Divergent strategies behind upstairs and downstairs brands

While discount shoppers are often thrilled to find good deals on premium brands, the reverse doesn’t always hold true. When a high-end consumer pays top dollar for a “value” product, or, discovers that his or her beloved, exclusive brand is now available to everyone down in the bargain basement—that brand is going to suffer.

Jeff Deisner, Chief Customer Officer for Branded Online (BOL), explains the importance of aligning appropriate products, promotional strategies, and brand-level perception in order to create a positive customer experience.

 

In the fashion e-commerce world, what are upstairs and downstairs brands?

These are industry-level terms that stem from the physical, retail world. “Upstairs” is shorthand for top-level, premium brands; “downstairs” is used to describe lower-quality or discount brands.

If a brand has positioned itself as an upstairs brand but the product doesn’t align with the other products upstairs, it’s probably not going to be successful. That’s when we need to discuss product strategy and how to make sure that the product you are trying to sell at a premium price is aligned with premium brand expectations.

 

How does BOL help align product quality with brand perceptions?

Working with our client Bebe is a good example of how we do this. In the past, Bebe had one vendor supplying all of the products for the store. Therefore, they could control the level of product being supplied.

Earlier this year, we began to engage with around 15 new vendors supplying products to Bebe. To be successful, we had to really go deep to investigate product quality—how it is made, how it fits, what material it is made from—to make sure that we are positioning products in the store that align with the upstairs perception of the brand.

We had discussions with certain vendors who sold some of their products to discount stores like TJ Maxx and Burlington Coat Factory. Even though the cost may be lower and the margins higher, these products didn’t align with the positioning of the rest of Bebe’s products. If we put those same discounted products into this high-end store, it would be a weight on the brand going forward. Customers would think they are being asked to pay a premium price point for a product that is not perceived as premium.

Our merchant buyers can help navigate these vendor discussions to make sure there is alignment.

 

How does BOL advise and build consensus with its clients on positioning their products as upstairs or downstairs?

This is an essential aspect of branding, and the best way to objectively manage it is to let the customer speak for himself or herself. Perhaps the brand perceives itself as premium and can therefore warrant a premium price point— but we don’t agree, and tell them so. Some brands have very emotional ties to their products and don’t want to listen.

But they will listen to customer feedback. So, we let the customers speak for themselves by collecting information from the customer service function of the business—like customers perhaps complaining the product is of low quality and asking why they are paying so much for it, or customers frequently returning products. These are good indicators that the brand is out of alignment over the perception of whether it is an upstairs brand versus a downstairs brand.

 

What else do you factor in?

Promotional strategy is very important. If your promotional strategy is limited to running deal after deal, you’re going to educate your customer that they don’t need to buy until deep discounts are offered. You’re going to start to position the brand as a discount, downstairs brand.

It’s important to create very specific, customer-based promotions that are focused on keeping the price points where they need to be, while also helping customers feel like they’re getting a deal. This needs to be done very strategically so that customers will continue to buy without heavy discounts.

 

How does that apply in the context of a department store, like Macy’s, where everything is always heavily discounted?

Although Macy’s itself is traditionally seen as an upstairs brand, they’re trending downstairs at the moment. They are becoming a very promotion-heavy retailer.

By contrast, Nordstrom has done a great job of offering semi-annual, deep-discount sales that keep their customers really engaged. They’re able to promote very lightly throughout the rest of the year and position themselves as a premium brand. Customers also buy because of some of the other benefits — like excellent customer service and liberal return policies — that come along with doing business with Nordstrom.

Luxury brand shoppers understand that higher quality products cost more. They also appreciate—and expect—the elevated customer experience that premium brands offer. Connect with us to learn more about how Branded Online can help strategically align your brand with these expectations.

2019-10-14T17:49:00+00:00 By |Blog|

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