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Sunday, August 1, 2004

Deluxe stuff can be had at bargain price


Luxury goods targeted to mass market

By Jaimee Rose
Gannett News Service

People battle over discount Pottery Barn rugs on eBay. Women haunt the aisles of Target, trolling for deals on designer linen suits. And teens line up to score discounted 7 jeans at Nordstrom's Last Chance.

There are bargain leather sofas at Costco, Elizabeth Arden face creams at Wal-Mart, and even stylish home theater sound systems that you can buy along with your light bulbs at Home Depot.

In the past 30 years, the American middle class doubled its income and went to college, creating a group of consumers with hefty designer wallets, cultured tastes and the smarts to know this: Never pay full price for anything. They've created a lucrative new market - bargain luxury - that has retailers tripping over themselves to offer more for less.

Americans love the appearance of money, and now almost everyone can look as if he or she has it.

It's "a good life," says Michael Silverstein, co-author of Trading Up: The New American Luxury and senior vice president at the Boston Consulting Group in Chicago. The new American bargain luxury consumers, he says, are the 48 million households with incomes between $50,000 and $150,000 a year. Now, luxury items are being targeted to those budgets.

If a face-lift is a must-have but the average $6,000 price tag is too high, a quick fix is Botox, just $384 per treatment.

And, if you're Mesa, Ariz., mom Missy Glover, who drools over the $79 shadow boxes in Pottery Barn Kids, you know to keep looking.

"I get ideas from Pottery Barn Kids," says Glover, 25, "and then I go to Target," where a similar frame is $19.99.

This happy bargain hunting is one reason Oprah now does TV segments on discovering Costco. It's why half a million people read the magazine Budget Living, where the motto is "Spend Smart. Live Rich."

What happened, Silverstein says, is that in the past three decades, women went to work and doubled middle-class family incomes. About 70 percent of women with children under 6 are working today, he says.

At the same time, we've become more cultured.

"About 12 million Americans went to Europe last year," Silverstein says. "They come back having experienced balsamic vinegar, real mozzarella cheese and a croissant that melted in their mouths, and said, 'I want some of that back here.'"

Look at all the deals: The new bargain luxury movement means Julie Brubaker, a 39-year-old Peoria, Ariz., mom and educational consultant, can type "Pottery Barn" into the search engine of eBay and score an $80 tropical-print sheet set for $31.

And for Nicole Rose, 33, a Mesa, Ariz., branding consultant who scored a $2,100 hand-painted chest for $200 at Neiman Marcus Last Call, it means talking shop with her next-door neighbor, comparing recent bargain acquisitions.

In the new bargain luxury, sometimes the competition is not about how much you spent, but rather how much you didn't.

Of course, there's some psychobabble to all this bargain shopping, says Eugene Fram, professor of marketing at Rochester Institute of Technology in New York. Why do we spend Saturday mornings grocery hopping at Costco, Safeway and Trader Joe's, going the extra miles to get the best prices at each?

That one goes back to the caveman.

"It's the success of the hunt," Fram says, the thrill of the find, and it affects all Americans, in every class, the same. "Everybody loves a bargain."




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