Welcome to the Post-Prosperity era of American history!
The American consumer is hardly recognizable in its current form; thrift conscious, cash starved, coupon clipping, bargain hunting, and just plain doing without, a new animal has emerged. It’s not all bad news though, consumers, now more than ever, are willing to venture into retail territory that they would have considered demeaning a few years ago.
McDonalds “Premium Coffee” has shown there is an opportunity in offering items that deliver value and higher quality. Targets, limited run, designer collections enjoy a cult like status. We will not list them all here, but, there are many other examples that illustrate the growing opportunity in affordable, “premium”, offerings.
This is not only an opportunity to increase sales, it is also the perfect space for a brand to change consumer perception and expand their offerings.
Case in point…
An article titled, Denim sales still going strong in the LA Times, outlines how the popularity of premium denim is leading to sales growth, even in market that is just plain ______ (insert favorite four letter word here, extra points for adjectives)!
Everyone knows there is no substitute for a good fitting pair of jeans, and when you’re working on tight budget there is nothing more versatile or practical.
Jeff Labell, chief executive of L.A.-based True Religion Brand Jeans, tells the LA Times,
“(Jeans) are a value purchase in a tough economy. Jeans are not the kind of thing you wear once, like a formal dress. They just get better with time.”
But, it is not necessarily back to basics. The hot market is the premium jeans segment.
A pair of Premium jeans can easily run you $250, but, with sales of premium brand jeans growing 17% during 2008 and 2.3% from December to February 2009, discount retailers are more than willing to throw their hat in the ring. Target, always fashion forward, has several low priced options, as well as American Eagle, but Gap is the definitely the most notable entry.
Gap has struggled the last few years, forcing the brand to close a number of retail outlets and ask serious questions about its future and their place in today’s market.
Gap has thrown away their tired old designs and stepped up, full force, with an entirely new collection of premium denim, “1969 Premium Jeans” that looks to make them a contender for a share of the premium market and knock the dust off of their brand identity.
Gap’s venture into the premium segment is perfect illustration of how this strategy can be executed.
Pricing for the collection is $59.50 for women and $54.50 for men, making the designer look affordable for customers that want premium, but can’t justify $200 dollars for a pair from a higher end retailer. With 14 men’s and women’s styles to choose from, premium look and feel, and a price that’s affordable, ” 1969 premium Jeans”, is the right move at the right time for a retailer who has been trying to find itself.
Will premium denim alone, restore the Gap brand?
No, but, it is certainly a move in the right direction, and that can be enough to get customers give you second chance or reconsider their preconceived notions.
