in its recent earnings call that Coca-Cola sales were flat. Coca-Cola explained: “We have seen some willingness to switch to private label brands in certain categories. Across the sector, consumers are increasingly cost-conscious. They’re looking for value and stocking up on items on sale.”

Kellogg’s, at the time of its spin-off of cereals into a stand-alone company, indicated that consumers were buying more private label cereal brands as some boxes of brand-name cereals were priced at $8. The CEO of Kellanova, the Kellogg’s cereal spin-off, told investors not to worry. Customers will become used to higher prices. Sales volumes will increase. This “sticker shock” will dissipate.

Procter & Gamble just beat Wall Street’s expectations. However, as CNBC points out, P&G’s volume fell for the sixth consecutive quarter. P&G has “consistently raised prices (over the past 2 years), causing some consumers to choose private label alternatives.” Now, CNBC states that the volume declines are less than the previous year. However, P&G’s baby-feminine-family care segment experienced a 3% fall in volume. P7G’s grooming segment experienced a 2% volume decline. P&G’s fabric and home care segment experienced a 1% volume drop. 

Same with Nestlé: organic growth driven by price increases.

Investors want brand-businesses to focus on volume growth. Investors believe the customer has become weary of price hikes. Investors are shining a spotlight on a major, endemic, brand-business concern. Brand-businesses confuse value tactics and value strategy.

For example, 

• Reducing deal-focused messaging to less than 20% of expenditures is a strategy 
• An Every Day Low Price is a strategy
• A whole range of offers perceived as a best value is a strategy
• Engineering value into a brand is a strategy

But,

• Short-term price promotion is a tactic
• Special occasion pricing is a tactic
• Continuous price increases are a tactic
• Smaller packages at the same price is a tactic

Brand-businesses must create a brand-value strategy. This is not a calendar. A calendar prioritizes tactics. A brand-value strategy is a plan. It is a plan to create trustworthy brand value.

A value strategy affects R&D, not just the marketing. Brand-businesses must engineer value into the product. Example: Whole Foods 365. A brand-value strategy is global or national. Tactics are local. Tactics are how brand-businesses execute a strategy locally. 

A goal of a brand-value strategy is “amazing value.” Amazing value is not offering a lot for the money. This is brand-value tonnage.  Amazing quality is a great brand at a great price. A great brand with a price that will entice. Staggering value is unique, high quality at a price that amazes the customer.

Here are seven must-do’s for creating a brand-value strategy:

1. Have a unified view of “amazing value.” Everyone in the organization must share the same understanding of what amazing value is at the enterprise. Alignment is critical.
2. Have a discipline for pricing, including a focus on price elasticity.
3. Avoid the obsession on margins. Of course, margins are important. But, obsessively focusing on margins marginalizes the brand-business.
4. Create branded value. Creating extraordinary value is being responsible. Engineer value into the brand. Engineer in the brand its unique, high quality and offer that brand at a great price. The customer should say, “Wow. I did not think I could buy this brand at this price.”
5. Create brand-value that excites. Remember, the price must entice. What is the powerful price point relative to alternatives? Move from fair value to amazing value.
6. Value, not price, must be a consistent part of the brand’s Brand Promise. 
7. Focus on permission marketing. Give consumers permission to buy the brand-businesses products. Convenience? Quality? Wholesomeness? Uniqueness? Service? Price?
8. Avoid constant promotions. Constant promotions create deal loyal rather than brand loyal customers. As Pepsico learned. After serious and continuous promotions on bottled water, Pepsico saw the promotions drive volume. But, these gains disappeared once the promotions stopped. According to The Wall Street Journal, grocery store promotions are proliferating. “Food makers are responding with deals. But, even with these deals, consumers are paying “more than one third more” than before COVID-19.

In the Age of Adjustment, value is the eye of the storm. This is where it is calm. Achieving the right price and becoming the best value keeps a brand-business ready to weather anything.  And, not just for today. but for the times ahead.

It is not a cliché: the best value wins.

Price hikes to save margins and to diminish effects of inflation weaken customer demand. Having a strategy to create branded value that excites at prices that entice is the way to get through the typhoon of tight times. 

Selling the category rather than selling your brand is brand-business mismanagement. Selling the category means the brand-business leadership does not know what is relevant and differentiated about its brand. Selling the category when your brand does not know what is its relevant differentiation plays into competitors’ hands.

