Higher Price Points Live On
March 8, 2009,
As we move into the opening day of this market week, there are folks who hold to the theory that all home textiles retailing is pointed down, down, down — in terms of sales, of course, but also price points.
During a recent visit with a very senior general retail executive, we were discussing how this exec's company was focusing advertising on seemingly lower and lower price points across home.
The response was more than interesting — it was stunningly revealing. Because so many consumers today are multi-channel shopping, when they actually get to make the buy, it increasingly is to the higher price point, better grade product.
To try to test this executive's comments, I checked out our very own, "hands and feet-on" survey of 10 of the powerhouse retailers of home textiles ("Market Basket Reveals Tactics," page 1, HTT, March 2). Here's what I found, examining seven of the 10 chains.
Yes, the pit is almost bottomless as far as price points are concerned. Think Target at $19.99, Macy's at $50, Kohl's at $44.99, Big Lots at $17, JCPenney at $50, Kmart at $25.99 and Family Dollar at $20 — all for queen sheet sets.
But now let's look at each of these companies' top price points for their queen sheet sets. For Target, it's $64.99, Macy's is $260, Kohl's is $199.99, Big Lots is $30, JCPenney is $180, Kmart at $99.99, and Family Dollar at the same $20 as the only offer in this category for this retailer.
A similar pricing range was evident in the bath area. Again, a sampling of bath towel price ranges (from low to high): Target: $1.79 and $9.99; Macy's: $14 and $43.75; Kohl's: $7.99 and $24.99; Big Lots: $3 and $6; JCPenney: $7.99 and $25; Kmart: $2.99 and $14.99 and Family Dollar: $4 for its single towel.
There's a wealth of free market research in the rest of the survey — this is not a mini commercial — a lot of good stuff that can help guide beleaguered suppliers through these troubled waters.
Hopefully some companies will use the info to stem the "pit is bottomless" mentality that seems to be pervasive in this market.
Look forward to hearing how you all made out in your efforts to move back up a notch or two.