Hello Everyone,
My recent collaboration with Bluestockings Boutique on small business ownership inspired me to explore one of the core elements of our discussion: the price of lingerie and how consumers perceive it. Do a quick search on Google (or your search engine of choice) for core bra styles from major lingerie brands like Panache, Natori, and Affinitas, and you may be surprised at how challenging it is to find discount pricing anymore. If the bra is black, beige, white, or a newly released fashion color, it is probably listed at full price, and if it’s not, wait a few days. Eventually, someone will report the infraction, and the item will quickly return to its original Manufacturer’s Suggested Retail Price (MSRP). But why have retailers all across the US finally agreed to uphold the same pricing schema despite years of competing for consumer dollars based on low cost? Simple. Manufacturers have grown tired of watching their carefully designed, high quality products be associated with low prices and discounts. Unlike many avenues of retail, intimate apparel remains fairly exempt from what’s known as inflationary pricing—a practice where the retailers and/or manufacturers inflate the price of a product beyond its true worth to allow for constant discounting and price-based competition. As a result, the suggested retail price on most items has been determined by the manufacturer to be a fair evaluation of the design process, fabrics, manufacturing, and associated retail expenses like rent, utilities, and the cost of a professional fitter. In short, there’s no wiggle room for lowering that price and maintaining a successful profit, particularly for boutique retailers. Enter the advent of MAP Agreements.
MAP stands for Minimum Advertised Price and typically refers to a policy whether written or implied that you will not advertise products sold to you (the retailer) by a manufacturer for less than their set retail price (MSRP). If you violate the policy, manufacturers reserve the right to withhold current orders or, in some cases, completely sever ties with your business. Because of large online stores undercutting retailers with rock bottom prices, particularly discount mecca Amazon, many well-known companies implemented MAP programs to preserve not only the minuscule margins retailers operate within but also to protect the reputation of the brand itself. The majority of intimates companies in the marketplace are not only established in the industry but also focus on providing quality items to customers, both in terms of the materials used and the thoughtfulness of the designs. As such, they do not want to be associated with brands known for slashing prices or offering deep discounts, usually marked by an inferior quality or a poor fit.
Under MAP agreements, a manufacturer cannot dictate the selling price of a bra but rather puts limitations on what can be advertised, whether online, through print ads, or even over the radio. The distinction is subtle and essentially holds that a retailer can price an item with an MSRP of $78 in the store for $69 but cannot advertise the discount anywhere else other than within the store itself. One of the advantages of the program is that if all retailers follow the MAP, the consumer dialog shifts from lower prices to the value of the fitting and shopping experience, giving boutiques a greater advantage than competitors whose sole draw was pricing.
Under the aforementioned distinction, the MAP legalities do not prevent a retailer from continuing forward with lower prices in-store only; however, quality bras cost more for a reason. The final retail price of the bra has an inherent value representative of the materials, the craftsmanship, the research and development, the overhead of owning a storefront, and last but not least, the time and knowledge of the fitter assisting you. In fact, manufacturers benefit from professional fitters as much as their customers. Bra fitters can often quickly pinpoint which bras will work for customers and can offer sizing guidance to ensure brands and their products are given a fair representation. Scrolling through online reviews of popular styles reveals how often a bra is returned simply because of a sizing or shape issue, usually leading to a mediocre or sometimes negative review of an otherwise fantastic product.
Bra fitters are also some of the best brand advocates, offering customers extensive knowledge of other products carried within the line as well as how those products fit, feel, and wear over time. In addition to informing customers of their experiences, they also send that feedback to manufacturers to help them phase out less successful designs and even to inspire newer, better ones. Boutique owners and fitters deal directly with customers every day, and because of that experience, they are uniquely positioned to help the lingerie world as a whole become more inclusive, to offer better products, and to respond quickly to consumer demand.
However, because most fittings are marketed as “free,” customers sometimes forget they were provided a valuable service by a trained professional. The “lowest price” business model transitioned an industry centered largely on a valuable service associated with high quality items to being one where consumers no longer feel they can trust the retail price as being a fair representation and will seek out discounts instead—a shift leaving many small businesses unable to compete in the marketplace. Generally, larger retailers can reduce prices on goods because they buy in substantial bulk which garners wholesale discounts and their overhead is typically lower. Amazon, for example, crawls the web searching for low prices and then undercuts them further, often using its booming Prime business to entice customers with further discounts and free shipping. For something like bras, the portion of the price which represents the in-store experience can be removed or reduced by online-only sellers to increase sales volume. To their credit, some people are extremely savvy to the world of bra fitting and require less help finding the right size and style, but others genuinely need the one-on-one consultation of an expert fitter and/or the ability to try the bra on before purchasing.