From 1981 to 1983, Campbell Soup’s advertising campaign was, “Soup is good food.” Consumers agreed. But, soup buyers did not purchase Campbell’s. Consumers purchased competitive brand Progresso Soup. Campbell’s campaign reminded consumers about the benefits of eating soup.  The campaign did not provide the benefits of eating Campbell Soup.

Once, Kellogg’s ran a campaign about the benefits of breakfast. Again, consumers agreed. Kellogg’s reminded consumers of the benefits of breakfast. Consumers did not choose Kellogg’s products, however. Consumers went to Starbucks and McDonald’s. Kellogg’s did not remind consumers of the benefits of eating Kellogg’s cereals. Letting people know that breakfast is an important meal is great for overall healthfulness. But, that does not mean we will all reach for a box of Frosted Flakes or Froot Loops or Kellogg’s Brand Buds.

The latest Kellogg’s data show that Kellogg’s cereal business is struggling again. So much so, that Kellogg’s has just spun off the cereal business. Now, management can focus on the more profitable and exciting snack foods like Cheez-its and other fun every day foods, like Pop Tarts. W. R. Kellogg must be turning over in his grave.

Selling the category means selling the category benefits. Selling the category means not selling the benefits of your brand in that category. Category benefits are the “green fees” for a brand. Category benefits allow a brand to compete. But, category benefits do not communicate a brand’s relevant differentiators. You may persuade consumers with your views on the category. But, consumers are not necessarily persuaded to use your brand, even when flooded by advertisements.

Which brings us to Peloton. 

For some reason, Peloton appears to avoid communicating its benefits to customers. This avoidance has been ongoing. In the past, the communications were all about price. But, now, it is different. The new campaign features instructors. There has been a lot of hype around this new Peloton campaign that includes Peloton instructors. Yes, the instructors are compelling individuals. But, having an instructor telling customers that they should get off of their butts, listen to their inner voice and move may not sell Peloton memberships or hardware. In fact, Bowflex, another indoor fitness training offering, communicates the exact same message as Peloton in its current TV advertising. Bowflex states: the best you is inside, listen to that inner voice and move.

Selling the basics of the in-home exercise category may sell the category. But, as with Campbell’s and Kellogg’s, selling the category does not mean selling your brand in that category.  Why should I select Peloton over Bowflex? Is it because the instructor tells you that you can do this?

Peloton’s selling of indoor exercise is a good thing. Selling movement is a good thing. But, what makes Peloton movement different?

A noted biochemist who focused on living well once said, “If you eat it and you do not move it, you sit on it.” NPR commented on a study indicates that for those sitting at a desk, 5 minutes of movement every 30 minutes reduces your blood sugar, your pressure and makes you feel better. NPR is partnering with Columbia University on another movement study. Movement is good.

But, is movement the reason to buy into Peloton? Athletic shoes can offer movement as a benefit, too. So can free weights or NordicTrack. What are the benefits of movement? It is mystifying that Peloton does not appear to want us to know why we should move with Peloton rather than from the array of competitive offerings of in-home fitness. There are many functional, emotional and social benefits worth telling.

Dollar General (not Dollar Store), the retailer focused on serving the financially and geographically underserved, promotes its brand using benefits. In a recent interview with Deloitte, the global services group, Dollar General CMO said, “Our overall goal remains the same: to position the brand as the most convenient option to stretch customers’ dollars.” 

Dollar General communicates how Dollar General fits into the retail landscape. Dollar General communicates that it is a small-box discount retailer. Dollar General “… drives purchase consideration by telling the story of the categories we carry, the national brands on our shelves and the low prices we offer.” Additionally, Dollar General saves its customers money and time because those customers do not have to travel to the grocery or big-box store that can be 20, 30 or even 45 minutes away.” Dollar General can be the store for fill-in trips and for fuller fill-in trips due its array of choices.

For most of its stores, Dollar General operates in communities of 20,000 or less inhabitants. Sometimes Dollar General is the only store in town. Dollar General knows that connecting to its core mission is essential. 

Peloton’s communications have not connected with Peloton’s core mission. A brand must be in sync with its desired spirit. Mission statements express the brand’s intent, its purpose. Peloton’s prospectus offered the following: “Peloton uses technology and design to connect the world through fitness, empowering people to be the best version of themselves anywhere, anytime.” Clearly the instructors are aligned. You understand this if you actually take classes. But, for a prospective customer, the brand’s purposeful message is unstated. There are probably a lot of people who would appreciate the opportunity to participate in Peloton’s world view. 

