Mini luxuries can mean big payoff
Luxury brands are finding it profitable to think small for products ranging from cigars to perfume bottles. Jennifer Collins reviews some of last year's successful launches and why they sold so well.
Nub cigars are more affordable than their larger contemporaries. (nubcigar.com)
More on Retail
TEXT OF STORY
Bill Radke: Zale's, the diamond retailer, reports quarterly earnings today. They're expected to be lackluster, what with customers cutting back on the luxuries. Some makers of luxuries are cutting back too -- quite literally, as Marketplace's Jennifer Collins reports.
Jennifer Collins: If you're looking for the latest in luxury, you could ask your butler. Or you could always turn on the Colbert Report:
Stephen Colbert: Times may be hard, but they've led to some exciting new products. Like the popular new smoke for the elite, Nubs. Which are shorter, cheaper versions of luxury cigars.
At four inches, Nubs are kind of like half cigars. And at $6.50 a piece, they cost about half as much as a typical cigar.
Sam Leccia created the small smokes. He says they've caught on:
Sam Leccia: I mean, it did close to $8 million in its first year. And those are really big numbers for a brand right out the gate.
Nubs are among several luxury products going small to make it big. The affluent aren't spending like they used to, so high-end restaurants are expanding their appetizer menus. Tony hotels are promoting shorter stays. Even perfume is going petite.
Harajuku ad: Welcome to the world of Harajuku Lovers Fragrance.
Pop star Gwen Stefani launched the Harajuku Lovers Fragrance line in the fall. The bottle designs are inspired by the Harajuku fashion district of Tokyo.
Karen Grant is a health and beauty care analyst with NPD Group:
Karen Grant: These were about a third of an ounce and extremely successful. It was one of the best-selling launches that we had for 2008.
So successful -- that a few companies -- including the one behind Stefani's line -- are planning to launch other small bottles next year.
Milton Pedraza is the CEO of the Luxury Institute:
Milton Pedraza: I think it's just adapting to what the consumer needs. It's still a premium product, it's still efficacious, it's still beloved. It is still a very high price, but it is more affordable on a by-the-slice basis.
Pedraza says luxury consumers are loyal to their brands. And if more companies took a cue from cigars and cologne, they, too, may find that less is more in a shrinking economy.
I'm Jennifer Collins for Marketplace.
Comments
Comment | Refresh
From Belton, MO, 05/27/2009
Way to miss the point of the Nub. First it's not half the price of longer sticks, second, it smokes in about the same time frame as more traditionally sized sticks (90 minutes). It's like you made everything up to support your story, kind of the opposite of journalism.
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.