A Response To Our Pricing Manifesto
Luxury menswear brand Private White V.C. unveils a transparent pricing manifesto. Founder and CEO, James Eden, explains why
Article originally appeared on James’s LinkedIn feed
Last month we went live with our new Pricing Manifesto and so far the feedback has been overwhelmingly positive. The world of retailing has evolved almost beyond recognition in recent years and so we feel it is only too appropriate to combat such seismic changes with a more modern and more relevant approach to pricing. The customer these days is so savvy, so inquisitive and so informed that they expect (and many now demand) full traceability around the product and the supply chain. Why not offer a similar amount of disclosure and transparency relating to costs and the setting of retail prices?
Is 2x or 22x mark up from cost enough? Well that depends of course on what you are expecting the customers to pay for? Raw materials? Fabric? Labour? Administration? Pattern work & product development? International ad campaigns? The sponsoring of a Premier League football team? The traditional way has been for brands to inflate prices to such levels that it is still possible to profit when there is 70 or even 80 per cent off! Set the prices so high and you can (quite literally) set fire to $38 million of your old unwanted inventory and your PnL will still keep investors smiling!
Our new approach might seem revolutionary to many within the industry but it makes total sense to us, as a non-fashion, non-trend led Factory-brand that makes 100 per cent of its products in its own wholly owned factory in Manchester. We simply want our customers to pay a fair price that accurately reflects the quality and craftsmanship of everything we do. Ultimately of course the customer will decide what is fair.
We strongly feel this new approach is sustainable whereas the traditional and alternative model of inflated prices, excessive mark ups and an almost incessant merry-go-round of new releases, ad-hoc discounts and random flash sales is simply not viable in our eyes. Look around you today, it’s July and brands everywhere are spending huge sums in advertising their ‘Summer Sale’ to effectively educate the customer to never pay full price again for their products. It makes no sense. Why would anyone ever pay full price for something when everyone knows the price has clearly been set too high to begin with?!
Regarding wholesale, once again we want to be as clear as possible… it is still extremely important for us. The marketing benefits are obvious but the wholesale side of things is becoming increasingly difficult to manage and maintain. The costs and infrastructure needed to ‘wholesale properly’ are significant. Investing in numerous international trade-shows, multiple sets of sample collections, plane tickets, distributor’s commission etc etc… the list goes on. Can brands reasonably expect the customer to pick up the tab for these sorts of expenses? We don’t think they can in the modern era. We have removed virtually all the costs associated with the channel and crucially, have revised down our retail prices accordingly. As a result, we will continue to wholesale but we are unashamedly clear that its primary objective is to serve as a marketing tool, a way of getting our products into the stores, hearts and minds of new customers in new locations around the world.
Will other brands follow suit? We see that they already are. Price transparency is becoming more and more common across many industries whether that be in wine-making, cosmetics or of course fashion. In a world where the customer has endless options and alternatives open to them, the need to retain and build customer loyalty, trust and confidence has never been greater. We have nothing to hide which is why we choose to be transparent. If other brands opt to follow suit then fantastic, but if not that’s also cool. There is no panacea for success when it comes to retailing and brand building but the harsh reality for us as a Factory brand is that we would have gone out of business (quite quickly I suspect) if we didn’t change our business model and adapt with the times.
I am delighted to say that the the reaction to our new Pricing Manifesto has been really positive. Truth be told, we have been blown away by the support from customers old and new who can now buy with 100 per cent confidence and at a more accessible price point.
The journey has only just begun but so far we have seen a ‘game-changing’ uplift in demand that should allow us to manufacture more, employ more, grow our business and upgrade our Manchester factory. This can only be a great thing, right?
Enquiries: Private White V.C.