Describing Peloton’s business model, a Harvard Business Review article concluded that even though participants are in different locations, participants exercise “…with a virtual community of peers and instructors” and “… the brand’s meaning extends beyond what they would experience with the bike alone.” 

This is true. But in order to increase owners/subscribers, Peloton must share its meaning with prime prospects. Peloton’s meaning has to be meaningful to both users and like-minded others. Right now, Peloton’s uplifting, positive, you-can-do-it message is not communicated to the uninitiated. It is a best-kept secret.

Not even COVID-19 changed the trajectory of demographics. And, although data in The New York Times indicates that global population growth may end in 2080’s, we are currently living in a world that is getting older and younger at the same time. Demographics are a marketing reality. And, brands, such as iconic Southern fare restaurant Cracker Barrel, now face a strategic conundrum. 

The older and younger dichotomy is due to the longevity of Boomers (born between 1946 and 1964) at one end of the spectrum and the cohort of Millennials (born between 1982 and 1996) and Gen Z (born between 1997 and 2012) at the other. It used to be that the demographic charts had one big bulge: the Boomers. This bulge just moved up the age range as it matured. Now, with the addition of the Millennials, the demographic charts look like a two-humped camel—a two-humped camel that will be with us for decades. The Boomer generation has longevity. The Millennial generation is just as big. Younger Gen Z already has impact. 

It is popular in the current marketing environment to focus primarily on Millennials and Gen Z and the even younger demographic groups (Gen Alpha born starting in 2010s). For example, this is what Meta is doing with its AI bots. That said, network television is seeing gold in the silver-haired market. But, for many marketers, over the next decade, brands will need to be relevant to two huge groups of people who have different values and view the world through different lenses. 

The current two-humped demographic reality – lots of older people and lots of younger people – presents opportunities for brands. Boomers have discretionary income. Millennials and subsequent younger cohorts rule the social media environment. These two demographic forces not only change the way we communicate and relate to one another. The older-younger landscape changes the ways in which brand-businesses must operate.

Two massive age cohorts with different worldviews, different values and different complexities pose an interesting conundrum for brands: which of these age groups should be targeted? What will a brand need to do differently? How can we attract and maintain both cohorts? These are interesting challenges not just in terms of product, service, store design and utility, but also in terms of communications, including language and package design. 

Because the world is getting older and younger at the same time, brand-businesses must decide what their strategies will be to address these two cohorts. 

This is the conundrum that Cracker Barrel must solve.

Cracker Barrel, born in 1969, is known for its Southern country store theme and menu. Its advertising communicates freshly made food at a fair price with a touch of care. This refers to over 20 meals for under $12. Its tag line is Take care now. 

Cracker Barrel describes itself as: “Cracker Barrel Old Country Store provides a friendly home-away-from-home in its old country stores and restaurants. Guests are cared for like family while relaxing and enjoying real home-style food and shopping that’s surprisingly unique, genuinely fun and reminiscent of America’s country heritage…all at a fair price. The restaurant serves up delicious, home-style country food such as meatloaf and homemade chicken n’ dumplins (sic) as well as its made from scratch biscuits using an old family recipe. The authentic old country retail store is fun to shop and offers unique gifts and self-indulgences.”

Originally, Cracker Barrell was seen as a way to sell gasoline, as its founder worked with Shell Oil. Over time, Cracker Barrell opened stores without gasoline pumps. The menu broadened. And, so did its array of “gifts.”

According to The Wall Street Journal, “Cracker Barrel Is Stuck in a Generational Gap.”  Apparently, Cracker Barrel’s core customers make it difficult for Cracker Barrel to attract younger guests. This will need to change.

About 43% of Cracker Barrell guests are 55 years old or older. A lot of the sales within this core group are “tchotchkes” such as wooden puzzles (approximately 300,000 a year) and rocking chairs (approximately 70,000 a year).

Efforts to make inroads with younger customers have strained Cracker Barrel results, affecting comparable store sales and the brand-business’ stock price (down at least a third in the past half year).

Many casual dining establishments have a laser-focus on younger consumers. But, for Cracker Barrel that is probably not the best path to high quality revenue growth. Cracker Barrel needs to design a strategy that maintains its bonds with core customers while is attractive to new customers.

From a brand-business standpoint, there are two important factors.

First, it is possible to address more than one target audience without alienating another.