Boutique owners have even begun advocating for a nominal fee for fittings transferable to store credit in order to preserve the value of the fitter’s time as well as to deter show-rooming—when customers take advantage of being able to try on products in the store and then order online without purchasing. Despite the inherent value in a fitting, the inclusion of “free” has left many people assuming a bra fitting does not cost the retailer anything. Bra fitters often go through extensive training to learn how to properly fit a person and to find the right size and style for their clients. Many are the owners themselves who have also put in time going to trade shows, working with sales representatives, and researching the styles to ensure the products they offer are the best quality with a good reputation for fitting well and lasting longer. “I like to remind people that working with a fitter and being able to try the bra on before buying is certainly worth paying retail rather than scouring the Internet to buy the bra for $10 cheaper,” says one anonymous store owner.
The Rise of Materials Cost
MAPs are not the only culprit in price hikes across manufacturers. In some cases, bras have simply become more expensive to produce. In 2012, the Elomi Hermione (now Amelia) debuted at a $69 price point. In less than six months, the price rose to $73. When it was tweaked and re-released as Amelia, it jumped again to $78. Other bras whose prices have changed or are changing include the Parfait Charlotte ($38 to $44 or $48 depending on the print), Fantasie Rebecca ($69 to $74), Panache Jasmine ($62 to $67), Wacoal Red Carpet Strapless ($60 to $65), and so on. It’s happening across the industry as materials costs rise and as brands continue to take a more thoughtful approach to designing. As little as five years ago, the fuller-bust market, for example, offered nowhere near as many options as it does today, and in fact, many companies have continued to improve the styles they offer in response to fitter and consumer feedback. Panache, for example, has listened to customer complaints to tweak earlier designs, improving the shape and comfort for the modern consumer. All of the additional design time and materials costs contribute to a general price increase for later variations which also adds to the wholesale and retail cost accordingly. Blogger Sweet Nothings recently collaborated on a two part interview (read Part 1 and Part 2 here) with new full-bust designer Kim Hamilton to discuss the unique challenges and hidden costs behind bra designs, particularly in higher cup sizes. “In GG+ bras, there are higher costs due to choosing more suitable fabrics, having them laminated to the relevant stabilizing linings, higher gauge underwires, stronger elastic shoulder straps and powernet for the wings, even the hooks and eyes cost a few cents more when you move from 2 hooks to 3 hooks on the back,” notes Kim. When evaluating the cost of a bra, it’s important to remember that all of these small changes or improvements add up over time, and for every extra dollar added to the cost for the manufacturer, more are added for wholesale and retail to cover everyone’s expenses.
In our store, frequently customers ask us to find options under $40, particularly in the fuller-bust market, and when we’ve complied as best we can, the bras fail to sell. It’s always the bras in the $60+ range that customers love, casually remarking how they “would have to pick the more expensive bras.” Other retailers notice the same thing, especially those offering higher end lines like Prima Donna, Simone Perele, and Empriente which use top quality materials for decadent designs with superior fits. Clients do not pick the most expensive bras simply because they are the most expensive. They pick those bras because they are an all-around better bra. The higher price tag is not inflated to exploit the consumer but rather to represent how much time the company put into creating a fabulous design fully realized by the best quality materials. We all have our unique budgets as well as areas where we can or cannot spend additional money, but it’s important to distinguish between the value of the product itself and its value to you. For example, I have never been one to pay for professional manicures or pedicures, but having been located next to an amazing nail salon since opening, I know the time and experience which goes into that kind of service completely justifies the price.
Why Paying Full Price Helps You Long Term
Budgetary restrictions aside, paying full-price on intimate apparel actually benefits the consumer long term. For retailers, the more sales the business earns, the more likely the doors remain open to continue serving customers. Many small business owners I know, myself included, either work additional part-time jobs or take freelance work in order to make ends meet in their personal lives. Passion for the business can only carry store owners so far before eventually they move onto a less stressful, better paying job. Kat Migliore, owner of Luxury in NC’s gorgeous Outer Banks explains “When you only purchase on sale, it becomes less profit to pay our ‘salary’ or hire help for any needs we may have to serve you better. In my case, I depend greatly on your repeat business. If I help you find the most comfortable bra you have ever worn, and you seek outside sources to purchase the same item again, it is difficult for me to survive in order to continue helping other women.” By supporting the business, which means paying full price, consumers keep their favorite stores in business, giving them continued access to a wider range of products and services. Profits also fuel expansion efforts for retailers which can include bringing in new lines and merchandise, hiring and training more staff to assist customers, and ultimately opening multiple locations to better serve a larger area.
