Coach has been on a real tear lately. From a stodgy brand that I used to buy in the bow-tie, Annie Hall 80’s, they have reinvented the brand, making it a must-have for the fashion conscious. But I recently ran across a story that highlights just how smart they’ve been.Turns out that Coach not only knows how to appeal to the fashionistas in its City locations, but is also making a killing at the factory outlet. Cleverly, though, it manages the brand to avoid any confusion — the outlet stores handle only older merchandise or stuff that is made specifically for them. They are located at least 60 miles away from the regular stores. And the buyers, while still loyal to the brand, are looking for different things. The latest and trendiest in the regular stores, good value and design in the outlet stores. And here’s the piece of data that blew me away – while full price shoppers spend an average of $1,100 on Coach items, the discount shoppers still spend a whopping $770 a year (according to Business Week Nov 7 2005 p. 60).
The lesson: Smart segmentatation can pay off.
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