In August, the store announced their decision to make the leap across the pond. King of Prussia is only the second US location for Primark, with the first opening in Boston this past September. In addition, they plan to open seven more locations throughout the Northeast over the next two years.
Disclaimer: I'm slightly biased on this subject. I studied abroad in Ireland during college and for a broke twenty-something living out of a suitcase for a semester, Primark was my saving grace. Needless to say, I was ecstatic when I heard that they were starting to open stores near me.
As a department store, Primark will be competing with the likes of Macys and JCPenney, while as a fast-fashion retailer they will compete with the H&M's and Forever21's of the world. So how does Primark plan to compete against these retail giants? By leveraging their low cost, fast-fashion business model.
Being a fast-fashion retailer, they do not follow the standard four seasons that other retailers do. Primark changes their inventory every few weeks, ensuring that their clothes are always in line with the latest trends in the fashion world. However, it's more than always having the latest fashion on their shelves, Primark sells these items for cheap. CNN Money estimates that the average piece of clothing at Primark costs $6!
But how does Primark manage to keep their prices so low? According to their website, they applaud their lack of advertising, inventory planning/management, and efficient production for their ability to keep their merchandise affordable.
Unlike many US clothing retailers, Primark does not do a lot of advertising - claiming they only advertise when they open a new store. Instead, the retailer chooses to use their social media followers and word of mouth to promote their business. They encourage their customers to share their experiences on social media, using specific hashtags or tagging the stores page/account, to promote their brand. By leveraging social media buzz to market their stores, they are able to save on advertising costs.
Primark places large orders with their suppliers and orders are far in advance of when clothes will be in demand to allow for better planning by their suppliers. Also, they design their products so that materials can be sourced locally by manufacturers. Each of these factors helps Primark during the negotiation process when purchasing their clothes from suppliers. The large order sizes open the doors for volume discounts with suppliers, as opposed to multiple small orders throughout the year. Similarly, they give their suppliers sufficient time to fulfill orders, allowing for better planning and buying, which reduces the manufacturing costs. Finally, by ensuring that materials are readily available in the regions where clothes are manufactured, Primark avoids unnecessary transportation and logistics expenses that could drive up the materials costs.
Whether or not the US will catch "Primania" is yet to be seen, but it should be interesting to see what impact this newcomer may have on the US retail market. Regardless, I know where I will be doing my holiday shopping this season.
Image courtesy of primark.com
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