The Fuller Figured Chest writer Holly Jackson has often advocated using your dollars as a “voting” method to support manufacturers, designs, and colors that customers wish to see more of on the marketplace. The items which sell at full price are the ones most likely to either remain core staples of a boutique or to be repurchased in newer fashion iterations. If a bra takes too long to sell or needs to be discounted too often, retailers are less likely to buy them again, which includes size clusters. If a retailer finds they are always selling certain band or cup size combinations at a discount or infrequently, they may decide not to carry them in the future. Financially, it is easier for a retailer to only carry the sizes with the highest turnover to streamline a store’s budget. Kat Migliore empathizes with consumers but acknowledges the challenges faced by retailers especially ones catering to expansive size ranges: “I know we all like to get a deal or find something on sale, however this is very challenging for the sustainability of a boutique, especially one that offers educated and well executed bra fittings with a large range of sizes that are otherwise hard to find. Keep in mind, these sizes are hard to find because they are slower, if ever, sold sizes at larger retailers. This can lead to a specialty shop holding on to inventory much longer than it should in order to have those unusual sizes in as many choices as they can on hand for the customer who has trouble finding her size.”
While full price sales directly impact the retailer, they also have a long reaching effect on the manufacturer too. Intuitively, if a product does not sell for a retailer, then they will stop ordering it from the manufacturer. Your consumer vote not only applies to the local shop but also the manufacturer’s design team and business as a whole. The less a retailer orders from a manufacturer or of a certain style, the more likely those styles will be cut or reduced in future collections. In some cases, entire lines or brands are discontinued. In fact, Quinne Myers of the Lingerie Addict wrote a phenomenal post on how seemingly successful lingerie lines close all the time.
The MAP Contribution in an Imperfect World
The newly advocated MAP Policies are helping to level the playing field between boutiques, both online and in-store, and the discount pricing based businesses. By removing the element of price comparison, consumers have more incentive to continue supporting small businesses rather than search for the lowest price. However, while MAP agreements are becoming more standard in the lingerie world, they are still easily subverted by determined companies, including the manufacturers themselves. Brandy Ornelas of 4 Real Intimate Apparel in Las Vegas sums up the issue succinctly: “The downfalls to MAP pricing is that many manufactures are now selling online themselves at that MAP price . . . While they might follow their own pricing structures, they don’t have the same overhead as a boutique so that MAP price really only benefits the manufacturer, not the boutiques.” One of the trending topics among lingerie stores recently has been seeking out manufacturers who do not sell direct to consumer and who offer unique products not found everywhere. Fit Fully Yours, a Canadian-based lingerie company, is fiercely protective of the value of its products and the relationship they have with retailers, leading many boutiques to transition from industry leaders to an advocate of small businesses.
Violations of MAP policies can also become widespread with some businesses going so far as to use false names to sell discount merchandise without impacting their original company. In certain cases, the inability to sell at a discount hurts boutiques too. Not every product produced by a manufacturer fits well or lasts long term, and if you are required to keep every advertised price above a certain level, it may make it impossible to sell that inventory. Some MAP policies have even become so restrictive that they prohibit retailers for selling products on any third part software like Ebay or Amazon, forcing boutiques to question whether the policy is really worth implementing.
“I get the idea behind MAP,” continues Brandy. “It’s to create a brand experience and make sure that prices don’t erode. High end products want to stay high end . . . [but] I think that should be our decision. Our expenses are different than a manufacturers . . . Some retailers have such high rental expense that they have to sell above MSRP to cover the added expense. That creates another challenge whereas the customer expects items to cost the same everywhere. Then you have the close-out issue where the manufacture will offer a discount to the consumer for an item that is on closeout but maybe I bought at full price and I’m not be able to offer an additional discount. Customers are growing to expect the same deals from boutiques that they could get from the manufacturer direct.”
The Bottom Line
MAP or no MAP, at the end of the day, all small businesses are still at the mercy of consumer loyalty, and no amount of legislating price will change that every business must actively work to cultivate and maintain good relationships with customers. “And that is really our true to heart mission: to really help women in their correct size, no matter what the situation,” says Kat. Small businesses bring all of us wonderful opportunities whether it is a store which carries plus-sizes or fuller-cups to those which champion indie brands and new labels to something unique like Jeanna’s Bluestockings Boutique, a specialty retailer focusing on the LGBTQUIA+ community and ethically made products. Small businesses enrich our lives in so many ways, and it is my idealistic hope that together we can remind consumers that there is more to the shopping experience than finding the lowest price.
What are your thoughts on lingerie pricing and the new emphasis on standardized industry pricing?
Erica
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