Published on September 16, 2010 Lessons you can learn from Ed Hardy
This week, celebrity clothing retailler Ed Hardy was put into administration in Australia. Known for it’s tattoo inspired designs, and well adorned by celebrities what went wrong? What can you learn as a business about the problems that Ed Hardy faced in Australia?
The company itself cited intense competition as the main reason that their Australian business moved to administration, but if you read the comments that people have placed on the story as published on news websites one thing becomes clear: the company’s pricing strategy in Australia had a lot to be desired.
Here is the sentiment of a few of the comments:
- The designs that I like I can import from overseas for a fraction of the cost
- The prices of garments were out of proportion with the company’s garments in their overseas stores
- Everything was overpriced in the stores – even the water bottles!
While it’s a legitimate pricing strategy to price products with a premium strategy relative to the item’s actual cost of production, a premium strategy must always be within reason. And it should ALWAYS consider the views of the customers who it is targeted at. As a business you shouldn’t only consider your local competition – customers are savvy and if your prices are out of proportion with the same or similar garments on international websites, then they will just import the products directly themselves.
There may have been a big issue with their product styles – with many people reacting negatively to the loud designs both in Australia and overseas but in our opinion where Ed Hardy went really wrong is that they should have considered what people were saying about them! Listened to their customers, and thought about where their competition was really coming from. Surely they realised what customers were saying about them? Surely they realised that people could import the same items into Australia for cheaper than they could buy them in their stores!
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