Harley Davidson in a Skid
Reveries has some thoughts on the freefall that Harley Davidson currently finds itself in, battered by the recession
Harley’s slide certainly is tied to the recession, but there’s more to it than that. When times are bad, obviously it’s less likely that people will “shell out up to $20,000 or more for something that is basically a big toy.” It doesn’t help much that most of the Harley market consists of baby boomers who are watching their savings implode. But it also appears that Harley contributed to its own troubles in a chain reaction of mistakes.
Harley is like Starbucks in that it created a strong customer experience, a sense of belonging, and then expanded that massively to a more mainstream audience. In the process, both lost their way. Starbucks let its experience get diluted at the edges, which impacted its core business. And the idea that by offering small luxuries it is recession proof has been sorely tested lately.
Both companies were on the vanguard of the experience economy, as Pine and Gilmore termed it in their book of the same name. They wrote, “The company that is perhaps most successful in embedding its goods into a total experience is Harley-Davidson. How many other company logos do you find tattoed on users’ bodies?” (p18).
Harley Davidson likes to pretend that they are of the people, for the people, a FUBU for boomers. But in reality they are in the high-end luxury escapism business. And when the bubble bursts, that’s a bad place to be.