Upscale Jeans Focused on Market Share Gains
Upscale jeans brands are taking different approaches to try and gain market share now with an eye to the future when affluent consumers will feel better about spending $100, $200 and more on a pair of jeans.
For Seven For All Mankind (Seven), the plan is to open new stores. According to Shopping Centers Today (SCT), the pricey denim brand (jeans retail for $145 to $233) opened its third store in Malibu, Cal. in May and plans to open another nine locations by year’s end. Next year, Seven plans to be even more aggressive in opening 20 new outlets.
A survey by American Affluence Research Center (AARC) found that 80 percent of those in the top five percent of income plan to spend about the same over the next six months on designer fashions. Sixteen percent said they would cut back and only four percent planned to spend more.
“It may seem strange that brands with high price points like Seven For All Mankind and True Religion are opting to roll out stores right now, when things are going well for them where they are, but that might be key to their long-term survival,” Kelly Tackett, a senior consultant at TNS Retail Forward, told SCT. “The designer denim trend may have run out just a bit, so these brands are looking for other ways to expand their sales, like with footwear, accessories, T-shirts and handbags.”
Seven is among the upscale denim brands looking to diversify. The company plans to roll out footwear and outerwear lines next spring. “Denim will always be a huge wardrobe staple,” Ms. Tackett said. “But these brands are learning that they need to branch out and become more in the minds of consumers than just a pair of jeans.”
While some are opening stores to gain market share or expand their product offerings, others are looking to more moderately priced spinoffs to attract a new group of consumers along with brand loyalists.
Frankie B. jeans, which retail between $165 and $235, will debut the Frankie B. Originals line this fall. The new line will offer jeans priced between $115 and $160.
“The luxury consumer doesn’t mind shelling out for a pair of designer jeans, but with everyone and their brother coming out with expensive jeans, it’s becoming increasingly difficult to be the ‘it’ brand,” Ms. Tackett said. “Chip & Pepper going in to J.C. Penney, and Frankie B. coming out with a lower-priced diffusion line are just different ways these high-end brands are mitigating the risk in a tough market.”
Discussion Questions: What do you think are the soundest strategies to pursue for upscale denim designers looking to grab greater share of the affluent consumer’s purse? Is there a particular high-end denim brand that you think is in a good position to grab market share in the near term?
To continue selling the expensive jeans, the manufacturers are going to have to stay ahead of trends and have the cutting edge fashion. Investing in real estate right now is a good buy if the plans for expansion have called for that anyway. If investing in real estate is being done just because the prices are good but wasn’t necessarily part of the long term strategy that could be dangerous. If the designer jeans want to sell less expensive items at reasonable prices they need to use a different name or risk downgrading the image of the expensive jeans.
Probably the most successful ones in the fickle fashion business are the ones that are mored subtle–those that create the aura of mystique and exclusivity around their products. This doesn’t mean mass market advertising and network television buys. It’s about word-of-mouth, blogs and a desire on the part of buyers not to be conformists–just like everyone else.
At Christmas, I bought my son a pair of Diesel jeans. $200 but as the very cute and very hip sales associate said “they are so worth it!” Obviously, she knew they weren’t for me. But when she sold me on the jeans, she also tried to sell me a belt for $80 and a tee shirt for $50. I damn near bought them too.
However, you should take this all with a grain of salt since the best jeans I ever had were a $23 pair from Target.
The brands that become icons and last through thick and thin are the ones that hew true to their core USP (unique selling proposition–for those too young to have known Rosser Reeves personally :-)! Never let them see you sweat. Don’t let your makeup run and keep your dignity at all times. Do not run to lower price tiers or try to achieve ubiquitous distribution through Mobil stations and 7-Eleven. Do not try to add tie-dye and flip flops to your $200 jeans displays. If your brand deserves to survive, it will. Remember, what doesn’t kill you makes you stronger.
Market share on jeans are contingent on a few pivotal factors:
1. Brand Awareness & Distribution.
2. Fashion and Trends.
3. Price, even for high end.
4. Decision-making capability for targeted age group.
However, one major element that is often overlooked is size assortment. Designers and manufacturers need to come to grips with the reality that most consumers are overweight. It’s time they get smart about reaching out to the vast majority of real people.
What’s the real difference between a 50 dollar pair of jeans and a 250 dollar pair of jeans? Many would argue it’s just 200 dollars. With that, one would have to wonder if what makes Seven and similar brands so special is that “je-ne-sais-quoi.” A name that becomes a status symbol more so that the products themselves.
While those companies that can benefit from this type of market positioning could be considered lucky, they do become more susceptible to long term changes in consumer taste. This brings to mind past brands like Jordache, Bugle Boy and Lacoste (making a comeback after 20 years). Can they remain at the top of people’s wish lists through a recession? If so, more power to them.
Gotta run. Hang Ten sweats are on sale at my local Woolworth.
I don’t think there’s been much reliable market research done here, because it has always, always been my experience that the most cash-strapped 20-30 somethings happily spend way, way more on a pair of jeans that the most affluent 40-50 somethings. Some major assumptions are clouding this entire assessment. True, the brands come and go, but the overall concept is here to stay.
The fact is that the cheap Target or whatever jeans just don’t fit right. Period. Too loose or too tight in all the wrong places. Until the bargain clothes manufacturers get that figured out, they are missing out on a major opportunity to steal market share away from the 20-30 year olds who don’t want to look like a blind person designed their clothes, but also don’t have much expendable income to work with.
Upscale jeans will sell now, and even more so after the economic downturn. Upscale jeans will always sell. But there is no reason to expect that it will be the same brands of upscale jeans in two years, or four years as are hot now. Vogue, Elle, and other fashion magazines continually must find and rave about newer, hotter, brands to feed their market of fashionistas.
With the exception of about five long time designer labels which have stood the test of decades, most “upscale” labels are fairly short lived–especially so those specializing in denim. Maybe “Seven” jeans will surprise us with their creativity and staying power, but I am not holding my breath. Building standalone stores will be a recipe for disaster.
Best investment for high-end jeans brands: most effective publicity money can buy. Get celebrities photographed wearing your brand. Not regular advertising. Not store locations. The fashion jeans audience copies their idols. Great photos in Vogue and People are worth more than (retail) real estate. This is aspirational marketing. Placement in the right movies and TV shows works, too. Where would Aston Martin be without James Bond movies?
A retail category like upscale jeans is a pure lifestyle play. “Our jeans are THE jeans to wear. Wear our jeans and be part of US.” Very trendy, very forward, these retailers are looking for the tipping point where they truly do become THE must-have brand. To maintain the cache, the brand can never truly become mainstream or mass market, but once you reach that position, pricing is pretty much irrelevant.