November 18, 2013

Everlane - Transparent Pricing And Lean Inventory Levels

Have you heard of Everlane? (courtesy of @dannysauter):

You'd almost think you were looking at the rebirth of Lands' End, two generations removed.

Now, let's be honest. They may not make it. There's that dilly of a $30,000,000 pickle (annual net sales) that seems to be a real hurdle that is tough to get over.

Even more interesting than transparent pricing is the inventory strategy ... always buying "too little" inventory to satisfy demand. I remember seeing this type of model when I worked at Nordstrom - once you've been burned by liquidations, you don't ever want to have too much of anything. So if you can get 80% of what a customer wants, or 70%, then yes, you're going to disappoint a lot of customers, but you're also going to create urgency.

Urgency at full price.

Too many businesses create urgency by having short-term promotions (40% off on Cyber Monday only).

You can create urgency by telling your customers to get it now, before it is gone ... and do that at full price.

We'll see how this works.

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