Tough Times and a Lesson in Innovation

kevin | Decision Making | Tuesday, May 13th, 2008

Many of our clients are interested in talking about increasing innovation. But it won’t happen unless you change what you measure, what you value. A recent AP piece illustrates this point in a fun way . . . how “tough times” cause many people to redefine luxury.

At The Wine Rack, where sales from the $10-and-under shelves are booming, Jocelyn Vorbach says aloud what most of her customers won’t: Friendships now have price tags, and dinner guests are gauged.

“There are friends who get the $300 Caymus and there are friends who get the $10 bottle,” Vorbach says. “They’re saying, ‘I like them, but I don’t like them that much.’ “

Even wealthier customers are stocking up on bargain bottles, though they tend to purchase by the case.

“Before, they wouldn’t be caught dead with a $9.99 bottle in their presence,” she says. “But now they will. As long as I tell them it’s a good one.”

It’s a matter of redefining luxury — and redefining nonessential — in an economy whose most consistent product may seem to be dismal daily headlines.

Ultimately, though, “essential” and “luxury” are personal definitions, choices driven not only by how much money remains when the bills are paid but also by our position on the social ladder, our sense of how to stay there and the feelings we get from the things we buy.

This last bit is actually inaccurate. “Essential” and “Luxury” are values, the choices are what we chose to buy with our time and money.

So the point here is that the choices were always there. The $10 find was always an option. It just never entered into the consideration set under the “old” definition of luxury. And some day in the future, it won’t again.

Similarly, you and your colleagues will struggle to consider interesting, innovative alternatives if you continue to define what’s important in the same old way.