Jake Olson
PacSun, for the ones who don't know, is a Pacific Sunwear clothing brand based on Teen and urban clothing from the sunny side of California. Although this brand was founded in 1980, the brand has been an increasing sensation in the teen market so far, as their sales have been randomly improving, but for what reason? Most clothing brands like to do collaborations with another branding of clothes, to spice up the market for competition.
PacSun, since they have been around for a while, almost went out of business in the year of 2016 due to a small number of customers they would get per year. Most of the problems PacSun would run into would be their pricing. A lot of people were using the "Customer's objection" method whenever shopping at this local store, as the prices were way too high set and needed a price floor for their products. The customer objection definition was when customers and even other business were ripping on PacSun's overall prices being set too high for most customers. T-shirts had a low cap price of $30 each, while some of their outdoor wear of anoraks were reaching prices up to $80. This made the competition for other companies around mall areas of cities, to have a better advantage due to lower prices and better offers on their apparel.
When PacSun's company and officials realized that their products were being matched by other competitors, they wanted to try and find a new way to make their sales a surprise come up. By reaching out to other brands and clothing apparels, PacSun was able to start the collab project on their clothing. Kylie Jenner and Kanye West both were big idols around the teenage atmosphere during the time of 2016 and for a great idea, PacSun collaborations chose woman clothes to be sponsored by Kylie Jenner, and then a unique style of Kanye West for the men. The theme most unique about the collaboration was for young kids and adults to visualize a good interpretation of Kanye's style. The fit was very loose on the cuffs of all long sleeve shirts, and also varieties of cuts, and holes made into the ridges of shirts. Kanye believed that these styles brought out the texture of clothing, and simply made young teens want to go out and buy that certain product. Kanye was a very good persuader with his clothing brand at this point in time as well, to help PacSun raise their sales back up after a huge loss of 2016.
After a very long drought, PacSun's sales rose by nearly 30% of the beginning of 2017. They have continuously been thinking and adding new collabs to the store. For example, Guess jeans for the t-shirts, Travis Scott clothing, and the most affected brand to PacSun, Champion clothing which is a fan favorite by most.
This is a great example of inflation of prices due to a loss of business and customer satisfaction. I agree with your statement that a price floor should have been set for PacSun's products so that prices can't get uncontrollably high. This would result in a surplus of products since there is more supply but less demand. I have to give credit to PacSun and their ability to recover from an economic deficit. Most companies would sit around until they become bankrupt because they don't have creative ideas to boost their business. Luckily for PacSun, they caught their own mistake and reached out for help from famous celebs in attempt to save their business. It's crazy how people like Kanye West and Travis Scott can influence a population so much. This is similar to Adidas collaborating with Kanye West to create a new line of Yeezys for their brand. Many people buy Yeezys because they are iconic, comfortable, and limited in supply, and Adidas can sell them for a lot of money because there is a large demand. This is similar to PacSun's situation as they needed support from collaborations.
ReplyDeleteThe inflation of the pricing is what stands out to the dry and lack of business because when people put too high of a price people obviously won't want to buy it. Pacsun at least realized their high prices and knocked them down to a lower price, making the products more affordable and increase the demand on the clothing. Collaboration products with companies as big as this one, rakes in numerous amounts of money however they are also difficult to tail a price on it. With someone big and popular attached to the label, people believe that it should sell for hundreds of dollars which is driving away a main target audience in teens, seeing that most of the time teens hardly have any money (I know from experience).
ReplyDeleteThis is a very interesting article to me. I agree with many things that you said such as the price floors for PacSun. They struggled because of the loss of demand for their products due to competitors. It was a good move by the company to use celebrities to influence their customers now and in the future. It is crazy to me that these people like Kanye and Travis Scott have this much of an influence on teens. It also helps bringing in popular brands of course. I see an upward trend in the future for PacSun as they seem to be doing a lot better.
ReplyDeleteI think it’s interesting how they basically use other people just to help their company make sales. However, I wonder how much it costed them to get this deal and how much they need to give to Kanye and Kylie each year. I am curious to see how much this would affect the company in the start and how much it takes away from their income etc. Anyways, I think it is cool when companies will do collabs with individuals it’s very smart on their part because so many teens now a day say “I want to look like her,” and by buying her clothing line you can! Although, I can still tell you their prices are very high and sometimes can be too much for a simple shirt/sweatshirt.
ReplyDelete-Anika
PacSun is a great example of a company that could be very popular due to its trendy clothing. However, their prices prevent that from happening due to them being way too high for teens to be able to afford. After lowering their prices and collaborating with Kanye and Kylie it’s clear to see that they are going to do a lot better with their sales. You mentioned a 30% sales increase from 2016-2017 and that just proves that the price of their products needed to be lowered for the teens to want to start buying their clothes.
