Coach, the New York-based luxury handbag and accessory line with a global presence, is definitely learning a thing or two about consumerism. Having just watched 21% of their Q3 profits go into the pockets of Michael Kors and other luxury dealers, it appears they cannot get their North American act together. Sure, their European and Asian stranglehold continues to impress; suffice it to say, we can all treat Coach’s downtrodden financial state in North America as an opportunity to learn.
Here’s what businesses great and small, offline and online, can learn from Coach’s concurrent demise:
Engage the Consumer
Coach boasts 5 million Facebook followers, yet all they do is ‘like’. I’d be willing to bet my iPod with 3,300 bought-and-paid-for songs that I could scrape up 300 million people that like milk. The difference between consumers ‘liking’ and ‘buying’ involves an action which takes less time than showering yet reaps more benefits than smelling good: engaging the consumer. This means mollifying the displeased 30 year old woman that was treated like garbage at her last trip to a Coach outlet. Or, it could mean a simple poll to figure out what women really want in stores. Perhaps it means spreading news of interest to current Kors or Vera Wang customers on the fence about buying from Coach.
Today’s socially demanding, fast-paced environment should merit more attention than Coach is currently giving its customers, the reason why people flock to a more socially active society found within Michael Kors.
Takeaway: Whether you see social media as relevant or not, that’s where consumers share experiences; the more positivity you foster, the more new buyers will flock to your side. Speak often, yet with relevance. Listen to anger, and respond with real answers or ongoing solutions – not boilerplate copy/paste crap. Be a brand ambassador, and avoid operating your business like a kleptocracy.
Include all Income Classes
Vera Bradley, the peer to Coach and co-competitor to Kors, hasn’t been faring much better of late. However, Bradley has two distinct selling points that Coach cannot touch:
- An obvious ‘Sale’ link located right when consumers land on Verabradley.com;
- Free shipping on orders over $75, which is half of Coach’s threshold.
With these two obtrusive items located where consumers can clearly see them, we’re now able to make two more observations:
- Vera Bradley is running with Coach on a luxury level, yet cares enough about the middle to lower class woman;
- Coach isn’t offering sales on discontinued or heavily overstocked items, which speaks volumes about the former statement.
If you’ve ever been to a Coach Outlet store, you’ll notice that sales do exist on certain items; this, however, does little for the fashionista that happens to be disabled, nowhere near an outlet or currently unable to travel due to work or family business. Offering competitive sales online will not only encourage women to shop online (duh), but would garner the opportunity for millions of disabled or middle/lower income class women – you know, the ones working their fingers to the bone for pennies – to enjoy Coach products.
Takeaway: There’s nothing wrong with offering higher end products that appeal to ‘heavy spenders’. What becomes the problem for many businesses is when they attempt to grow beyond their preset demographic, yet continue with their same price points. Should you wish to expand beyond your company’s current comfort zone and lower price structure to encourage a larger audience, make sure that price point is realistic. Make your ‘free shipping’ offers worthy enough to run with, or overrun, competition.
Coach-ed by Players?
Imagine boxing against Manny Pacquiao in your first official appearance in a boxing ring. You may last until the first round bell, but highly doubtful given Pacquiao’s quickness and punch accuracy. For many, that first experience would sour their stomachs enough to quit boxing forever.
Coach isn’t exactly a newcomer to the fashion ring, yet they’re still managing to get battered by competition; in many cases, they’re getting TKO’d in the third round. Besides, North American markets are rather tough to begin with right now, given the vast majority of unemployed professionals were luxury shoppers at one point.
Whether or not Coach’s recent abysmal earnings performance is giving investors a sour stomach remains to be seen.
In order to go 10 rough rounds with your competition each day, you’ll need an well-rounded plan of social attack. You’ll need to cater to both high end shoppers and lower income buyers that would love the feel of Coach products in their hands. Finally, you’ll need to invest in social representation for growing accounts to avoid being that business that spits in the face of consumers after the purchase order is filled.
Another idea to consider: watch your competition before engaging them. Learn their moves, embrace their finesse. Do this from a distance, taking notes of all flaws, flounders and fatalities. You’ll be surprised how easy it will be to overtake a company’s high ranking sales position simply by wearing their social presence down – much like what you’re seeing right now with Coach.
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