Can customer value pricing strategy save Strandbag from losing its customers? Most retail businesses nowadays are transitioning to the digital world to stay relevant. They consider digital marketing as the next evolution in business. But not with Strandbags.

Strandbags is in the travel luggage and fashion bag business. Founded in Australia in 1927, the retail store has become a hugely successful business and a household name across the country. But despite its successes, Strandbags had become acutely aware that its once successful brand strategy and visual language is now losing its current relevance. It needs to re-invent itself and take it to a younger, global audience, without driving away its current loyal customer base.


Strandbags had become acutely aware that its once successful brand strategy and visual language is now losing its current relevance.


Fighting to hold on 


It is currently surviving on a quagmire of discounts, percentages, numbers, stacks of product and ubiquitous discount messaging which is diminishing the shopping experience and quality impression of its products. The true images of its brand, the genuinely good-quality products, the astonishing breadth, diversity and relevance are losing out to its competitors.


With global luxury retailers, many retailers have been able to remain solvent due to strong demand from Chinese tourists. However, the situation is changing with many retailers like Strandbags losing out to online retailers with a good online product and pricing offer. 


The retail market is changing quickly. Online shopping is taking over from brick-and-mortar stores. Especially retail businesses that are facing insolvency and/or being forced to reduce their physical presence and stock to cut costs and CAPEX. A good online value pricing strategy is key to survival for many of the traditional brick and mortar stores that are trying to transition their business to online. 


A well crafted multi-channel customer value pricing strategy is key to survival for many of the traditional brick and mortar stores




More Display Room


So the strategy of Strandbags is to commit more to its physical stores and expand more display space. The recent closing of other retailers in Australia has actually been a blessing for Strandbags. The real estate leases have become a bit more affordable for the company and they are now able to acquire the store spaces they want. The new store footprint strategy will be rolled out over the next three to five years, which they believe will give them the edge over online retailers.


Strandbags are attempting to buck the traditional retail trend to remain relevant to the next generation of consumers. With the luggage sector showing an annual growth of 5%. They are ceding control of the shopping experience to the shoppers. They have listened to their customers’ feedback and learned that customers don’t like to cluttered stores filled with stock and sale signs. 


What customers really want is a clear brand story and value. So, instead of the typical cost-based pricing, it’s used in the past, Strandbags is now trialling a hybrid everyday value pricing strategy. A value-based strategy set up to entice their customers (old and new) to see their latest fashionable luggage and bags.

Value pricing strategy examples include a painting is usually priced on its perceived value or when a book on a specialized field is priced high due to its market niche.


What customers really want is a clear brand story and value.


Much of the refreshed brand, both visually and technologically is from the feedback they’ve received from their customers. The customers are savvy enough to know more about the brand by looking it up on the web. They researched online even before entering the store and visualised what they want when they want it, and how they want it.


By becoming a digital mecca, the store features handheld checkouts for staff to help customers transact then and there, rather than putting them in a line. Video screens line the walls and showcase the brand to the customers wandering in, while the store itself fulfils e-commerce orders, allowing customers to interact with Strandbags as they please.


Strandbags Uses Customer Value Pricing Strategy To Make Its Comeback



The Digital Challenge for Customer Value Pricing Strategy


Now the urgency is for the brick-and-mortar stores to entice the time-poor, bargain-hungry customers to buy in their store rather than from their online competitors. What’s more, they need to differentiate themselves from the online stores in regards to the quality and price of their products.


Product quality and price is a blur to retail customers. No meaning or resonance. 


Retailers now want to create an in-store experience that cannot be recreated online. They also need to offer original offers and services to customers that online retailers cannot provide.


Three strategies to entice customers back to stores


1.Loyalty Programs


This strategy has been around for a long time, but it was revived again due to online competitions.


Big stores like Strandbags have loyalty program cards that can earn you credits towards your shopping with them, as well as other in-store benefits like complimentary gift wrapping or special events.


Loyalty programs are not only gaining popularity, but they are also becoming more tightly integrated with the supporting brand and shopping experience, offering consumers a seamless experience across point of sale, the Internet, phone and mobile channels.


The biggest challenge for retailers is to boost sales while also giving customers something different from the norm.


Strandbags’ approach to loyalty is not too shabby, as you get a 5 dollar voucher for every 50 dollars that you spend. The problem though is that this is over a half-annual period and I am pretty sure that you are unable to check your progress on their website. This would seem to be an issue due to their specialty, which are bags, wallets and luggage. So unless you are trying to keep up with the Kardashians on the trendiest handbags and leather goods, you would be hard-pressed to earn sizeable vouchers.





2.New Stores in line for Customer Value Pricing Strategy


The introduction of a ‘new look’ and bigger space has been well received by their customers. The change in-store layout has also indicated that people are still willing to flock to their stores to try their products – especially when it is something new to the region but established elsewhere.


Novelty is alluring to customers – both in terms of pricing and product – but price complexity and messy stores are not. 


As these big name brands continue to expand, the influx of people often translate to other stores in the area. When Strandbag stores get busier, other stores near them have a chance to get more business. Boosting the industry as a whole. Whether or not other retailers are cashing in on this trend, however, is still in question.


Currently, Strandbags is planning to expand — both their product range and in the geographical sense. The lightweight range of luggage bags is set to be released early next year.  To compete on different levels against heritage brands.


Plans to set up shops in cities across Asia are in the planning stage. Starting in Singapore which would be the ideal entry point to the global market.


3.VIP Events


Whether it is a seasonal launch party, a special sale or an opportunity to debut a producer; VIP and special events are growing in popularity with a range of retailers.


As a VIP customer, you’ll receive special e-news update with special offers and style tips. Enjoying the benefits, during Christmas and every day of the year.


For example, Westfield shopping centres regularly run events and competitions to engage with shoppers; often working with specific retailers to promote different activities. The response to these kinds of events is fairly positive. Suggesting it really is a way for traditional retailers to get an edge over their online counterparts.  And give customers a much more interesting experience.


While many people associate online shopping with savings and convenience. Traditional retailers can still provide a range of benefits for shoppers.  More of the success stories told by physical stores are tied up in strategies like the four above. Suggesting it is differences in experience that will lead to a balance between stores and screens.




  • Using value-based pricing is a better alternative to cost-based pricing.  It reminds customers about what they really want when they buy from you. 


  • People don’t just want stuff, they really want real experiences too even if they don’t realise it. People need frequent reminders of this important human need to live in the real world. To jerk them out of the lazy, online world they have grown up in.


  • Strandbags are attracting foreign buyers especially the Chinese. It will be an advantage for them to sell their products online for future customers. 




  • Strandbags is actively looking to grow its brick-and-mortar presence, with the possible launch of large-scale mega-stores down the track. Many shoppers still prefer to shop in a physical store than going online. But only if the pricing and store experience is right. 


  • Much of the brand’s refresh – both visually and technologically – is giving control of the shopping experience to the customers.


  • Strandbags is expanding globally but it should reconsider going digital in countries; like China where the tradition for online shopping is strong. 





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