ReplyDeleteI never knew that the business was making such little sales to the point where they were going to go out of business. It is very common for businesses to go out of business due to high prices and other business beating them out with low prices on similar products. A price floor was definitively necessary so the prices wouldn't go super high and push customers away. That would have helped the business maintain sales in the first place. Although, PacSun did take a great approach to getting customers back. Working with celebrities and bringing their clothing into the store was a great idea. Some of the best trends come from famous celebrities. If other stores do although catch onto working with celebrity brand clothing, Pacsun could have to step up their game again to compete. If this were to happen the only way they could compete would be matching other stores pricing or lower their pricing to attract more customers which would put the company potentially at a loss.
ReplyDeleteAs someone who buys from PacSun, it's hard to imagine that such a now popular clothing store would have been on the verge of going out of business just a couple years ago. However, it does make sense that the higher pricepoints were making the cheaper competitors appeal more to consumers, as this continues to be the case for stores in a similar position. It was a wise business move on their part to combat this by standing out with brands that their competitors don't offer and collaborating with influential people to release new lines of clothing.
ReplyDeleteIv noticed lately as every time I walk into pacsun they have some new brand of clothing or a collab thats going on but I now know it was because they were losing money. I also think that pacsun should set a lower price floor because there prices are super high still and they would sell so much more things. Especially sense Pacsun is the home of skinny jeans and a lot of places like H&M sell the same jeans but for cheaper.
ReplyDeleteI think it was really smart of PacSun to boost sales by adding celebrity collaborations instead of lowering prices. While I’m sure customers would’ve loved having PacSun lower their prices, no seller wants to sell for a lower price, so them adding new clothes that people would want to buy, was genius. I think it worked too, because in my opinion, PacSun has been thriving.
ReplyDeleteThe only critique I would have to give for this is, you mentioned Pacsun also collabing with other clothing brands as well as famous sponsors but didn’t go into detail about it. Who were the other clothing brands? What was their deals/agreement? How did those help Pacsun? Other than that the article is spot on. Having a step-dad working within the Pacsun company I’ve always asked how it was going and during 2016 they were close to going out of business actually, closing multiple stores within the wisconsin region. The way they fixed it was with the sponsors and everything too but there was also more. They had noticed that it was all of the northern states that weren’t selling/buying as much product. While it was mainly their prices it was also just the fact that they are a california and warm weather clothing so in the states where they got snow and colder seasons people didn’t feel the need to be buying this type of fashion especially at the prices they were at. So while Pacsun’s prices almost brought them down it was also the type of product they were selling and it not having a high demand during the colder seasons.
ReplyDelete-Noah
Pacsun could have easily just marked all their prices down and been losing money but since they got and iconic start to promote them it got the image out to way more people increasing their sales. Their prices are till very high though, they should mark down their clothes a little bit so that it brings in an even bigger fan base for the clothes
ReplyDeleteThis is the perfect example of an outside force and consumer tastes impacting the sales of a product. PacSun did nothing different, they didn’t change their product at all, they simply paid for celebrities to spread the word about it. The only reason PacSun isn’t bankrupt is because they catered to teens by paying celebrities to endorse their products.
ReplyDeleteI found it interesting that PacSun almost went out of business in 2016 due to low sales, because today they are one of the most popular brands for kids our age. It was a very smart decision by the owners at the company to start doing collaborations with famous people that have big fan bases, such as Kylie and Travis. I wonder if this sudden boom in their business will start to level off as trends change within the next year or so, or will they keep up and continue to grow as a business?
ReplyDeleteThis really interested me because Pacsun during 2016 was very good example of inflation and it was kinda of cool to see a place that almost all teens shop go through a really bad trough and and come back and become very popular or trendy is awesome to witness.
ReplyDeleteAbout exactly a year ago, Pacsun was going bankrupt. They had no clothes in any stores and everything was on sale. Then all of a sudden they became much popular again. Do you know why this is? I haven't done research on it but I'm assuming it's because people liked the lower prices and that gained them a lot more money. Pacsun was falling apart for a while,but at some point during the first few months of 2018, their business sky rocketed again. Was this because of the collabs? Or was it because of the lower prices?
ReplyDeleteI think it’s really interesting just by adding some new collaborations with their clothing and making their style a little different, Pacsun was able to increase their sales by 30%. I think a lot of people wanted to see lower prices, as they were on the verge of going out of business, but adding celebrity collabs was really smart because they were able to keep a similar selling price but make it more trendy so that people would want to buy their clothes.
