OT. Call me crazy but I think J Crew is finally trying a new tactic of offering smaller numbers of inventory at retail plus an across the board discount of 25% off and it is working! So many things are sold out or close to it. I've never seen anything like it before. If this is truly their plan (meaning, things aren't going to come back fully restocked in a couple weeks) we just might not see the major sale sections and might have to change the "I'll just wait for sale or percent off sale" mentality that so many have grown accustomed to (often through pure frustration that paying full price is never worth it.) Interesting.This is an insightful take on J.Crew's current customer strategy when it comes to pricing. I also believe Bug Pin theory is exactly what J.Crew is trying to do!
How many of us (myself included), find we will wait for an item to go on sale because we know it will *always* go on sale? How many of us (again, myself included), find we will wait for an item to go on sale with an additional percent off because we know there is an additional percent off just around the corner?
J.Crew must have figured it out themselves, (that customers don't mind waiting for a lower price,) as they looked at the Sale Section. Day after day, there are over 1,000 items available for sale in the Women's section alone. (A few years ago, we would rarely see 1,000+ sale items. 800+ would seem like a lot.) With each new roll out now, it means more past-season items to go on sale.
However, as Bug Pin pointed out, J.Crew has started to offer the 25%-off-regular-and-sale-priced-items-too promo more frequently with new roll outs. Coupled with items "selling out" or on "backorder", it creates a feeling in J.Crew customers that they should "buy now".
And let's talk about whether an item is really "selling out". I am surprised to see so many items that are new (as in the first day they "go live"), with the "backordered / ship date" message. Are these items really selling out or did J.Crew just offer a super-limited number to begin with to create some buzz? Because I see most of those same items are sitting on shelves at my local store... (Granted there are those items that really do sell out quickly like Factory's Herringbone Excursion Vest, but I am not so sure about all of them. I remember a certain sweater selling out online and no one was buying it at my local store.)
What are your thoughts on J.Crew's pricing strategy for customers? Do you think J.Crew is trying to re-train its base of fans?
I don't know but I want that coat on sale and in stock now!!!!
ReplyDeletewell, the promo worked on me for the merino zip sweater-jacket and some "staple" cords. You have to use your gut to figure out whether others will go for your item, and in what sizes!
ReplyDeleteI'm a very small petite person, so waiting for a sale never works for me anyway. Others in my shoes know what I mean. Also, I seem to have one of the most popular shoe sizes...
ReplyDeleteTheir strategy must be working because both of the new release items I got recently sold out in my size during the 25% off discount. Another item that I wanted also sold out before I had a chance to buy it. I can't recall that happening with so many new items in previous years.
ReplyDeleteEven then, they go and offer 25% off select sweaters until the 6th.
ReplyDeleteI think it's having the opposite effect on me. I've bought way way less lately. Part of it could be that my life is just so casual and there's no need for me to dress up at all to go to the gym or a PTA meeting, but part of it is that I'm not seeing anything that I've found so amazing, I just have to have it now. I think it's a combo of the 2 issues for me. If I were working a real job, I'd probably be buying more from JC than I have been. But I am also admittedly a big bargain hunter, so I do try to catch the best deal I can. I don't think 25 off FP is much to write home about, and I will NOT do FS, so there hasn't been much calling my name from JC these days.
ReplyDeleteI think I'm like you. I have bought less recently. I would wager a guess that I would spend more if the sale was really good, so I'm not sure that JCrew is really getting more or even the same amount of my money.
DeleteI agree with you both. I've actually spent MUCH less recently with these new strategies. They "refresh" their sale section twice a day, and it's really frustrating that I see something sold out one day & then 2 weeks later, it's back in stock all of a sudden. (probably a return)
DeleteOne issue I have is that, at least online, prices never truly get marked down like they would in the real world. I have been watching something for 4 months in the sale section now. If they would only reduce it again (and then let me add the 30% off of it!) I would nab it. I never understand why they want the same stock languishing for so long?
ReplyDeleteI don't understand why they want it hanging around for so long either. I do understand why they mark things lower in stores sometimes, because they don't have the physical space to keep it languishing there. But why keep it languishing anywhere? They mark things down but then they often stick at a high markdown point and stay there for well over a year. Some of these things are not exactly classics that will always be in style. I almost understand it in something like the Emmaleigh dress, but a lot of it is very trendy.
DeleteI can't fathom why they don't do more markdowns more quickly online. Don't they just want to get rid of the stuff? Those things don't look better as time goes on - they look worse.
DeleteI was wondering about this too and was questioning if it wouldn't have been better and more profitable for J.Crew to produce more in said high-demand styles, seeing how quickly some of them have sold out. It's certainly frustrating for me as a customer to have something I'm eyeing sell out in less than a week (but then again, maybe it's my fault -- as J.Crew is retraining us to believe -- that I didn't snap it up quickly enough), but I wonder if it's also less-than-optimal for J.Crew to be producing small enough quantities that they don't even last for a week. Surely demand, even at full price, would extend for a longer time period than that? Wouldn't they have made more money if they still had Merino Scarf Sweaters to sell right now at full price [albeit perhaps with a 25% off]?
