Saturday, November 12, 2011

Great Design vs. Price Point

Urban Lighting Decor  2008

This past season, I had time to reflect on new ideas that we have developed into successful products and those that were not successful.  Unfortunately, (or fortunately),  depending on what side of the question you are on, there are two ever present questions which we as designers and business owners must answer:  
  1. Do we have a new idea that will initiate a new wave of products and create sales for an extended period.  Is the idea a new idea , or simply a new rendition of an older idea.  An older idea is not necessarily bad.  They can work also if enough time has passed and the new rendition is fresh and truly updated.                                                                             
  2. Price Point.   Ah yes, that nagging, irritating fly in the ointment (for designers anyway). We routinely create new and “fun” ideas only to have them watered down (at best) or completely obliterated  by retail price requirements.
The candle garden concept which we developed first at Pomeroy many years ago, was by this time a mature category, and needed a fresh take.  Prices were rising for raw materials and this put a strain (to say the least) on how much we could put in a box.  So, the question was , how do we “move the needle” in a design sense while holding onto a price point.  We were able to create a new look using a butler table idea combined with candles and glass and rocks.  The look was definitely new from what we had created previously and it was set to retail at 24.99.   
Well, after releasing the item at retail it became clear that it was not going to set the world on fire in terms of sales, so after some negotiation with the retailers involved they lowered the price to 19.99.  Well, the results speak for themselves.  The retailer sold through the inventory (20,000 units) in a matter of weeks.
A bittersweet vindication.  I knew the design was solid and new and should by well received by the Pomeroy customer.  Through this experience “She” was just telling us that she liked the design and aesthetic of the piece;  she was just not prepared to spend 24.99.   
In my next addition to the blog I will follow up with two similar items which were released at the same time to different retailers and one of them was very successful.  I’ll share my thoughts on why.