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Talking Business: Will US shoppers buy into Primark’s everyday low prices?

Lorna Hall is head of market intelligence at trend forecasting firm WGSN

Lorna Hall: 'The challenge for Primark is whether the US shoppe will embrace its fixed pricing'

Lorna Hall: “The challenge for Primark is whether the US shopper will embrace its fixed pricing”

Primark’s goal is to provide the best value fashion in the market and, judging by initial price-led advertising in US magazines ahead of the launch, the retailer is looking to steal a march on the nation’s retailers. With its everyday low price proposition, it is all about firm statement price points rather than promotion.

Using Primark’s key item-led US marketing collateral, which calls out price points ahead of its launch in Boston on Thursday, we have compared these with data from WGSN INstock, our online retail analytics tool and found that prices are coming in below Old Navy, Forever 21 and H&M.

Primark will be selling women’s parkas with faux fur hoods for $35 when it opens. WGSN INStock data reveals that similar styles from Old Navy, without the faux fur trim, are selling from $49.94, while Forever 21 parkas, again without the faux fur, range from $34.90 to $82.80, with the majority selling for $50 to $74.99. Meanwhile, at H&M the entry price for parkas is $39.99, with the majority sitting in the $50 to $74.99 price bracket. 

On jeans, the US market gets much more competitive. Primark is advertising women’s black skinny jeans for $22 a pair. At Old Navy the majority are being sold between $30 and $39.99. H&M’s skinny black jeans are on sale from $20, with prices averaging at $24.99, while Forever 21’s skinny jeans start at $7.90 and go up to $34.99, with the majority being sold for $20 to $29.99. 

Men’s skinny jeans are being advertised at $15 at Primark against an opening price of $15.90 at Forever 21, with 66.7% of Forever 21’s full-priced jeans sitting between $20 and $29.99. At H&M in the US men’s skinny jeans range between $19.99 and $49.99, with 85% of skinny jeans sitting between $30 and $39.99.

Meanwhile, men’s parkas are being sold for $35 at Primark, with a similar style selling for $59.99 at H&M and a comparable parka selling for $70.99 at Walmart. 

The challenge for Primark then is whether the US shopper, famed for its addiction to a cut-price deal, will embrace its fixed pricing.

Many US retail commentators think this could be the Irish retailer’s achilles heel. They cite JC Penney’s disastrous flirtation with EDLP [every day low pricing] during Ron Johnson’s tenure as proof that the US shopper prefers a notional saving or promotional event to a rock-bottom entry price.

On the face of it, Primark will look cheaper in the main than many of its competitors. However, without a transactional website, it will rely on social media and online marketing to get its value messaging across, so big brand statements are going to be necessary to ensure that it gets a share of shopper attention.

WGSN, like Drapers, is part of Top Right Group.

 

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