24 - All the Answers

I worked in retail for three years and I’ve been in wholesale for an additional eleven, and I’ve never worked for the guy selling the least expensive product. So when Kerry Mitchell, president of Addition-Elle and Penningtons, and I spoke, and she detailed the reasons why AE and Penningtons are not the guardians of the lowest price point, most of it wasn’t anything that I haven’t had to explain to my own customers before: “We don’t have the volume to be at the same price as the next guy; we offer services, that cost money, that won‘t be offered by the other guy; the specifications of my product are better than the one to which you’re comparing it--you have to compare apples to apples.” And on it goes. In much the same way, there were five major reasons that Mitchell outlined in her explanation for the pricing at AE and Penningtons. The first, was volume.

Despite the “growing epidemic of obesity” that will have us all dead by the end of next week, the plus size market in Canada, is still significantly smaller than the regular size one. In March of 2008, market research firm NPD Group, found that there had been significant growth in the women’s plus market in Canada, with one in five female shoppers purchasing in plus. However; that’s still only 20% of the market and NPD’s definition of plus starts at size 14. When I spoke with Mitchell, she defined plus as truly beginning at size 18. Both measures are true, but there is a compelling logic to Mitchell’s grouping, in that most women wearing 14/16 can shop at a wider variety of stores. They may not be able to shop at every regular size store out there, but they have a significantly greater number of choices than I do at a size 18/20.

The sheer dearth of plus retailers in Canada bears this out. The same report by NPD indicated that fully 57% of plus sales were done by the top ten retailers in the field. Unlike the US, where up to half of female consumers are size 14+, Canadian women are apparently still hitting the gym, eating right and smoking like chimney stacks to stay slim. With fewer customers to service and less product to purchase, pricing increases accordingly.

This made sense to me, but I still wanted to know why it was that Reitmans could offer such significantly lower prices than Addition-Elle to plus customers. Here I’ll remind you of that t-shirt that costs me $9.99 at Reitmans vs. $16.99 at Addition-Elle. To answer this question, Mitchell explained the second reason for the price discrepancies: the corporate structure of Reitmans Canada Ltd.

From where I’m standing, it seems perfectly logical to combine the purchasing power of AE, Penningtons and the Reitman’s Encore (plus) line, so as to lower costs across the board. Apparently, they don’t agree. Apart from maintaining the same corporate address, there is little else shared by AE/Penningtons and Reitmans; they are run as entirely separate entities, and thus purchasing volume is not shared. In effect, the much higher market penetration of Reitmans (at about twice the stores than either AE or Penningtons) can’t be utilized to lower purchasing costs for AE and Penningtons over all.

The next two reasons are fairly uncomplicated: amount and quality of fabric. While it’s clear to me that my size-18 garment is not significantly larger than a size 13/14 garment, I failed to take into account that a size-26 garment is larger. More fabric costs more money. As for quality, sometimes a price difference is reflective of a difference in quality.

Sometimes, however, a t-shirt is just a t-shirt, and in those cases, the grounds for the difference in price point might be about reason number five: branding. In large part, the different divisions of Reitmans Canada are run separately because their intended audiences differ. The marketing and branding diverges significantly because the customer differs. While AE and Penningtons are under the same division umbrella, even those stores are branded differently. As with all Penningtons stores, the one closest to where I live carries the MXM line (a trendier line of clothing), but most of the store caters to women 10-15 years my senior. The AE stores, on the other hand are going after a 35-40 year old woman.

Apart from demographic, there is also the concept of brand image and what the company is trying to convey—and if there’s one thing that the Addition-Elle brand is not trying to convey, it’s being the store with the lowest price. Believe me, I understand not trying to win the race to the bottom of pricing ladder; Wal-Mart will always be around for that. I just don’t know that I’m buying the image that Addition-Elle is selling. At first I thought this was just an issue of ineffective marketing, but I’ve come to believe that, even apart from my age, I’m not their intended customer.

I shop at AE for three reasons: I am a plus size, I like to dress reasonably well, and I like to have options. What is not included in these reasons is loyalty to the AE brand. When I think about shopping there, I know that the entire store is devoted to plus sizes, affording me options, and on a good day I’ll find a couple items that work for me. But I feel like the price point has always caused me to have a really ambivalent relationship with the brand and I suspect that a lot of younger women, who are not as financially secure as the intended demographic, might feel the same way. I still do as much shopping as I can in Reitmans Encore and I can honestly say that I feel a level of loyalty to the Reitmans brand.

I wondered aloud to Mitchell, during our conversation if, given the presence of younger customers who shop at AE out of necessity and lack of other options, that brand isn’t perhaps a bit narrow in its focus. I now wonder if it might be worth it to draw these younger shoppers in with slightly lower price points in order to garner a loyal customer, potentially for life. Kind of like all of us to whom McDonald’s was marketed when we were children. The food isn’t good—we’re just loyal.

