SHOULD RETAILERS DROP LOW-PERFORMING PREMIUM BRANDS?
Q: While my luxury business is doing fine, I’m seeing a drop off in sales of my premium brands (similar to Michael Kors and Hugo Boss). That customer seems to be shopping for cheaper product lines elsewhere. What can I do to make up for this lost business? Should I double down on my luxury customers?
Steve Pruitt: This is a good question; I’ve heard other retailers asking the same. The good news is that your luxury business is holding up. It’s harder to market in the middle. Also, it is much harder for lower-priced lines to knock off true luxury brands, compared with premium brands. The premium brands are also more widely distributed in the mass market, whether it’s the same merchandise you carry or similar products offered through a licensing deal.
My recommendation is to spend more time in the markets. This would include both trade shows and retail stores. To make it in this environment, you need to find new brands.
Another option is to find private label opportunities that give you unique offerings and deliver more margin. Also, don’t be afraid to push back on your vendors if you discover that their products are being over-promoted in your market.
We are actually seeing brands pull back from the mass market to focus more on specialty stores. Vince has taken this direction and so far, it has been successful. So, I recommend that you dig deeper into the market to find unique merchandise that excites your customers. The product exists.
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BRAVO STEVE GREAT ADVICE THIS IS WHAT WE ARE TRYING TO DO
great information….retailers need to find good lines that are not in mass stores and on the internet selling direct. it’s hard enough to do business with other retailers nearby but to compete with vendors selling direct is a problem for many retailers.
good write up…
Steve, you are always on target….moving always.
Shop the showrooms…there are great assortments.
Steve has kept me in business for over 40 years with one variation or another of his comments today. Examples include to be on the alert for over distribution of product lines and always have eyes on replacement vendors.