Image Credit: Emms Benitez
As product managers, we all want to be responsible for products that our customers really, really want. That’s why being a lingerie product manager sounds like a very good job. You make a product that has the ability to transform your customer and because of that they will seek you out. However, lately, changes in how lingerie is made is starting to have a negative impact on the bottom line of this product. No matter how magical they may be, if they cost too much nobody will buy them. What is a product manager to do?
The Cost Of Lingerie
Product managers had sold the Natalia Underwire Bra for $68 at department stores and specialty boutiques since it was introduced in 2016. However, this year, the maker of the bra, the lingerie company Journelle, raised the price to $98. The result of this significant price boost was that some retailers stopped carrying it. The reason that they stopped was because they knew they wouldn’t be able to sell it at the higher price. The Journelle product managers had to push through the price increase anyway to offset rising costs, which in some cases have doubled since 2019.
I think that we all realize that when it comes to our products, price hikes aren’t arbitrary. They are deliberate decisions by product managers as they contend with a complicated set of factors. In the world of lingerie there are an unusually large number of inflationary forces that are converging on bras. In the case of the bra that is made by Journelle’s, the product can have as many as 27 components. We need to understand that the Natalia bra may be an extreme case; however, it shows the stress manufacturers are facing as they navigate rising costs rippling through their global supply chain. Inflation has recently hit a four-decade high, although some economists said there are starting to be signs that the price increases are starting to peak. Once these higher prices get baked into products, they can be hard to reverse. Product managers have to realize that many price increases may be here to stay.
Product managers need to understand that things change. Some lingerie brands were able to benefit from the shift to more comfortable bras during the pandemic. In the world of lingerie, wirefree and bralettes have fewer components so they are less expensive to make. Product managers discovered that as more women left the house for both work and social events, they started to gravitate to more structured styles. Product managers at another lingerie maker, Lively, raised their price of its bras to $45 from $35 a year ago. This was the first increase since the company was founded. Product managers at Victoria’s Secret have said that $110 million of supply-chain costs have weighed on their profits in the holiday quarter. The product managers have raised prices on some items.
Dealing With Price Increases
Product managers need to understand that the reality is that the whole world is facing the same pressures on inflation, in raw materials, in transport, in people, in freight. The surge in costs for the lingerie industry comes as bra sales have rebounded from the depths of the pandemic, when many women stopped wearing the undergarments while sheltering at home. Bra sales totaled US$10.2 billion in 2021, a 36% increase over 2020. The average price for an underwire bra is currently $17. This is up 13% compared with a year ago. The increase is broadly similar to inflation that has occurred in other types of women’s apparel.
An important point that product managers have to be aware of is that the rising price of bras might be less noticeable to shoppers than items they purchase regularly like groceries or gas. Lingerie customers often feel as though they are going to pay whatever they have to pay to get one that is comfortable. In part because of that mentality, the product managers at Journelle are not expecting a big drop in sales of the Natalia product. The Journelle product managers didn’t want to sacrifice Natalia’s quality because of the rising price. This product has only 16 components and no molded cups and it is made almost entirely of lace.
To offset some of their pricing pressures, the product managers at Journelle are changing the way that they do business. They have pulled out of Asia and now source most bra components from Europe. Molded cups come from Tunisian factories. Italy provides the metal rings, wires and boning. Even though production in Europe can be more expensive than in Asia, the Journelle product managers believe that they are saving money by reducing shipping costs, which have also skyrocketed. The product managers realize that they can control energy costs more than they can control shipping costs.
What All Of This Means For You
The goal of any product manager is to create products that our customers will want to buy. In order to make this happen, we have to be sure to price our products in a way that they are affordable for our customers and they make a profit for our company. In the lingerie business, they are currently experiencing a sharp rise in the cost of getting their products into stores. The result of this is that they are having to raise the cost of their product. How should product managers handle a situation like this?
The lingerie product managers at Journelle have had to make a significant price increase in their product because of rising costs. The result of this price boost was that a number of the channels for their product have said that they will no longer carry it. Product managers realize that rising costs are rippling through their global supply chain. Once a product’s price goes up, it can be very hard to lower it over time. The pandemic caused women to change the types of lingerie that they were buying. The whole world is facing the same pressures on inflation, in raw materials, in transport, in people, in freight. The cost of bras is going up just as the demand for this product is also going up. Lingerie may be a special product: customers may not notice the price increase as much as they search for the perfect product. Lingerie product managers are shifting production to Europe from Asia in order to reduce their shipping costs.
The good news for lingerie product managers is that they are responsible for a product that their customers want. They need to be careful with their price because if it goes up too much, they can have a variety of channels start to refuse to sell their product. However, changes in the world cause product managers to have to make changes to their prices. If they can do this carefully, they may be able to cover their costs and keep their customers.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: Do you think product managers should tell customers why prices are going up>
Click here to get automatic updates when
The Accidental Product Manager Blog is updated.P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!
What We’ll Be Talking About Next Time
If you are like most people, you have started to get used to being able to log on to your computer and order up just about anything. What’s even better, is that what you have ordered seems to show up very quickly. What a lot of us don’t spend much time thinking about is where all of this stuff is coming from. Sure, we’ve all see those pictures of the immense Amazon warehouses where books, TVs, and shoes are quickly picked and packed. However, what about ice cream? For that matter what about milk? There are certain items that we like to order that have to stay cold or even frozen before we buy them. Where do they get stored?