And when I say lower the price points, I don’t mean slash and burn. I’m saying bring the $49.99 hoodie down to $39.99 and it brings it out of the realm of “too expensive for the brand” and into the realm of completely reasonable. Obviously the bottom line is profit, but I think, with a customer who shops in a store out of necessity rather than choice, it’s important to make the customer feel like they aren’t just being charged what the market will grudgingly bear; because if she can escape shopping there, she will. Having said all this, I don’t know how much weight each of the factors Mitchell outlined bring to bear on pricing, so I don’t know if there’s wiggle room at all**. I simply believe it‘s worth it for the marketing team behind the scenes to explore what drives customers like me to AE and Penningtons.

A few days after I wrote my initial letter, I was shopping at Addition-Elle and a girl in her early 20s was at the counter. She decided against buying some t-shirts that she couldn’t afford after experiencing a moment of sticker shock. The sales rep at the cash urged the young woman to buy the t-shirts anyway, but the rep’s urging lacked zeal. I suspect she saw in that customer a mirror image of herself, without the benefit of an employee discount.

**In rebuttal, Ms. Mitchell indicated that AE has lowered its prices in recent years and offers frequent generous promotions and sale pricing, but that due to the other factors mentioned earlier, the wiggle room is very limited.

22 - Opening Salvo

First, a wee business lesson. If you didn’t already know this, Reitmans Canada is the big daddy of a corporation that owns the following stores: Reitmans, Smart Set, RW & Co., Penningtons, Addition-Elle, Cassis and Thyme Maternity. If you ever felt like the shirt you saw at Reitmans looked exactly the same as the one you saw at Smart Set, it’s probably because it was the same shirt.

Anyhoo, I’ve long simmered and seethed over the pricing of plus size clothing for women, but when I realized that the same corporation that can offer me at shirt at one store for $9.99 is happy to try and offer me pretty much the same shirt at another store for $16.99, I started to get kinda pissy. So I decided to write a letter. I know it’s just going into some massive in-box that’s being sorted by a lackey at Reitmans Canada, but this is just an opening salvo. I intend to keep picking away at this one, in Roger & Me fashion, until I get someone to explain why plus size customers are being treated as the profit centre for the company.

I have my thoughts on the matter. Regular size retail is a hell of a lot more competitive in Canada than plus size retail, so it becomes a matter of what the market will bear. With competition like Old Navy, H&M, the far less classy than it was when I was a kid Fairweather, Stitches and numerous others, just five feet away in the mall, Reitmans and Smart Set have to be at rock bottom to get a share of the market. One of the last bastions of plus size basics, Cotton Ginny, has closed three stores in Toronto in the past few months and seems like it might be on the way out. With competition like that, Addition-Elle and Penningtons barely have to compete at all. And a captive audience has made it clear to the company that they are willing to pay their crazy prices in order to, you know, not go about nekkid in the streets.

So I’ve written a letter to Kerry Mitchell, the president of Addition-Elle and Penningtons (see letter below). And I’ll keep you posted on what transpires.

Ms. Mitchell,

I'm a customer from Toronto, Ontario and I'm writing because I continue to be dismayed by the difference in price point on your plus size clothing sold through Reitmans vs Addition-Elle and Penningtons. I'm also concerned about the overall difference in pricing between regular and plus size divisions at Reitmans Canada.

Obviously, I'm a plus sized customer, and so realistically, there are not a lot of stylish chain stores for me to shop in at the moment. I've never understood the dearth of options for plus size women in Canada, but that's another issue entirely. Of Reitmans Canada-owned stores, I prefer to shop at Reitmans because the price point is very reasonable. However, even in some of the biggest locations in this city (for example, Dufferin Mall) there are maybe a total of 20 wall and floor racks dedicated to plus sizes (including plus petites and tall) with probably close to 100 wall and floor racks dedicated to regular sizes. So if I want variety I end up at Penningtons or Addition-Elle. And that's when things get whacky.

Astonishingly, the price of just about everything literally *doubles* when I enter those stores. Presently a v-neck T in regular sizes at Reitmans retails for $7.99; in plus sizes for $9.99. At Addition-Elle, that price jumps up to a whopping $16.99 on sale—regular $22.99. Is it literally taking twice the fabric overall to produce plus size clothing? I have a hard time believing that. It starts to feel like we plus size shoppers are your corporation's cash cows—no pun intended.

At this point, because I'm determined to enjoy shopping again, I'm back on a weight loss plan, but Reitmans Canada might not be the recipient of my business when I get back into regular sizes. Right now I'm a captive audience and I feel absolutely treated like one.

Looking at three of the regular size clothing stores on your roster, Reitmans, Smart Set and RW & Co., the prices at all those stores are reasonable. Any woman seeking great style at great value would be able to shop at those places. On the other hand I know plenty of plus sized women on a budget who just can't afford to shop at Addition-Elle and Penningtons. I couldn't always afford it. Why is this difference in pricing so pronounced? It's certainly not a difference in quality. Items I've purchased at Addition-Elle or Penningtons don't last any longer than the ones that I buy at Reitmans.

I realize you only head up Addition-Elle and Pennington's and aren't responsible for the pricing at all of Reitmans Canada's divisions, but I'd like to at least begin to understand the rationale around the pricing from someone intimately involved in the plus size division. I would be so grateful for a reasonable explanation. Plus size women have enough discrimination to contend with in an average day—it would be nice to feel like the clothing stores we support were supporting us in return.

Looking forward to your response,

Heavy Me