Determining a Price Point
I am now in the process of designing and costing my first collection. Originally, I had wanted to offer an upper moderate priced collection of women’s clothing using natural fabrics. Well, I have found the numbers just don’t make sense. I started to question my desire to use fine fabrics such as silk and linen and instead use polyester and other lower cost man made fabrics. However, after extensive reading and personal debate I’ve come across a number of points that favor a higher priced product.
First and foremost, female shoppers that normally buy at the designer price point from the likes of Donna Karen and Ralph Lauren are now trading down to smaller, newer labels that offer lower price points. To be exact 26% of shoppers are turning to retailers other than where they would normally shop according to consulting firm TNS Retail Forward. Note, they are tightening the belt but not closing the wallet as may be the case with purchasers of lower priced apparel. Also, women shopping at higher price points shop more often.
What kinds of retailers will carry moderate priced goods vs. contemporary/better priced goods? Well I’ve been hard pressed to find small stores or boutiques carrying moderate priced goods. I suppose one could sell private label to catalogue companies. However, there are many more boutiques and specialty retailers such as Barney’s New York or Henri Bendel that take a risk on new designers. Of course your product has to be of a certain caliber and price point to sell at those establishments.
Apple just recently released the latest financial numbers for the company and Steve Jobs who is somewhat of an industry guru thinks Apple will be fine. Many thought Apple would lower prices considerably or offer low price alternatives. However, the only concession to a downbeat economy was the lowering of the entry price on a Macbook by a $100. Of course, a startup entrepreneur is not exactly Apple, however if there is still a market for electronic accessories costing hundreds of dollars consumers are not that bad off.
Are you debating what price point you should enter the market at? I would love to hear your thought process…