Pricing Puzzle Persists
February 25, 2008,
I expected a lot more teeth-gnashing.
The strategy that seems to prevail this year involves taking a little market share here and there to come out with a flat year. In many places, that was considered a best-case scenario. But again, there wasn't a lot of wailing about it.
That stood in contrast to the attitude at market during the early 2000s recession, when anxiety was particularly acute even pre-9/11 and (understandably) stratospheric afterward.
I've got to hand it to suppliers; they came loaded for bear. Performance products abounded: fire-resistant, fade-resistant and wrinkle-resistant, anti-microbial, anti-allergen, heat-reducing, sleep-enhancing, scent-emitting and collagen-restoring. Those are just the ones I'm pulling off the top of my head.
It was also a big market for the big O — organics. Even Calvin Klein and Donna Karan Home brought out organic fashion offerings. Those were the first beds one encountered upon entering their showrooms — a significant statement.
And because pure-as-the-driven-snow organic textiles are way too expensive (and there's not enough organic cotton to fill the market with them anyway), suppliers demonstrated a variety of methods of creating goods that could claim the title of eco-friendly.
All that great and glitzy stuff aside, there was a lot of attention paid to price points and tiering. While a lot of folks did their best to put out some upper price point merchandise, few stinted on the good/better assortments.
That was probably wise. Talking to suppliers in the aftermath of the market, I heard repeatedly that retailers are preparing to be extremely sharp in their pricing heading into the fourth quarter. (Giftables and sets also cropped up in several spots and product categories.)
If there was a new mousetrap out there, I neither saw it nor heard about it. But all in all, I thought the market made a pretty concerted showing. There was, as noted above, a plethora of differentiated product on offer. The eco-buzz was heartily attended to. Price point sensitivities were widely addressed.
Less clear in the post-market assessments was when and to what extent retailers will take price increases. A few people felt that a final wave of smaller mills are poised to sweep in with take-it-at-any-price bids — and, in some cases, screw up — before this business gets resolved.
We shall see.