What are “Abercrombie & Fitch” playing at?
Sunday, April 29th, 2007This post is Internet-marketing based… but with a twist.
“Abercrombie & Fitch”, the US retailer, opened a store in London recently. Apparently, they are pricing their goods in their UK store at “pound for dollar”… which means an item in their London store would cost £50, but in their US stores the same item would cost $50. Here’s the story, from the Telegraph.
Now I’m not a financial genius, but I know that an exchange rate of $2 to £1 means that the UK prices should be half the US prices.
By setting the actual amounts the same, regardless of currency, the British are actually paying twice as much as the Americans for the same goods.
It seems that Abercrombie & Fitch are aware of the issue. Their reponse? To block people from Britain accessing their USA website. Clicking on Abercrombie.com takes me to uk.abercrombie.com.
Nice.
(of course, you could always use a proxy server to see the site, if you were really interested)
So, is blocking site access by IP-address or geo-location to support differential pricing a valid Internet marketing method? What do you think?
According to the Telegraph story…
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Mike Kramer, Abercrombie & Fitch’s CFO, said that the London pricing followed careful scrutiny of the UK market.
“We did a lot of research looking at other brands in London and how they are priced, and we want to price our brand accordingly. We are an aspirational brand, and want to price ourselves as such,” he said.
Kramer added that prices are “continually” under review.
He said that the decision to block UK consumers from the company’s US website was a deliberate tactic “because the pricing is different”.
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Hmmm. I’m not sure I’m buying that.
Literally.
Wow. Did laptops crash in price, or is it just my perception?