Owning your luxury lifestyle brand isn’t just about designing the products and seeing them go to shelf..
In this video Rebecca and Uri Minkoff tell us of the effect the recession had on their growing business and how reducing the price of their handbags actually earned them a higher profit in the long run.
In 2005, Rebecca designed her first (and now bestselling) handbag, which she soon dubbed the “Morning After Bag,” a.k.a. the “M.A.B.”
She told The Wallstreet Journal: “I was sewing apparel. And then [actress] Jenna Elfman asked if I could design a bag for a film she was going to do. I came out with the Morning After bag.”
They told WSJ between the ages of 20 and 30, there are a lot of important experiences that a girl will go through… large moments in her life. This is how they were inspired to then go on to create products that related to the experience—the Lovers Clutch, the Affair, the Swoon, the Luscious, the Devote Tote.
By early 2007, social media really started to take, people started to talk a lot about Rebecca and the brand. This was the moment they decided to create a relationship with the end customer, directing them to the store, the website, or to an event Rebecca was going to have.
But by the 2008 recession luxury bags were being discounted to $795. So they lowered their prices by about 15% to 20%. Uri Minkoff told WSJ: “We took the Wrigley’s model: We’re going to take this price hit … but we’re going to sell more.”
Instead of just having products at $495, $595, they started offering products from $195 to $595. They actually grew a whopping 546% through the recession by doing this!
They may be a global success today, but things haven’t always gone smoothly – their biggest blunder being working with a factory that took another brand’s logo and put it on their product. Luckily they caught it very quickly, but some products came out with a hugely successful brand’s logo on. Oops.
So, if you’re ever thinking of starting up your own brand – remember to take advantage of all social media platforms, be in the mind of the customers and be careful of any manufacturing mishaps!
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