To understand what the term “trading up” means, let’s start with a scenario.

You wake up early and jog to the Starbucks on the corner of your street. There, you wait in line to order a pumpkin-spiced latte, as you skim emails on your iPhone.

Afterwards, you return home, put on your new Lululemon workout apparel, and hop on your Peloton for an at-home workout.

In this scenario, you’ve “traded up” in a variety of consumer categories: including coffee, technology, clothing, and even workout gear.

Why, for instance, did you feel the need to head to Starbucks and pay $6 for a drink, as opposed to making a quick pot of coffee in your Keurig? Alternatively, why not purchase workout apparel from Marshalls or Target?

(No judgment on any of these decisions: I’ve made them, too.)

Ultimately, trading up refers to a consumer’s tendency to pay more for a higher-quality, more expensive product or service from a brand to which they’ve formed an emotional attachment, and feel a sense of loyalty.

But trading up doesn’t just refer to a consumer’s behavior in the marketplace at-large: it also refers to a consumer’s decision to upgrade their product for a newer model with additional features.

As a marketer, it’s critical you understand the concept “trading up” to discern how you might evoke brand loyalty in a crowded marketplace — or, how you might market a new version of your product to existing consumers.

Here, let’s explore what trading up means, as well as what it means specifically for marketers.


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