"Oh, it seems I am in love!"—I ran my hand over the black strong silhouette belted cotton jumpsuit. Saint Laurent (Kering) made it a statement this season, and I finally had my hands on it.
The love somewhat faded when I checked the price tag. 3665 pounds. That extra 5 pounds put a smile on my face until I realized—I can't.
I can't justify this price. Trying to avoid discussions on pricing—too speculative—this is my second publication here on pricing. I know well the components of the price in luxury fashion. And I am the type who can always add an extra percentage just because "it is so beautiful."
But as a consultant, I strongly disagree with the "The bigger, the better" approach to prices, which has been actively discussed in luxury fashion lately.
Such approach can be effective to a certain extent, particularly for brands that rely on exclusivity and prestige as part of their brand identity. It can:
create a perception of luxury, exclusivity, and quality;
attract affluent consumers who value status and are willing to pay a premium for luxury goods.
However, it's all about balance. While high prices can contribute to the perceived value of the item, excessively high prices may alienate some potential customers and could lead to a backlash if consumers feel that they are being taken advantage of or if they perceive the prices as unjustified.
Additionally, "The bigger, the better" approach should also consider factors such as product quality, craftsmanship, brand heritage, and customer experience. Luxury consumers often expect exceptional quality and attention to detail, so brands must ensure that their products and services justify the premium prices they charge (CHANEL lately is a great example).
Ultimately, a strategic pricing approach that aligns with the brand's positioning, target market, and value proposition is crucial for long-term success in the luxury fashion industry.
If we go back to Saint Laurent jumpsuit I've been unlucky to fall in love with, let's consider it as a case study in pricing policy.
PRICING POLICY Case study
What: Saint Laurent Jumpsuit
Price: £ 3,665 GBP
Overview
1. The material used, cotton, is not typically considered expensive compared to other fabrics
2. When compared to other items from the brand, such as the pants-only option priced at £2,115 GBP (which still feels overpriced) the £3,665 price tag for the jumpsuit seems disproportionately high
3. Let’s think a belt included adds extra £350 GBP
4. Ready-to-wear is not a core revenue category for Saint Laurent, accounting for only 12% of revenue in 2023 according to the Kering annual report
Given these factors and considering the material and relative pricing within the brand's offerings, a more reasonable price for the jumpsuit would likely fall closer to £3,000 GBP.
Adjusting the price of the jumpsuit to around £3,000 GBP could benefit the brand in several ways:
Increased Sales Volume: A more reasonable price could lead to higher sales volumes by making luxury fashion more accessible within this category.
Broader Market Segment: By offering more competitively priced items, the brand can attract a wider customer base while still maintaining its exclusive image.
Boost in Ready-to-Wear Revenue: Increased sales in the ready-to-wear category could enhance overall revenue, compensating for lower profit margins per unit.
Customer Engagement: Attracting more customers to the ready-to-wear line could encourage them to explore other higher-priced items within the brand's range.
Long-Term Success: Adjusting the price strategically positions the brand for both short-term revenue growth and long-term customer loyalty and engagement.
Win-Win x
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I offer consultancy in luxury fahion on e-Commerce; Communication and Marketing; Client Experiences & VIC Loyalty. To learn more click here.