"Our key clients don't queue for the sales"

[FidelCashflow]

Originally Posted by Dewey

True. But down the road, maybe he is. If your product is quality and a good value for the higher price tag, some of the bargain shoppers will come back and pay full retail.
I doubt that's the case for most people here. SF'ers tend to be more aggressive bargain hunters than pretty much anyone else out there. How many threads have you read where someone asks for advice on what suit to buy only to hear "Buy brand X, but get it from (insert outlet store here.)" Even when I think I got a bargain getting something for 40 or 50% off, I'll post it and almost invariably here something to the effect of "you should have waited awhile more, and it could have been 80% off."

The Versace guy's comments are snobby, but could be true. I can only think of a handful of SF'ers who (AFAIK) regularly make big purchases like Kiton shoes at full-price. It seems most of them are lurking for sales. From what I've heard, some people in high-end retail affectionately refer to the customers who only buy during clearance sales as "bottom feeders." In the hierarchy of things, the customers that pay full retail are the most important ones to the business because that's where they make all their profits. Clearance sales are more for cutting losses and liquidating old inventory. I do find it a bit ironic that SF'ers constantly bemoan the endless amounts of crap in the average men's clothing store like Hugo Boss, Armani, Prada, etc. and think that these stores should cater to them by carrying more exclusive brands like Cucinelli, Isaia, etc.... that they will only be interested in buying once it goes on final clearance and sells for below cost.

I know I'm a bargain hunter and not some huge VIP client, and I'm OK with it.

 

[Cary Grant]

Originally Posted by DocHolliday

I'd think it's true. Ralph's not getting rich off SFers buying EGs at $500.

Agreed.

I was speaking with my tailor about just this yesterday. They never do sales and have never had to. Their business has only grown in the last two years (they were very busy yesterday for example).

They have a strong customre base and they are generally not the bargain-hunting type.

 

[3stylelife]

Originally Posted by FidelCashflow

The Versace guy's comments are snobby, but could be true.

Agreed, while that may be the truth of the business, it's snobby, and bad marketing to state this. It's akin to Taco Bell publicly stating that they use poor quality meat; we know it, but that doesn't mean you should broadcast it.

 

[Mathew J]

Originally Posted by FidelCashflow

From what I've heard, some people in high-end retail affectionately refer to the customers who only buy during clearance sales as "bottom feeders." In the hierarchy of things, the customers that pay full retail are the most important ones to the business because that's where they make all their profits. Clearance sales are more for cutting losses and liquidating old inventory.

If I had heard such a comment I would be sure to not frequent those establishments..."bottom feeders" serve a purpose just as those who pay full retail, they should be happy anyone is buying their wears.

 

[SoCal2NYC]

Most retail companies use the model that 80% of their sales come from 20% of their customers.

 

[unagiluva]

Originally Posted by 3stylelife

Agreed, while that may be the truth of the business, it's snobby, and bad marketing to state this. It's akin to Taco Bell publicly stating that they use poor quality meat; we know it, but that doesn't mean you should broadcast it.

I would think that snobbish comments helps to reinforce the eliteness of the brand that Versace is going for.

 

[Doc4]

Originally Posted by FidelCashflow

I know I'm a bargain hunter and not some huge VIP client, and I'm OK with it.

Me too

Originally Posted by unagiluva

I would think that snobbish comments helps to reinforce the eliteness of the brand that Versace is going for.

That's what I'm thinking. How do the Nouveau Riche show off that their NR-ness hasn't taken a nose-dive in the current economy? Buy and conspicuously wear the stuff that hasn't been deep-discounted.

 

[Douglas]

Yeah, this is well-calculated marketing - this guy isn't just spouting off at the mouth in a moment of unguarded snobbishness. People buy these brands because of the pretentious associations, not in spite of them.

 

[TRINI]

If I had the cash, I wouldn't queue for sales either.

 

[towen]

It's a good marketing strategy. I haven't the slightest idea what Versace's customer base is anymore, but I doubt they are making most of there money on the guys willing to drop 20k at once.

 

[rsgould]

Originally Posted by Douglas

Yeah, this is well-calculated marketing - this guy isn't just spouting off at the mouth in a moment of unguarded snobbishness. People buy these brands because of the pretentious associations, not in spite of them.

Guy's still an asshole.

I don't even know what Versace stuff looks like these days....

 

[LA Guy]

The guy is just doing PR, and it is obviously not aimed at the sales shopper, but to reassure Donatella's dream customer that she is not considered part of the unwashed masses.

As for the content of statements, he is simultaneous right and wrong. He is right when he implies that the majority of sales in collection are made to a very small minority of their customers. However, while the margins in fashion are not as razor-wire tight as, say, in the restaurant business, they are not actually very wide, and a small profit can turn into a loss very easily. That last 20% of sales really matters. Moreover, the "core customer" who buys designer collections and the core customer who is really pay the way for luxury companies aren't really the same. Luxury companies don't turn a big profit, if any, on a designers collection. Instead, the money is made on the diffusion lines (often licensed), fragrances, and accessories. So, that lady who buy the Prada keychain? That is a pretty valuable customer, as is the guy who is wearing Acqua de Gio.

All that aside, he still sounds like an ass, and I'd welcome the chance to cock punch him.

 

[Keon]

People DO buy at retail. And the people that do buy at retail would only chuckle at that comment and continue paying retail.

 

[dfagdfsh]

ralph lauren probably makes its money off kids paying $75 for polo shirts, not purple label suits

 

[robin]

I buy most of my things at full retail.