Studies conducted by J.D. Power and Associates, mentioned in Marketing Daily, show that overall customer satisfaction with the wireless retail sales experiences has steadily decreased since 2006 and has reached its lowest level since 2005. Power’s measured overall customer satisfaction based on four factors: sales staff, store display, store facility, and price/promotion. Approximately 51% of those surveyed said sales staff was the most important factor of overall customer satisfaction. Those surveyed felt that sales associates did not posses enough knowledge about the products being offered.

With highly technical products, customers look to sales associates for guidance and recommendations therefore it is extremely important in the wireless retail industry for sales associates to stay up to date with product offerings.

Ann Taylor, J. Crew, and Gap are introducing luxury items to boost their profits. Banana Republic is launching a new upscale line called BR Monogram while J. Crew will start to offer limited-edition products such as a $3,000 jacket. How risky are these new upscale collections?

Losing Loyal Customers

These retailers run the risk of losing current loyal customers. Loyal customers might feel that they cannot relate to this “upscale” image and will have no desire to purchase upscale items. Loyal customers could be turned off by this move and might altogether stop shopping at the retail store.

Difficulty Gaining New Customers

Retailers also run the risk of not gaining any new customers. For customers with higher price points, they have other high end retail store options.

Slow Economy
The third risk for these three major retailers is launching new lines during an economic downturn. Monthly same-store sales for March have been the worst in 13 years. Many retailers are struggling to turn a profit with their main businesses. Ann Taylor, J. Crew, and Gap will not only have to focus on their main businesses but they will have to allocate extra resources such as marketing dollars to make sure their new lines have a shot at success.

The Upside

The luxury tier of fashion has been outperforming midpriced retailers for the last several years. Perhaps now is truly the best time to launch an upscale line.