$300 socks. No way. But I wonder how many people would have shaken their heads 30 years ago at the prospect of $300 jeans. I still shake my head. But they're around and people pay for them. Sure--they offer much better quality material and craftsmanship--but there's an intangible value, created out of thin air, that for some people is real. The value? Identity? A meaningful experience?
This last issue of Fast Company magazine has served up an interesting article on this, proposing that $300 socks may indeed be inevitable. Dan and Chip Heath, authors of Made to Stick, have a routine column going in the magazine, and their last article regarding "The Inevitability of $300 Socks", caught my attention. They're not the first to observe and comment on a growing trend of niche markets, connoisseurship, and customization. Seth Godin has been heralding the idea for some time that "Small is the New Big". The number of microbreweries of beer and coffee have risen sharply in the last decade (some of the products that I've been personally paying attention to). In addition, as the Heaths point out, jeans, to the chagrin of many a teenage parent, have gone from a $30 run-of-the-mill product to $300 a pair.
Their claim? The concept of luxury is evolving from being less focused on status and more centered around personal pleasure and self-expression. The article quotes Zain Raj, executive director of the ad agency Euro RSCG, Chicago, who looks back at the 1980's and points out that "You wore $200 pants with an $80 shirt and a $65 tie. There was a relative order to the world in terms of value. Today, it's all personal". Today, the Heath's point out that it's not uncommon to see people wear $300 jeans with $8 T-shirts or people who have a hard time affording their rent, pay for $15 a pound for premium coffee.
Their point? "Luxury goods are no longer a sign of status; they're the mark of connoisseurship". The difference between a product being run-of-the-mill with little profit margin, to a product that can command a premium from a group of connoisseurs, is the ideas behind them.
This idea goes beyond just the concept of a product for a niche market. It's more about an idea that lends itself to a consumer's identity and experience. Think Iphone. There are the people who paid $500 for an Iphone because they felt the functionality would improve their lives. There are those that believed that something about holding and using an Iphone in public conveyed specific messages of status to others. But I think the people I saw camped outside in front of the Apple store the night before the release--found more value packed into the $500 Iphone than either of these two groups. They got an interactive experience with other people camped on the sidewalk who felt the same way.
It's similar to when one guy with a Red Sox hat sees another guy across the bar with a Red Sox jersey--and gives the "yeah, man" nod of approval. Interacting with others who feel the same way is affirming, offering a sense of belonging and identity. An Iphone sidewalk camper can look at the guy or girl shivering on the pavement next to them and say "Your're a tech geek. I'm a tech geek. Let's revel together in our tech geekness". I'm not knocking it, because I do the same thing in other ways. I bought the $30 concert t-shirt at a Page & Plant (Jimmy Page and Robert Plant of Led Zeppelin) reunion concert. I show this to other Led Zeppelin fans and I am instantly elevated to "cool" status. I connect with a fellow fan. All the while, I am reminded of how great the concert was. And the experience of the t-shirt keeps on giving and that's why I paid $30 for it. If I never went to the concert and saw it on a rack in a store--no way.
So is it that crazy to think that $300 socks might someday do this for a group of sock connoisseurs?
One of the great things about this phenomenon, is that it opens the door for so many small businesses and entrepreneurs, who want or are willing to cater to a specific market. Distribution may be more manageable and building a brand and grabbing mindshare of the customers may be just as easy or easier for an unknown company as it is for an established company. In fact, it may be much easier for a small company or start-up to do this because they can often achieve a closeness with their customer and maintain an air of authenticity more easily than a larger, more unwieldy company. Someone did it with pants--watches, chocolate, beer, coffee, t-shirts, bags, and the list goes on. Socks? With the right message, communication, and a receptive audience, the possibilities are endless.