During the 2004 McDonald’s turnaround, McDonald’s adopted multi-segment, multi-dimensional marketing identifying three targets with different needs:

• Great tasting food and fun for kids
• Healthful eating for young adult moms
• Satisfying food for young adult males

The beer brand Modelo uses multi-segment marketing. In a report from The Wall Street Journal, Modelo focuses on its Hispanic core base and a non-Hispanic audience. “The brand strives to ensure its marketing appeals to both its core Hispanic and growing non-Hispanic customer bases, rigorously testing its ads with both groups to avoid alienating either one…. And, it (Modelo) spends heavily to run those winning ads.” 

A brand like Cracker Barrel can address multiple segments of customers. Cracker Barrel can be a multi-segment brand. It is critical to recognize that people are multi-dimensional, not uni-dimensional. To be relevant, Cracker Barrel must be also be multidimensional rather than uni-dimensional.

A multi-segmented, multi-dimensional approach has important strategic implications for communications, media, product development, pricing, promotion, restaurant design, packaging and so on. For example, the increased use of non-traditional media to communicate multi-dimensional brand messages to our multi-segmented markets.

Therefore, second, Cracker Barrell should employ a Brand Journalism approach when communicating with its segments. A multi-segmented, multi-dimensional approach has important strategic implications for communications, media, product development, pricing, promotion, restaurant design, packaging, and so on. For example, we are using non-traditional media more and more to communicate our multi-dimensional brand message to our multi-segmented markets.

Brand Journalism means telling the many facets of the Cracker Barrel brand story … and yet you know it is Cracker Barrel.

No single communication alone tells the whole Cracker Barrel brand story. Each communication provides a different insight into the Cracker Barrel brand-business. 

Modelo manages messaging to multiple audiences using advertising that appeals to both segments. Attracting and maintaining both Hispanic and non-Hispanic customers are key to Modelo brand-business-building. Modelo shows its advertising to its Hispanic core “… to confirm that none of its messaging was straying away from the people who had made it (Modelo) what it was.” 

With Brand Journalism, communications create a brand magazine, with each article a different story. Each edition is different: different subjects, different topics, different messages, all coming together in a dynamic, interesting, relevant; ever-evolving Cracker Barrel brand-business magazine.

Brand leaders are the editors of this brand magazine. As editors, brand leaders look not only at the subject matter, but also the style. For example, an article on Bruce Springsteen for the New Yorker must be written in a very different style than if it were written for Rolling Stone.

Cracker Barrell does not have to abandon its core customer group. And, Cracker Barrell should not do this anyway: core customers are valuable. Cracker Barrel must continue to adore its core. This does not mean that Cracker Barrel cannot focus on new customers as well. Every brand must both keep customers and attract new customers, just not at the sake of alienating the core base. Multi-segment marketing using a Brand Journalism approach to communications is a good place to start.

Recently, Ian Schrager, entrepreneur, hotelier and co-founder of famed Studio 54, decided to create hotels that are luxury but without the services and amenities. Mr. Schrager’s hotel vision is luxurious experiences that do not depend on multiple on-site staffers and niceties. His vision is a segment he calls Economy Luxury.

According to Mr. Schrager, the idea for an Economy Luxury segment stems from his observation that “… luxury has a new and different meaning today. Luxury right now is having freedom – freedom from hassles to make everything easy, freedom of time, freedom to devote your personal time to the things that matter to you.”

Always an astute observer of cultural changes, Mr. Schrager is clearly on to something. Look at watches.

Swatch Group, the watch group that owns Swatch and other brands, including Blancpain Breguet, Certina, ETA, Glashütte Original, Hamilton, Harry Winston, Longines, Rado, Omega and Tissot, has a similar vision about the evolving nature of luxury. 

Last year, in order to generate renewed interest in the affordable Swatch brand, Swatch joined with its sibling brand, Omega, to create the MoonSwatch. According to observers, the MoonSwatch created an offering called Budget Luxury. The customer buys heritage, status, authenticity and exclusivity as well as savvy, one-of-a-kind, in-the-know fun at an affordable price.

The March 2022, Swatch launch of the Omega x Swatch Speedmaster at US $260 was a massive hit. The Omega x Swatch MoonSwatch design resembled the iconic Speedmaster known as the Moon Watch, worn by US astronauts. At its release, the MoonSwatch generated such enthusiasm that crowds surrounded Swatch stores around the world. Bloomberg BusinessWeek reported that in Geneva, hundreds of buyers “snaked around the block” and there was police presence to ensure safety. 

