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The J.Crew lesson: How brand loyalty becomes brand letdown Add to ...

Lisa Wong was giddy when she learned that Anthropologie, one of her favourite U.S. apparel retailers, was setting up shop in her hometown of Vancouver.

The 26-year-old technical writer and fashion blogger had been introduced to the brand, known for its unique, feminine separates, during shopping trips to New York, Seattle and Portland, Ore.

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“That was always a must-stop for me whenever I went to any American city. I’d go on the website and use the store locator and look up where the nearest one was. Whoever I was with, I’d be like, ‘Okay, we have to go there.’ ”

She preferred buying clothes from them, as well as U.S.-based Forever 21 and Sweden’s H&M, rather than Canadian chains because “they seem to do better with keeping up with the trends you see on the runways,” she says.

Amid the often more drab Canadian apparel, Ms. Wong’s finds stood out.

But once the Anthropologie store opened in Vancouver, giving others easy access to the chain’s offerings, Ms. Wong was less enthused. She says her purchases have lost “some of that specialness,” proving that the retailer’s move to Vancouver was a mixed blessing for her.

That sense of disappointment is common with fans of foreign brands. The most recent flare-up involved preppy American apparel retailer J.Crew, whose legion of Canadian devotees turned against the company within days of its Canadian launch.

In the past decade, a number of international chains with strong Canadian followings have responded to consumer demand and launched outlets here. But with unexpectedly high prices, limited selection and diminished brand cachet, the most ardent customers often turn fickle once a presence is established north of the 49th parallel.

When her university friends’ apartments were covered with band posters, Jennifer Morrison’s was an homage to J.Crew. Pages of slim, leggy women in pencil skirts, cashmere cardigans and leather pumps formed a colourful collage on the wall.

Ms. Morrison’s loyalty to the apparel retailer began during high school with shopping sprees on family vacations in Maine and continued into her 30s, with near-daily trips to the online store from home in Canada.

But when the company finally opened a brick-and-mortar shop in Toronto earlier this month and launched a Canadian e-commerce site, Ms. Morrison’s allegiance soured. She realized the company had hiked prices by 20 to 30 per cent. And to make matters worse, duties were tacked onto the online purchases as well.

“This is ridiculous. Things you ordered the day before were way cheaper,” the 35-year-old TV producer says. “I said to everyone, ‘You should really boycott J.Crew.’ ”

Ms. Morrison was just one of hundreds of loyal customers who expressed frustration with the company’s Canadian pricing scheme. After much negative media attention, J.Crew scrapped the added duties late last week, even sending some customers, including Ms. Morrison, gift cards to make up for those extra duties they’d paid.

Alan Middleton, an assistant professor of marketing at York University’s Schulich School of Business, says the popularity of online shopping combined with the strength of the Canadian dollar has made customers expect to see the same prices (if not better ones) when they buy from foreign brands.

Consumers are more comfortable shelling out the big bucks when they buy those items when travelling, because social cachet is included with the purchase.

“When you wore something special that wasn’t readily available in Canada, it communicated your commitment to shopping, your experience in travelling, your good taste,” he says.

But Ken Hardy, an emeritus professor of marketing at the University of Western Ontario’s Richard Ivey School of Business, says that theory usually only applies to apparel, since it serves as a personal differentiator.

Although his daughter, he points out, was miffed when J.Crew set up shop in Toronto because it lost some of its exclusivity, she wasn’t disappointed with Victoria’s Secret coming to Canada, “because it’s undergarments. She didn’t care if other people had accessed it.”

In the same way, U.S. retailer Pottery Barn has thrived in Canada without consumers worrying about loss of individuality since “you don’t have to see [that couch]on the subway or the street or the person next to you,” Dr. Hardy says.

Customers can also gripe about limited selection at Canadian stores versus the variety they’re used to seeing online or in U.S. outlets.

Cynthia Cheng Mintz, a 31-year-old Torontonian who writes about fashion, makes a few trips a year to Manhattan to find unique pieces in her size – a 00 petite. At J.Crew’s Toronto location, she was disappointed by the absence of garments that fit without need for serious alteration.

“If you are petite, you are pretty much regulated to online shopping,” she says.

Ms. Wong shares that complaint about selection. She usually peruses a retailer’s website to zero in on items she likes before heading to the store. The strategy has worked well in advance of a cross-border excursion – not so much in her hometown.

“The chances of me finding it in store in one of the Canadian outlets are kind of 50-50,” she says.

Even when she finds what she’s looking for at the Vancouver store, she has to deal with a steeper price than she’d pay in the United States.

Soon after Vancouver’s first Anthropologie location opened, Ms. Wong noticed that one necklace adorned with semi-precious stones was listed for $58 (U.S.) online but was priced at $68 (Cdn.) in Vancouver. Without even factoring in the exchange rate, that was a 17-per-cent increase.

Though Vancouver’s Anthropologie may receive less business from Ms. Wong, any initial disappointment with a brand that sets up shop in Canada usually passes with time, Dr. Hardy says.

“I think, fundamentally, when you look at the longer-term success of these brands, they really have prospered,” he says, citing the success of H&M and Pottery Barn, among others. “They’ve become the leaders in their categories in almost every category.”

And for every previously existing customer that is lost, several new ones are often gained, he notes – sometimes even attracted to a retailer because of negative media attention.

“I think far more people know that J.Crew is in Toronto than would have without that kerfuffle in the pricing,” he says.

While almost all her favourite brands have a presence in Vancouver (though she says she’d still love to see a Madewell, Topshop and Uniqlo), Ms. Wong still considers taking a day trip to Seattle before she settles for buying in Canada.

“It gives you pause for sure,” she says. “Before you actually buy it, you think, ‘Oh, am I going to be going cross-border any time soon?’ ”

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