ReplyDeleteThis was an interesting piece because the evidence you shown during this was really good and smart. Also how they almost went out of business in 2016 and then became one of the most popular brands today. All because of collabs which if they would have done that earlier than maybe they would have never lost so much money.
ReplyDeleteThis was an interesting topic to read about as a person who has purchased clothes from there. I think it was very cool how you talked about the company nearly going out of business in 2016. Talking about brand collaboration and how it can make a business better was cool but I just wish you went into further depth on that topic.
ReplyDeleteI noticed this drastic increase in sales at Pacsun as well. I think that the main reason for this was, as you said, that their prices were way too high for the quality of their products in 2016. And with them lowering some of their prices in 2018 as well as creating new products endorsed by celebrities, it drove the demand for Pacsun's products up. Now basically everyone in high school owns something from Pacsun and the rave about the brand is continuing as new products are always being made.
ReplyDeleteThis marketing strategy of teaming up with competition rather than working against or around it was the greatest thing that ever happened to the brand. Although they weren't pioneers in this topic, they utilized it very efficiently and sales skyrocketed. I guarantee a very high percentage of teens, even at our school for example, owns an item from the store. But another thing that I believe helped with sales was the new "hype-beast" wave of preferring premium brands that are more expansive, and I bet pacsun was thankful to have collaborated with those brands.
ReplyDeleteIv noticed that every time I walk into pacsun they have some new brand of clothing or style they are promotion, I thought this was and interesting idea to keep the merchandise fresh. I also think that pacsun should set a lower prices on their clothing because everything is so expensive, they would end up selling more if the prices got lowered. Especially sense Pacsun is known for their skinny jeans and a lot of places like H&M sell the same jeans but for a lower price.
ReplyDeleteI do agree that Pacsun did have very high prices, that caused sales to drop, but I also feel that they still have outrageously high prices on their cloths today. Although everyone notices that they are getting a lot of celebrity endorsements to raise sales. The endorsements are only hitting a certain amount of people that care and have a high willingness to pay. For me I think that they have a long road ahead of them, when it comes to correctly pricing clothing. But they do a good job at hitting the target market of high school students, because basically every girl and guy in our school owns a piece of clothing from there.
ReplyDeleteI love shopping there and I feel that them selling Kendall and Kylie is a big strategy of theirs to have more costumers due to celebrity endorsements. Although they have high prices I feel like the costumers like their products enough to continue to come back. Teaming up instead of trying to beat their competitors is a great strategy and helped them become well known and so successful.
ReplyDeleteConsidering Pacsun's target audience are teens, it doesn't make sense that they charge a lot of money for simple clothes. Given that teens typically make less money than adults, products that are marketed towards teens tend to be less expensive. So it would make sense that the demand for Pacsun's clothing fell as their prices rose. However, collaborating with icons such as Kylee Jenner and and Kanye West brings in a lot of money from dedicated fans of theirs.
ReplyDeleteI like how you assessed a brand that is very popular, especially in our age group, and identified both their strengths and weaknesses. I also see how inflation affected PacSun and how substitution was initially their downfall. At one point you mentioned that they needed a "price floor" but I believe you may have meant a "price ceiling" as a price floor is the price at which a company cannot go any lower but a price ceiling is where the price cannot go any higher than a certain point. All in all, we can see that promotion eventually brought their brand back up as they created value for their customers.
ReplyDeleteI think it was great to write about a brand that many of us shop at. I agree that one of the largest reasons that they almost went out of business were their prices. Many high scholars do not have the money to spend more than $30 on a t-shirt. Many people would not spend that much on a normal t-shirt, but when they began to work with popular celebrities, such as Kylie Jenner, this causes many teenagers to want to buy the product, because of the name attached. Now, I think they will probably be okay, and not go out of business, but they should continue to do brand deals, so they can stay relevant.
ReplyDeletePersonally I do think that their prices are expensive. Sometimes I shop in this store and won't buy a shirt I like because I feel like I can find it at other stores for cheaper. But since they did promote with Kylie Jenner and Kanye West, they did become more popular and it brought a lot more attention to the store. They will continue to make profit when popular celebrities are endorsing them.
ReplyDeleteClothing stores are a prime example of monoplistic competitive market. This allows stores like Pacsun to chose the prices they want within reason due to the differentiated products. PacSun is a teen tailored retail store and because of that, they were facing loss. Teenagers have a lower budget than adults and therefor the prices were affecting their profits. The advertising of Kanye West and Kylie Jenner will increase their profit because they are such prominent icons in our society.
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