Interesting article...

TygerKitty

~*~ addicted ~*~
O.G.
Feb 26, 2008
16,850
7
Colorado
Hmm lots of good stuff in this article:

"And when you see our product in our stores - and I think you got a preview of some of the new collections when you visited here - you're going to find, as I said before, that they're softer, drapier, lots of new materials, and this has been in the works for a long time."

I like the idea of "softer, drapier" fabrics... sounds divine! And new materials... I wonder what they will use?!?

And this might be part of the confusion with events like PCE... they don't sound like they are completely set in stone:
"With regard to our promotional activities focused on driving factory consumers into full price, that pilot was very successful. And we do know that our factory consumer loves the Coach brand, but she's a value shopper. She only wants to buy it on sale. Right now we're monitoring the performance of the factory consumer who purchased through one of our loyalty programs at full price to see whether we're able to attract her without a discount at full price. Our general view is that we will not be very successful, that she will need to be promoted to come to - our product will need to be promoted for her to come to full price. Our margins are so good that we're very comfortable with the profitability from those promotions, and we are actually conducting another loyalty event - I believe it's going to be next month - focused on the factory store consumer purchasing in full price."

"First, with regard to promotional activities, we don't think that's going to be necessary at all. We expect promotional activities to remain at this level or decline over the next few quarters."

Interesting!!! Sounds like we all shouldn't hold our breath for lots of PCE and coupons in the '09 FY!
 

coachfreak

Looking for LVOE
Hmm lots of good stuff in this article:

"And when you see our product in our stores - and I think you got a preview of some of the new collections when you visited here - you're going to find, as I said before, that they're softer, drapier, lots of new materials, and this has been in the works for a long time."

I like the idea of "softer, drapier" fabrics... sounds divine! And new materials... I wonder what they will use?!?

And this might be part of the confusion with events like PCE... they don't sound like they are completely set in stone:
"With regard to our promotional activities focused on driving factory consumers into full price, that pilot was very successful. And we do know that our factory consumer loves the Coach brand, but she's a value shopper. She only wants to buy it on sale. Right now we're monitoring the performance of the factory consumer who purchased through one of our loyalty programs at full price to see whether we're able to attract her without a discount at full price. Our general view is that we will not be very successful, that she will need to be promoted to come to - our product will need to be promoted for her to come to full price. Our margins are so good that we're very comfortable with the profitability from those promotions, and we are actually conducting another loyalty event - I believe it's going to be next month - focused on the factory store consumer purchasing in full price."

"First, with regard to promotional activities, we don't think that's going to be necessary at all. We expect promotional activities to remain at this level or decline over the next few quarters."

Interesting!!! Sounds like we all shouldn't hold our breath for lots of PCE and coupons in the '09 FY!

UUHHHHH you beat me! I had that section on promotions selected, copied, and ready to paste!

I also thought the information on making the retail stores more upscale was interesting. I typically drive the 85 miles to a flagship store in Troy, MI because of the other shopping availability. I am assuming that it is close to the Short Hills that Lew continued to refer to. I wonder what this will entail to make these type of stores more upscale. THey are in direct competion with Gucci, LV, BUrberry, and Michael Kors to name a few.

I also thought some of the reference to price-points were interesting and in contrast to a previous article we read on trends coming in BOTH directions (more high-end $700+ and more <$200).

Great read!!!

***EDIT
I read it a little closer now. I am not sure this means that PCE will go away, but the "additional" PCEs that occured for the factory store shoppers may cease. I am sure they were able to determine that MANY of us that typically shop full-price were still able to take advantage of both, and since they may not have been able to lure many of the factory shoppers into the boutiques, I think they may not continue those. However he made this point.
"Right now we're monitoring the performance of the factory consumer who purchased through one of our loyalty programs at full price to see whether we're able to attract her without a discount at full price. Our general view is that we will not be very successful, that she will need to be promoted to come to - our product will need to be promoted for her to come to full price. Our margins are so good that we're very comfortable with the profitability from those promotions, and we are actually conducting another loyalty event "

So, if they are satisfied with the profitability why offer these to more than the people you are trying to lure. I know quite a few people who have said they will start spending less because of not getting the rewards. I would particularly be interested in how they will manage the data. My friend for instance that got the PCE-factory for NOv and Dec did in fact buy a $400 bag, but since we did everything one transaction (in my name) they won't know that. It will just look like I spent $1600 and I am not even receiving the promotions anymore.

ALso, how will they deal with returns. If person bought something at the event, but later returned or exchanged is that still counted as a success since they did come into a boutique and made a purchase.
 

TygerKitty

~*~ addicted ~*~
O.G.
Feb 26, 2008
16,850
7
Colorado
UUHHHHH you beat me! I had that section on promotions selected, copied, and ready to paste!

I also thought the information on making the retail stores more upscale was interesting. I typically drive the 85 miles to a flagship store in Troy, MI because of the other shopping availability. I am assuming that it is close to the Short Hills that Lew continued to refer to. I wonder what this will entail to make these type of stores more upscale. THey are in direct competion with Gucci, LV, BUrberry, and Michael Kors to name a few.

I also thought some of the reference to price-points were interesting and in contrast to a previous article we read on trends coming in BOTH directions (more high-end $700+ and more <$200).

Great read!!!

***EDIT
I read it a little closer now. I am not sure this means that PCE will go away, but the "additional" PCEs that occured for the factory store shoppers may cease. I am sure they were able to determine that MANY of us that typically shop full-price were still able to take advantage of both, and since they may not have been able to lure many of the factory shoppers into the boutiques, I think they may not continue those. However he made this point.
"Right now we're monitoring the performance of the factory consumer who purchased through one of our loyalty programs at full price to see whether we're able to attract her without a discount at full price. Our general view is that we will not be very successful, that she will need to be promoted to come to - our product will need to be promoted for her to come to full price. Our margins are so good that we're very comfortable with the profitability from those promotions, and we are actually conducting another loyalty event "

So, if they are satisfied with the profitability why offer these to more than the people you are trying to lure. I know quite a few people who have said they will start spending less because of not getting the rewards. I would particularly be interested in how they will manage the data. My friend for instance that got the PCE-factory for NOv and Dec did in fact buy a $400 bag, but since we did everything one transaction (in my name) they won't know that. It will just look like I spent $1600 and I am not even receiving the promotions anymore.

ALso, how will they deal with returns. If person bought something at the event, but later returned or exchanged is that still counted as a success since they did come into a boutique and made a purchase.
I agree, I don't think the promotions are going away completely but the last line of what I posted does talk about them decreasing them in the future... bummer! Good point about managing the data... it is frustrating that they would call it a 'preferred customer event' but once you spend your money you seem to no longer receive promotional discounts... it does sound like Coach wants to lure you in with the bags alone but then they shouldn't call it a PCE!

I remember the other articles and discussions about price points in high and low areas so yes, I also found that interesting that they want higher price points; especially in a worsening economy!