Overpriced Goods

I have no problem with the existence of luxury goods such as Bentley automobiles and what can be found in Hermès stores.  After all, their creation involves the employment of lots of people, and that's good.  And if a buyer has plenty of money to spend on such items and does so, that too is fine because it helps keep the economy chugging along.

A few of us have to keep an eye on our spending.  I don't know about you, but I seem to maintain a mental sense as to whether a product is overpriced.

That sense is clearly subjective.  In almost all cases I have no knowledge of the cost of materials and labor that go into something.  I do know what inexpensive products of the same kind can cost in an approximate sense.  I seldom comparison shop, but that option would yield better information and would be easy to do, especially using the Internet.

Take the case of womens' purses.  My late wife for several years was enamored of a particular Chanel design.  Year after year we would walk past the Chanel store in the Wynn casino in Los Vegas, and each time the price would be several hundred dollars higher than the last time on the item that we first saw priced at around $3,500.  She could afford it, but couldn't quite justify buying it, tempting though it was.

I just checked the Web and saw a Guess purse priced nicely under $100.  Functionally, it is essentially the same as the Chanel item.  Now, the Chanel purse surely was made of better materials -- but the difference couldn't have cost the maker more than several hundred dollars more.  And the Guess purse was probably made in a low-wage country whereas, for all I know, the Chanel might have been made in high-wage France.  Again, the difference was probably a matter of hundreds of dollars and not thousands.  I do not know how much it actually cost Chanel or its supplier to make that by-now $4,000+ purse, but surely it was far less than the asking price.  Even allowing for distribution, marketing, and retailing expenses, that purse could be considered overpriced.

Nevertheless, those purses do sell because of intangible factors related to the various motivation buyers bring to Chanel stores.  If it's fine by them, it's fine by me.

I admit to liking certain brands such as Filson, Barbour, Belstaff and Paul & Shark.  Filson and Barbour jackets are priced at the upper edge of my comfort zone.  Paul & Shark sweaters usually cost more than I'm willing to pay, so I usually buy mine when they are on sale.  The same is true for Belstaff jackets.  However, I did see a particularly enticing Belstaff in their Munich store in May and bought it even though it cost about 50% more than I would have preferred to pay.

Another case is Burberry.  Over the years I've purchased two of their trench coats and a sweater or two.  Nowadays what they offer strikes me as being about double what I think is their worth.  Even items in their outlet stores strike me as being too expensive.

You might wonder why I don't simply consider less expensive brands.  It's because I'm probably of the same mindset as those who shop at Chanel and Hermès, but at a different zone of the price/prestige scale.

Slug & Lettuce

I've noticed this pub the last two times I visited Bath in England.  I thought it was a Bath-only place, but then stumbled across another one in London a few days later.

Indeed, it's part of a pub chain with a sketchy history, as this Wikipedia entry indicates.

Anyway, the name is both cute, memorable, and slightly off-putting.

Some Fallen Mighty Retailers

Not long ago I posted about the once-dominant news magazine Time and that it's a shadow of its former self because the whole category of weekly news magazines has largely imploded here in the USA.  (Some argue that the Economist, a British version, is still doing fine, but I have my doubts about its viability in the medium-run.)

Then there are companies dealing in retail sales.  A few days ago I was driving through Tacoma on Interstate 5 and glanced at Tacoma Mall, noticing that the Sears store there had closed.  Sears has been in decline for many years now, even having sold some of its prime assets to bring in cash.  The Tacoma Mall store closing is just one of many such closings.

Yet 40 or 50 years ago Sears was a retailing powerhouse, having grown from being a major catalog mail-order operation to a bricks-and-mortar giant by mid-century.  Its clientele was Middle America -- upper Blue Collar and lower White Collar workers and their families.

While Sears was at its peak, newer retailing concepts appeared.  But these concepts were faster-moving from birth to decline or extinction, being more like fads or fashions.  What I find interesting is that many of these were hailed as transformative, waves of the retailing future.  And by implication, they might rule for many decades.

An example is E.J. Korvette, a discount clothing retailer that met with sudden success in the 1960s, even having a store on New York's Fifth Avenue.  Then there were the "Big Box," "category killer" stores of the 1980s and 90s.  Their strategy was to have huge selections of a single class of merchandise, providing potential customers the opportunity to fairly quickly find what they needed without traipsing all over town from store to store (remember, this was mostly pre-Internet).   An important example here is Toys "R" Us, that many observers thought would destroy all toy-selling competition.   Then there was Blockbuster, a leading renter of video tapes and compact disks of movies and did roaring business around the turn of the present century.

All those companies are defunct.  Stronger competition probably did Korvette in.  Walmart and the Internet are two factors in Toys "R" Us's failure.  Blockbuster's demise was probably triggered by the Internet.

The current hot retail paradigm is Internet-based sales facilitated by massive, efficient distribution systems.  Looks like this is The Wave of The Retailing Future.

Right?