It’s the economy, stupid

We’re in a negative spiral.

Low growth, inflationary pressure, and stagnating real wages. Demographic change, an increasing dependency ratio, and an expanding tax burden. A structural shift as the impact of AI is felt across value chains and white-collar roles become susceptible to automation.

A perfect storm is brewing – and it’s putting downward pressure on consumers' disposable incomes and their discretionary spend. In the US, the top 10% of earners now account for half of consumer spending, the highest share on record. Where America leads, others follow.

From selling more to charging more

Welcome to the “post-volume” era.

The rising tide of an expanding and affluent middle class that once lifted all corporate boats is ebbing. Retreating with it is marketing’s traditional growth strategy: expanding distribution and increasing penetration.

In this new world, growth must be price-led – brands will have to shift from selling more to charging more. So, what’s the new playbook? For many marketers, price-led growth has been conflated with “premiumisation” initiatives that focus on aesthetic execution rather than commercial strategy. This white paper is our attempt to redress that balance.

Increasing pricing power = reducing acceptable alternatives

Our thesis is simple but backed by data.

Price-led growth is driven by a brand's pricing power – and a brand’s pricing power is determined by its level of substitution risk.

The price ceiling of any brand is determined by the number of alternatives that are acceptable to the consumer. Brands with high substitution risk have many acceptable alternatives. Brands with low substitution risk have few.

If a consumer perceives that they could swap a brand for an alternative without any loss, then the brand's pricing power is effectively zero. Conversely, if a brand prevents consumers from considering alternatives, by making substitution costly, its pricing power is theoretically uncapped.

This dynamic plays out differently across categories – substitution risk in luxury operates differently than in FMCG or B2B – but the underlying principle holds. The framework is universal; the application is contextual.

Creating the price inelasticity to premiumise

This represents a significant shift in the marketer's mindset.

It changes the conversation from asking “How can we increase prices?” to “How can we decrease the acceptability of alternatives?”

When marketing successfully reduces substitution risk, it also reduces the price sensitivity that prevents premiumisation.

The three levers of strategic premiumisation

With this in mind, our price-led growth playbook identifies three levers to reduce substitution risk:

• Squeeze out alternatives: Preventing alternatives from coming to mind or coming into view by narrowing the consumer's consideration set – squeezing out competitors until your brand becomes the instinctive, and only, choice.
• Assert superiority: Identifying the dimensions of superiority, whether tangible or intangible, that your brand can leverage to reduce the number of acceptable alternatives.

• Inflict cost: Making alternatives less acceptable by making substitution psychologically costly – and being clear on exactly what consumers will lose if they switch.

  Along the way, we will consider how influencer-led “forensic consumerism” is eroding the power of perceived superiority – and how agentic AI will only solidify this trend. We will look at the impact of private label and “dupes” on substitution risk, how distinctive design offers an antidote to the “sea of sameness”, and explore the paradox of why friction, rather than ease, has become the ultimate status signal.

Shouldn’t I be getting this advice from a management consultancy, not a brand-design agency?

This is strategy work. While a consultancy can calculate your price elasticity, only design can create your pricing power.

Brand is the critical lever for managing substitution risk because its primary role is to systematically disqualify alternatives. Yet many businesses fall at the first hurdle.

Failing to look distinctive is a signal of low differentiation. To the consumer, visual uniformity communicates substitutability. If you look alike, you are alike – and one brand becomes an acceptable alternative to another.

By overlooking this, brands inadvertently increase their substitution risk and lower their own price ceiling. To justify a difference in price, a brand must first establish a difference in identity.

Through the lens of substitution risk, the old marketing debate between “being different” and “looking different” is moot. Looking different is how you signal that you are different.

This brings us back to the flaw of prioritising aesthetic execution over commercial strategy. This is why so many premiumisation initiatives fail: brands attempt to signal status by adopting generic “premium” codes – the same colour palettes, the same typefaces, the same aesthetic. But by blending in, they increase their substitution risk. They aren't building a moat – they're advertising their own substitutability.

Want to learn more?

We’re now offering personalised insight sessions to help you leverage the power of brand to manage substitution risk.

Register your interest here.

This article is the first of an ongoing insights series. So stay tuned.