Customers love a good deal, so for juniors’ brands, the $100-and-less price point remains an important sweet spot, despite some new challenges.
Rising costs are now associated with manufacturing in China and have forced most brands to raise their prices, even if just by a hair. But according to sources, affordability is the most important factor for the teenage consumer — and for brands looking to target that customer.
“All of our product is under $100, and our sweet spot hasn’t changed much [over the years],” said Blowfish Malibu President Don Weiss, who co-founded his California-based line in 2006. “We feel it is our strength and it’s what our buyers and retailers want.”
Zigi NY President Andy Petersen echoed that sentiment, noting that for his juniors’ brands — Zigi Soho and Rock & Candy — affordability has always been a must.
“When you look at retail today versus 10 years ago, the majority of family-channel and big-box stores want the same [price points as ever],” he said. “It’s an important piece to them, and you might have a difficult time if you are focusing on more than $100.”
For California-based brand Yellow Box, 95 percent of the collection sells for less than $100, and a large majority is much lower, coming in at less than $59. SVP of sales and marketing Jack Oerth said that is a reflection of what consumers are willing to pay.
“The [customer] today is an interesting combination of value and impulse shopper. When she wants something, she looks at it critically enough that the details better be right and she has to clearly understand why the cost is what it is,” Oerth said. “At the same time, if she sees a product she has to have and relates to it at an emotional level, she buys it. If the price is less than $100, she feels even more comfortable with her purchase.”
Social media also influences the consumer’s shopping habits. Trends change more quickly than ever before, and as a result, juniors’ customers constantly are updating their wardrobes. Therefore, a “good deal” becomes key, added Petersen.
“If gladiators are the trend, it definitely seems to come and go quicker because of social media and the influences of bloggers,” he said. “Girls used to focus on one thing for the full season, but now [everything is] a disposable trend.”
Fast fashion also rules at Circus by Sam Edelman.
“Our customer possesses a ‘buy now, wear now’ mentality. She wants immediate fashion and isn’t investing in pieces for the future,” said national sales manager Jesse Edelman, who added that for spring, a $90 sandal sold just as well as a $45 item.
For many brands, achieving a low price range is the result of careful strategizing.
While Blowfish continues to produce in China, the brand is investigating additional locations to reduce costs. “We’re testing the waters in India and we’re on the cusp of making shoes there,” said Weiss. “We are constantly searching for new factories and cities.”
At California-based Naughty Monkey, the brand has limited its number of manufacturing partners to keep expenses down. “We are able to have a more meaningful presence with these China partners, and this has allowed us to control costs to some extent,” said brand director Jay Randhawa, who also oversees sister line Not Rated.
Another solution is ordering higher volumes of inventory. But the move can be risky, said Restricted GM James Matush.
“We buy large volumes on one product and get a better rate on that volume,” he said. “We are willing to take the chance of getting stuck with inventory.”
While executives agree on the importance of low prices to lure customers, many brands still cross the $100 line for such items as fall boots.
“We are seeing that customers are willing to pay [a little more] in this economy as long as they are perceiving an appropriate level of value for their dollars spent,” said Randhawa. “Just because consumers have cut back on their spending, it doesn’t mean our pricing strategy is all about how low can we go, but rather ensuring that we are always meeting our customers’ perception of our brands with the quality, look and value.”
At Zigi NY, where the core namesake line is aimed at a slightly older shopper and carries a higher price point, Petersen said the company’s philosophy all comes down to understanding each brand’s unique customer.
“We have fashion over $100 — and even over $200 — that still [performs well],” he said. “When you look at department stores like Nordstrom, its Brass Plum [juniors’] section can still sell sneakers over $100.”
As these brands look to the future, where the costs of manufacturing in China will likely continue to rise, some predict that prices for juniors’ footwear could fall even further as a result of intense competition.
Blowfish’s Weiss said his brand’s price points could drop below its average of $39 to $49.
“Our retailers are trying to get us to make $29 shoes,” he said. “If you look at the economy and unemployment rate, that’s not changing for the better, so [prices] will always be under $100 for us.”