How mid-priced retail products became status symbol for young shoppers

Jenny Lei says that when she started bag company Freja, she thought about how much she would personally want to spend on a work bag as a 20-something in New York.

“I think a fair reward is less than $300. I’m starting to bargain with myself on that,” says Lei, 30, who founded Freja in 2019 after struggling to find a suitable reward. Working bag for a job interview. Lei says Freja bags made from vegan leather now sell to tens of thousands of customers each year, especially those in their 20s and 30s, for $258 to $398 — more expensive than Baggu’s $62 nylon option, but cheaper than a $2,700 second-hand Goyard tote.

Some marketing and retail experts say a growing number of Gen Z and Millennial shoppers are abandoning both budget and luxury brand-name items and turning to mid-priced retail products across a wide range of industries, including clothing, jewelry and home goods. The items are never the most expensive option, but they cost enough to be considered a splurge for younger shoppers who are far enough along in their careers to have extra money to spend.

Mid-priced products appeal to millennial consumers who are not immune to rising costs of living. Compared to saving for years to spend on a single luxury item, treat yourself more often, she says Jennie LiuYale School of Management lecturer who researches branding. “Today’s consumer doesn’t want to wait, doesn’t want to save,” Liu says.

Almost a third of customers worldwide say they are willing to spend money on fashion McKinsey and Business of Fashion report It was published in January. But while a $5,000 pair of earrings from a luxury brand may be difficult to justify to a young shopper, a $150 earring still made of gold may be an easier sell; especially for a brand that promotes stylish millennial attributes like artisanal craftsmanship, environmentally friendly materials or humane factory conditions.

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Alternatively, the shopper might purchase a small item from a luxury brand to own something from a culturally significant retailer (for example, a $60 hat from outdoor clothing retailer Arc’teryx or a $160 lipstick from Louis Vuitton). Businesses can benefit from this: Luxury brands can continue to attract new customers with their cheapest products while increasing prices on the rest of their catalogs.

Mid-priced products, sometimes called “affordable luxury” or “sophisticated contemporary products,” don’t necessarily outshine the rest of the retail landscape, but their popularity has reflected consumers’ shopping priorities for hundreds of years, he says Marni ShapiroHe is the co-founder and managing partner of the research and consulting firm The Retail Tracker. The more popular these products become, the more pressure they put on the budget and luxury segments of their markets to shift toward a middle ground, Shapiro says.

Some fast fashion brands, such as H&M and Spain-based Bershka, have reduced the number of products in their lowest price segments in the UK, according to a McKinsey and Business of Fashion report. Their aim was likely to differentiate themselves from ultra-low-cost options like Shein and Temu and give the same “affordable aspiration” look that mid-priced brands offer “trend-focused shoppers”, the report revealed.

For this generation, “the meaning of luxury has changed a lot,” says Lei. “In the past it was: ‘I buy luxury because I want to be someone else, and this item gives me status.’ Now luxury is the luxury of choice. What I invest in is my pleasure, [an identity] I’m trying to adapt.”

Companies selling mid-priced products are not new, but the industry’s popularity has historically ebbed and flowed. For example, in fashion, 2000s brands such as Coach, Kate Spade and Michael Kors reached non-affluent customers in department stores. Says consumers turned to fast fashion after 2008 financial crisis Thomaï SerdariHe is an associate professor of marketing at New York University’s Stern School of Business, where he studies the luxury goods market.

For nearly a decade, the industry remained K-shaped: Luxury brands attracted wealthy consumers, Serdari says, and fast fashion provided a popular selling point for everyone. Shapiro says the post-recession economy has made it harder for would-be entrepreneurs to launch mid-priced competitors.

Today, you can buy a $970 stainless steel eight-piece cookware set from All-Clad, a similar-looking nine-piece version from Ikea for $100, or one of several mid-priced options—like the 10-piece titanium set from Our Place for $490 or the 12-piece HexClad set for $700. Variety of mid-priced options Shapiro says it would have been harder to find a decade ago.

Our Place, like many other modern mid-priced brands, gained popularity by advertising a single product (“Always Pan”) on social media after its launch in 2019. “Some of these brands [become popular] “By using a single product as a brand,” Liu says, “whether you know the name of the brand or not, the product becomes very visible on social media and acts as a brand of sorts.” [before the company] “It is gradually expanding its product range.”

Overall, he says social media is empowering this generation of mid-priced brands American CaneProfessor of marketing at the Wharton School of the University of Pennsylvania. “There are more channels to discover and spread who we are,” he says. In a sense, young shoppers use the brands they see on social media to enhance their sense of self and demonstrate this to others; Just like some people build their identities around volunteering at church or playing sports in a local sports league, he adds.

Social media shopping services like TikTok Shop have recalibrated consumer expectations the same way on-demand platforms like DoorDash, Uber, and Amazon Prime did a decade ago, Liu says: “You can go from awareness of a brand to purchase in a matter of minutes.” Consumer willingness to engage with brands on social media is allowing retailers to pull tactics from the “luxury playbook”; this includes “talking about how the products are made, produced in a small town, and processed slowly.”

Sedari says that a price tag, especially a mid-range one, doesn’t necessarily promise high quality. He says that recently, one of his MBA students was showing off his blazer, a trendy product from a mid-priced brand.

Sedari says, “I was very curious about the blazer and went to check it out online. It’s polyester.” “I’m not prepared to pay $400 for a polyester jacket.”

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