Michaelís Consumer Column
The Prince and Princess Syndrome
Consumers willingly trade down on products and services in virtually every category of goods they buy, from coffee to cars. Most of the time, no matter what their income, consumers go for the highest-quality item at the lowest possible price. But there is one particular type of consumer for whom trading up is the only way to go—in one very important category. The consumers I'm talking about are the older parents of only children—a new generation of "princes" and "princesses." The category these parents refuse to scrimp on? Baby gear.
The most intense of these "traders-up" are typically two-income couples who delay having children until relatively late in life so that they can concentrate on building successful careers. When they finally do start their families—generally, when they are in their mid- to late-thirties—being parents is an all-consuming event. The child is, to them, not a little boy or girl. It is their prince or princess.
Unlike parents who, in earlier times, started their families when they were young and expected to have two, three, or four children, many of these older couples intend that their firstborn will be their only born. So they dote on the child, spending a disproportionate amount of their income (which can be substantial) on fleets of Bugaboo strollers, wardrobes designed by Ralph Lauren and Christian Dior, and marvelous educational toys. Why shouldn't junior have the best of everything, when Mom and Dad can afford it and can imagine no better way to spend their money?
Overall, consumer spending on all categories of upscale baby goods has reached about $45 billion a year in the United States and is likely to continue growing, with the largest amounts of money being spent by households whose income is in the top 10 percent. That is where the explosive growth will be seen.
Parents have always loved their children and wanted the best for them. But today's two-income, single-child couples are bestowing their love as if their progeny were royalty.