The response to MoonSwatch was so extraordinary that Swatch Group released a limited edition of the “most desired” MoonSwatch, the Mission to Neptune. Mission to Neptune became a collector’s item after its original release.

Now, following the success of MoonSwatch, Swatch Group just dropped the 5-watch series Blancpain x Swatch Scuba Fifty Fathoms Collection. Each Blancpain x Swatch Scuba Fifty Fathoms watch reflects the ethos of one of the world’s five oceans. Prices start at US $400. The average price of a Blancpain is US $12,000. The original Blancpain Scuba Fifty Fathoms, a 70-year-old watch, designed for divers, was featured on the wrists of oceanographer Jacques Cousteau’s team for the filming of the Oscar-winning documentary The Silent World. Its list price was US $14,000 but can sell for as much as US $21,000.

On September 7, 2023, there was a Blancpain x Swatch Scuba Fifty Fathoms 5-page advertisement in The New York Times featuring each of the 5 styles, designs and colors: Artic Ocean, Atlantic Ocean, Indian Ocean, Pacific Ocean and Antarctic Ocean.

The Blancpain x Swatch Budget Luxury approach is similar to Ian Schrager’ idea: the concept of attainable luxury for those in the know. The concept of affordable luxury seems to be increasing. People want obtainable opulence. People want the paradox brand promise of economical extravagance. And, brands are offering inexpensive indulgences to satisfy this want.

For example, H&M partnered with Karl Lagerfeld. And, as reported in The Wall Street Journal, Barney’s, the iconic New York City fashion emporium is partnering with affordable teen fashion store Forever 21. Just last week, Forever 21 launched a Barney’s New York collection of “… suiting blazers and trousers, oxford button-downs and turtlenecks, denim jackets and pants, leather and faux-cashmere outerwear.” Missoni, the luxury Italian fashion house, teamed with Target and the clothing items sold out immediately. 

And, just recently, Skechers, the California lifestyle and performance footwear brand, dropped the Skechers x Snoop Dogg, described as “high on style.” Ad advertisement appeared in The New York Times Style Magazine.

In the 1960’s Howard Johnson’s restaurants, the ubiquitous roadside eateries, amped up their menu with food created by chefs from Le Pavillion in New York City and enhanced the dining experience with waitresses dressed in Dior-designed uniforms. Howard Johnson’s was considered “affordable glamour.”

The French branding expert, Jean-Noël Kapferer, coined the concept of Abundant Rarity. Abundant Rarity refers to the upmarket trend of luxury items being available but exclusive. Abundant Rarity is a challenging balancing act for luxury brand owners. There are those who believe that the idea of being available everywhere, even if exclusive, makes the brand not luxury. These observers believe that once a luxury brand becomes ubiquitous, it becomes less exclusive. And, being exclusive is considered a critical element of luxury.

Budget Luxury takes a slightly different approach. First of all, Budget Luxury does not indicate that the offering will have major availability. Exclusivity, yes; but not necessarily availability. In fact, many of these budget luxury brands are limited editions. Second, the co-branding brand architecture policy changes the exclusivity dynamic.

Co-branding is a fast way to create a brand. It requires borrowing benefits from each brand. Using co-branding, the watches Omega x Swatch and Blancpain x Swatch maintain exclusivity by virtue of the luxury brand heritage. The watches have luxury authenticity but are offered at Swatch prices. With co-branding, the co-branded brand shares in the brand promises of both brands, in these cases Omega and Swatch and Blancpain and Swatch. The brand benefits of the three brands remain. Omega and Blancpain are not demoted or sullied by the co-branding policy. Both have their original portfolios of ultra-luxury offerings at ultra-luxury prices. The co-branding adds the modernity, hipness and fun of Swatch to Omega and Blancpain. At the same time, the co-branding adds authenticity, prestige and elegance to Swatch.

For the majority of the Budget Luxury brands, the brand architecture that uses the co-branding approach allows the offerings to be considered “small luxuries” that satisfy a want not a need. The symbiotic relationship of two contradictory brands together provides the reason to believe in both luxury and affordability with in-the-know status. There is unique social currency associated with Omega x Swatch and Blancpain x Swatch.

The paradox of these Budget Luxury brands is appealing to consumers, as the crowds outside of the Swatch stores demonstrate. Having an understanding of brand policy is critical. Creating policy on how brands in a portfolio relate to each other is an under-appreciated strategy. But clearly, a brand architecture policy can lead to enduring profitable growth.