ReplyDeleteBut otherwise, I have to say the strategy has worked on me. I snapped up a few items I was planning to wait until a markdown for. Unfortunately, their limited inventory also means several other items I was hoping on completely ran out and J.Crew won't be getting my sale dollars on them. But maybe this means that I, and others, will be quicker at the full-price stage the next round.
Oh, and I'm puzzled about the "backordered" status, too. Does this mean there will be a second run of an item? Or is it just an estimate for when a returned item will be available for purchase again? For some of the items that have sold out very quickly so far I think it'd almost be stupid not to have a second run. Surely people are still interested in buying a Schoolboy Blazer in Houndstooth, at least at 25% off full price (I know I am!). And for the items that are labeled as "backordered" the moment they're available, I wonder if they're just not ready to be shipped yet? Maybe the shipments haven't even come into the warehouse??
ReplyDeleteRecently I ordered a FP scarf that was backordered, and CS contacted me in what seemed like an effort to convince me to cancel the order. I didn't, and it shipped a few days later. Odd.
DeleteJC does seem to be succeeding in training me to avoid final sale. Much easier to avoid temptation when there's no hefty % off. I've been trying to learn that lesson for some time, so maybe I should be grateful?
ReplyDeleteOne thing that may be factoring in is the global push. J Crew pieces are being featured in magazines here in Japan far more than I ever remember them being even when we had J Crew stores here. I assume they are promoting and increasing their visibility and customer base in other countries as well. The new customer base may not be as programmed to wait for mark downs. Just a thought.
ReplyDeleteSmart move on J.Crew's part. I recall reading somewhere that retailers like 'crew are pulling back on inventory levels. Better to sell out at full pop or a slight mark down than to go on sale. And it's working; Bowery slim pants in English wool completely sold out in under two weeks and they were about $200 Canadian.
ReplyDeleteItems at FS definitely fuel Ebay sales, it's almost like there is a J Crew FS and then another Ebay FS. Maybe they want to try and shut down the secondary re-selling market by buying less stock and avoiding the big FS selection.
ReplyDeleteI wonder how Factory plays a role in this strategy. Did you miss out on the hen sweater or the heart blouse or the paintbrush cardigan? Certain plaid shirts? Raindrop lace top? Herringbone sweaters, jeweled tops? They have all been redone at Factory. The quality isn't always there, but that might be their plan. People buying exclusive full-price items might not be shopping Factory anyway.
ReplyDeleteI'm interested to see how this all plays out. Smart move to offer 25% on new arrivals that were priced very high - the discount brought them down to "normal-for-JC", which we used to also wait for a promo on.
ReplyDeleteThe thing with the long backorder on some items is that a lot of retailers are offering very similar pieces that are in stock now. I had a pair of the skinny sweatpants on backorder till the end of September, then that date got pushed to mid-October. I found a very similar pair from Joe Fresh at about a third of JC's price, and for my purposes that worked fine. You can get marled sweatshirts, ponte leggings, loafers and down vests pretty much anywhere this season, and if you're not looking to wear these looks next fall, you can do much cheaper elsewhere.
I do think a lot of this sold-out stuff will be back once returns are processed. There are still some fit and construction issues with pieces, and for some, there are items that won't live up IRL. For me, this all has just helped me to be more choosy when it comes to purchases, not less.
It just re-trains me to buy elsewhere. Because of quality, materials and construction, I have a set price point I'm willing to pay at J Crew. If I can't get an item at the price I think it's "worth" I just won't bother. I'm not going to spend more knowing I'm not getting what I paid for. I've just been taking more of my money elsewhere these days. Oh, yeah and waiting for it to come out in a Factory version next year.
ReplyDeleteegyptomaniac, I am with you completely. This strategy has not made me buy J.Crew at higher prices, it has driven me to go to other retailers like Gap, Land's End, BR, even Target, where I can find pieces of similar quality (sorry J.Crew, you're not fooling me!) at cheaper prices. For example, I bought some navy "toothpick" cords at Target for $20 and they are no better or worse than J.Crew toothpick cords. Actually, I like them better because they aren't ankle length and don't stretch out during the day. But, I have always been a bargain hunter and am much more driven by price and quality than by brand names.
DeleteI noticed last roll-out when they did the promo on new arrivals and lots of items sold out, days after the promo ended they slowly started to reappear in most if not all sizes. I do think the promo encourages people to order more to try - but not necessarily keep. There are things that actually did sell out but to date, I have been able to find (almost) every single item I really wanted on sale with promo. (The one that got away I found on eBay even cheaper). I have been trained to order the few things I really like to try, but rarely will I keep them. If I really liked the item, I will hold onto it and almost every time, it goes on sale within the 60 days. That may change with less inventory - but I didn't have any problems with that on the last roll out when I was patient - and like others have said, when I'm patient I either realize I really don't love or need it or I did a better version somewhere else.
