BLUEBELL, the 60 year old distributor of brands such as Moschino, Jimmy Choo and Davidoff, amongst others, was one of the first investors in the eCommerce apparel retailer GRANA. GRANA has been in the headlines recently because of the $10million funding that eCommerce behemoth Alibaba pumped into it. Its value proposition is two-fold: Premium quality, at affordable prices. They’re also completely transparent with their pricing, telling consumers exactly what mark-up they’re earning on each item.
We spoke to Benoit Lavaud, BLUEBELL’s Group Digital Director, about the potential difficulties mainstream apparel retailers would face if they adopted a similarly transparent approach to their pricing.
(Lavaud will be speaking at the Seamless 2017 conference, happening 19 – 20 April in Singapore. For more information, click here.)
GRANA makes a virtue of their price transparency. Do you think this can be replicated in the other brands you distribute?
In the case of GRANA, this has been part of their DNA since day one. This honest approach to pricing, the quality of materials, the efficiency of their supply chain to optimize costs etc. – all of this has a logic in their approach. I am not sure that this is something other brands can “replicate”. This approach is genuinely consistent with their vision of what apparel businesses should be. In the case of GRANA, because it is consistent, they have had huge success. If another brand replicates this approach, it might not look genuine and will fail to seduce consumer.
At what point do you think it will become counterproductive for a brand like Grana to be transparent in its pricing?
I don’t think that transparency could be counterproductive at any stage for them. I wouldn’t put a limit to that.
How difficult is it for a brand that makes pricing transparent to go on sale?
GRANA actually has a very easy way to go on sale: They just call it “no markup day”. They explain very clearly on their website that they have produced too much of some items and need to make some room for the new collection. So they sell at price with no markup. It’s not difficult. The results might be the same as claiming 50% off, but the way to explain this price reduction is so consistent with their concept that it makes everything clear and easy to understand. Consistency is, again, key to their marketing.
To what extent do you think customers are willing to pay the mark-up that is necessary for a retail business to function?
I think this depends on the product and category you are targeting. Are people willing to pay 10,000 euros for a leather bag? It seems so. Are people willing to pay for a leather bag at 80 euros? It seems so as well. I am not sure people consider so much the mark-up level, but more the price for the ‘value they are willing to afford’. This is why companies try to build stories around emotions, because emotions force us to lose the rational, and we might be tempted to buy more from an emotional trigger than from a rational trigger.
Benoit is set to join more than 200 other e-commerce, retail and payments professionals speaking at Seamless Asia. For more information, download our brochure here, or go right ahead and register here. Our early-bird pricing, giving you 50% off, applies till the 23rd of December.