Bonobos exec: Price comparison risks brand integrity
NEW YORK – A Bonobos executive at Aberdeen Group’s Retail and Consumer Markets Summit said that with consumers comparison shopping online, using only price as the determining factor behind companies such as Amazon can be a risky move for marketers.
Exes from Bonobos and Marc by Marc Jacobs discussed how the two companies are approaching merchandising for their companies during the “Roundtable: 2012 Merchandising Lifestyle Strategies: From Design-to-Consumer” session. The panel was moderated by Sahir Anand, vice president and group research director at Aberdeen Group, Boston.
“It becomes a dangerous game to only play on price because value should be something richer than just price,” said Richard Mumby, vice president of marketing at Bonobos, New York.
“There is also indication that an anti-Amazon wave might be coming,” he said.
“I don’t want to say that Amazon will disappear, I just think there will be a lot of interesting businesses that give an alternative to the marketplace.”
According to Mr. Mumby, there is a place in online comparison shopping for a company to combine merchandising, price and expertise for consumers. Instead of being focused on only price, the idea is to take all the heavy lifting and searching away from consumers for a shopping experience that focuses on relevancy.
For example, if a consumer is buying a pair of shoes online, they need to get a 360-degree understanding of the product and may be looking for additional features besides filtering price.
Additionally, personalization will play a role beyond simply recommended products. By using data, online shopping could be tweaked with features such as location and recent history.
When it comes to marketing and merchandising, one of the advantages of a small company such as Bonobos is how departments are forced to collaborate.
According to Mr. Mumby, a significant portion of first-spend consumers buy pants, which is what the online retailer is known for. The company always tries to sell at full price and does not plan for particular products to be marked down.
The company also sells footwear, tops, accessories and outerwear and has slimmed down the number of brands it offers.
Elle Thompson, vice president of product lifestyle management and special project operations at Marc by Marc Jacobs, New York, also spoke on the panel about the challenges that the brand has faced with product life cycle.
“We are a very creative organization, and to me half the success of a system is the process,” Ms. Thompson said.
“We have a 12 year-old business, and even for us to have two different divisions in one system is a challenge,” she said.
In particular, getting the right data entered correctly is a challenge for the company to make business as effective as possible.
Marc by Marc Jacobs sells its products through ecommerce, social media, wholesale and in retail stores.
Although the company does not develop a lot of product for retail only, Ms. Thompson said she could possibly see it changing once the brand has a presence in China.
Even though it is important to give consumers plenty of shopping options, it is equally as important to keep merchandise manageable. Too many options can be confusing to shoppers, per the exec.
Marc by Marc Jacobs has a broad SKU selection, but is looking to go deeper and narrower with its product.
The fashion brand’s business is split up equally in the United States, Asia and Europe markets.
Consumers are undoubtedly using digital platforms to comparison shop, however the exec said that price comparison does not necessarily fit in with the Marc by Marc Jacobs line.
“We build up a customer base along social media and the in-store experience,” Ms. Thompson said.
“There is a certain vibe that we want to keep alive and well, and price comparison may not suit us the best,” she said.
Lauren Johnson is editorial assistant on Mobile Commerce Daily, New York