ReplyDeleteI don't get to the store often but I did notice that many things that were sold out online were available in multiples at the store (ie scarf sweater) - also thinking maybe more inventory is going to the stores and less online?
Mack, I think you're on to something. With this most recent roll-out/promo, some things sold out immediately, like the Rory calf hair boots (for over $400!). A few days later the boots were available again in all sizes.
DeleteThe other JC strategy (known at the moment as the "Claribel" strategy" is to have an item sell out quickly and then appear again, one size at a time, for months on end.
I'll admit, the Claribel strategy keeps me checking the web site...
Who is Claribel? I only know of the one from Mickey Mouse Clubhouse. Help!
DeleteI also agree that maybe more inventory is going to the stores. I went to 2 stores this weekend and saw multiples of the Merino Zippered Sweater Jacket in both colors, the Painted Jewel Sweatshirt, the Linen Bazaar Tee, the Stretch Boucle Jacket and the Merino Scarf Sweater. In addition to this, I wonder why my Tall Cafe Cotton Trousers are backordered until December. Sure the backorder dates are estimates, but it's going to be too cold for them in December.
DeleteI agree w/silver_lining that there will be returns. If I wait 2-3 months for a waitlisted item, it better be awesome. If I even remember that I ordered it. There are many other retailers with similar items, so we have the option to look elsewhere if what we want from J Crew is out of stock. Of course no one does color like J Crew, so some things cannot be duplicated. Speaking of duplications, I think of what an item might look like in a Factory version. I'm not too keen on the way the Factory blazers fit me. I don't buy them because I really need the fit of the petite in most cases. However, I can see waiting on something like the jeweled sateen shell (review) because the Factory will likely be as nice as the retail. I actually bought the shell in the 1st release for $79.99 + 30%. I thought it was a good price & will pair well at holiday time with the red plaid capris. I thought it was going to get a 2nd cut, but I decided $56 was a price point I could stand without feeling bad if it went much lower. And now they've released a 2nd color version, so maybe the 1st one won't even get a 2nd cut in-store for awhile.
ReplyDeleteI have to say that the repeat of styles (jeweled sweatshirts) has slowed down purchasing for me in a big way. I didn't have many orders in Sept and half of them were size exchanges.
Echoing earlier comments - this is fundamentally about managing gross margin % and inventory. IMO, in the past JCrew has not focusied on this as they should have (e.g. +1,000 items in women's sale) - and instead were focused on top-line sales. However, high top-line sales with large mark downs do not generate as much bottom line cash, relative to "lower" sales with higher margins. JCrew's private equity backers only care about bottom line cash. Thus, JCrew is tweaking its business model with the implication of less inventory and fewer deep discounts.
ReplyDeleteI am actually glad. This buy and rebut because the price dropped in half is exhausting.
ReplyDeleteIf anything, this is allowing me to buy from other brands, as others here are doing. The past few days I've bought from Boden and Lands End (whose F&F sale ends today) multiple times, and nothing from JC since the last 25% off everything sale.
ReplyDeleteGigi - sorry to be opaque. The Collection Claribel dress is the black and white cocktail dress from the last rollout - $525. I love this dress.
ReplyDeleteI have hardly bought a thing since April except for 2 presents and a factory houndstooth sweathirt and I don't even like it. I have been shopping at other stores and loving it. The fall roll outs have been super underwhelming for me. It's actually been great and I don't check the sale section in the mornings anymore.
ReplyDeleteRemember the online J. Crew customer survey many of us got a while back? Remember the questions?
ReplyDeleteSo much of that survey was about promotion-based purchase behavior. Well, Mickey must have received the findings of the survey - in addition to the internal gross margin analyses NorthShore Nan mentioned - because the reduced inventory, stock-outs, and FP promos lately are all textbook strategies to drive perceived product scarcity and reduce sales %'s on deal.
J. Crew is courting more affluent, less price-sensitive customers with the retail brand, and these strategies will work IF the the buyer thinks the product is superior.
That's the decision now ... is J. Crew worth FP or near FP to you? For me, the answer is sometimes yes and sometimes no!
i have been buying less jcrew recently because i can only afford it on sale. i splurged and got a few normal price items during the 25% off but only because i knew i needed them. also, it has been bugging me that things are in the sale section and then the next day they are full price.
ReplyDeleteThe new strategy works for me. I don't like shopping at places like Kohls where you can't be sure what the real price of an item is because everything is always "on sale." Just pick a price and let me decide if it's worth it/I can afford it.
ReplyDelete