Imagine you are an executive heading up a designer and manufacturer of fashion sunglasses targeting a millennial audience. Your company’s sunglasses sell for $100 or less per pair, yet wealthy millennials are more than happy to spend hundreds of dollars more to get a pair of sunglasses that are no better in terms of their quality. What do you do?
The scenario described here is not fictional. This is exactly what Utah-based Olympic Eyewear is facing. They are not alone, either. There are a number of smaller designers that put out excellent brands more than capable of competing with Ray-Ban, Oakley, Gucci, et al. Their quality is just as high while their prices are substantially less.
Companies like Olympic find themselves competing for a target audience that is not afraid to spend a lot more for a high-end brand. They have their work cut out for them. If they want to grab a larger share of the market, they have to find a way to reach wealthy millennials with the message that it is okay to buy less expensive designer sunglasses not produced under the banner of a single company that dominates the market.
In order to understand what smaller designers are up against, it helps to know what wealthy millennials actually think about eyewear. We can turn to an MVI Research study to get a glimpse. According to their most recent data, the top brands of sunglasses among wealthy millennials are:
You may not know it, but Italy’s Luxottica owns three of the five brands listed above. If you look further at the top 10 brands, Luxottica owns half of them. Most people would not know this without doing their own research, just like they don’t understand how just a few conglomerates dominate most of the world’s retail.
All that aside, the MVI data reveals that wealthy millennials are more than happy to pay $500 or more for a pair of sunglasses from their favorite brand. Some 37% said they would pay $300 or more for branded prescription eyewear.
If wealthy millennials are willing to spend more than $500 on a pair of designer sunglasses, would they be willing to spend just $100 if they could be convinced of equal quality? That is the question smaller designers are trying to answer for themselves. If those millennials cannot be convinced, the smaller designers have to come up with a more attractive price point that could help draw some of their target audience away from Luxottica brands.
The attitudes of wealthy millennials has created a delicate balancing act for non-Luxottica brands of sunglasses and prescription eyewear. These brands want to be able to compete for customers who have reservations about spending so much money, yet they still want their share of the wealthy millennial pie. They have to find that nice middle ground. The problem is, that middle ground is more elusive than it would appear.
One possible solution that some designers are looking at is to create two ‘classes’ of products, if you will. The lower class of products would still maintain the same high level of quality and craftsmanship but at a lower price point. The higher class would consist of separate brands with higher prices.
If consumers aren’t unaware of Luxottica’s dominance in eyewear, they would likely remain just as unaware of a designer offering multiple classes of products. As long as that designer distributed its eyeware under separate brand names, they would probably do just fine.2018-03-19