Bob Geldoff and the Boomtown Rats may hate Mondays but we seem to hate January...

January is always the toughest month here at Archibald... no matter how much we try and stress a message of craftsmanship, at this very moment people are still price-sensitive and brand loyal. When traditional retail goes into sale mode offering discounts of 50,60 and even 75%, it effectively knocks out the price advantage of purchasing from a direct-to-consumer brand concept such as ours.

The basic psychology of it makes sense, during this period the other guys are on sale and offer an exciting incentive... purchase today and you will get something at a dramatically reduced price. Consumer impulses are triggered, people are happy and the industry powers on having just sold consumers once again on the illusion of a good deal!  Archibald on the other hand is not meant to go on sale because our model means we theoretically are always on sale... We do not do the excessive mark-ups so we do not create the room for discounts to work... So we provide no incentive for TODAY. Most items make up a permanent collection so if you can get it today, chances are you can get it tomorrow... if it goes out of stock, chances are it will soon be back in stock and available for pre-order. The mechanism offers no incentive to act immediately so that consumer decision is being pushed...the priority today are the people offering an incentive.

This problem has in fact been eating away at me for quite some time. Every year, December comes and every year it is a bigger December than the last... we experience unprecedented growth, more items reach more people and thus not only is the value proposition from a pricing point of view further understood... but, more importantly, the item is in the hands of the customer and it another new convert. That is the idea, have someone take a chance and lock them in with the major competitive advantage - a dedication to craftsmanship. It then becomes increasingly clear that beyond a disruptive business model we prioritise true quality and beautiful craftsmanship over everything else - we are different.

...and then comes January...

What makes it all a little more frustrating is the depth of what has begun to go on sale... Up until very recently, a sale from a brand such as Burberry would include what are known as seasonal items - items that do not make up the classsic, permanent collection. However, this year we have noticed a small turn in strategy where some brands are in fact putting cheaper made versions of classic items on sale. It is an interesting tactic, and keeping with the premise of traditional retail - frightfully dishonest... however it does have an impact. All of a sudden what appears to be a classic product from a traditional luxury brand is on sale... but it is not quite the same. Perhaps it is made in a cheaper workshop or using cheaper materials - it's all very clever because by doing this the brands can ensure to offer the illusion of a deal on a classic but at the same time protect the real piece and permanent collection and attract new customers at a cheaper price point - all very clever indeed.

An established, desirable brand contains an emotional value that is difficult to replicate... no matter how well made your product is, in the eyes of Joe the consumer, he will generally fall into one of the following categories...

a) can't tell the difference right away
b) doesn't think your normal price point represents a product that it is of the same calibre
c) is brand conscious and wants to feel the emotion of being part of the virtual world the brand has created for itself
d) is incentivised by the knock down in prices
e) all of the above

Much of last week has been a focus on thinking about how to fight the dreaded January and in fact the effects of everyone else on sale. Three long meetings with all sorts of ideas tossed around, most of them out of reach or plain rubbish... but every so often we land on something.

As arrogant as it sounds, I do see us as the brand that will eventually fix retail... we will be the one to knock the giants off of their perch and by focussing on solving this problem we might get there faster. We might be sitting in wait with a lack of resources for now... but we are learning and thinking and I was very proud of the team last week as it is when you encounter problems such as this that you ultimately realise just how committed to the vision some people are. Some great ideas came out from team meetings last week and correct implementation and execution might see our turn our biggest weakness into a strength... 

I have decided to embrace the nerd within (or clearly apparent at this stage) so I will borrow my sign-off from the most famous Vulcan (a planet that appeals because there logic prevailed)... 

live long and prosper,

R