Retailers stand out by vetoing the ‘pink tax’

Discussion
Photo: Boxed
Jun 14, 2018
Jasmine Glasheen

Female consumers are wising up to the gender-based pricing discrepancies on some of their favorite products. For a long time, women have been paying a premium on everything from toddler’s clothing to adult diapers. The additional cost that retailers tack on to goods geared towards women is also referred to as the “pink tax” and an increasing number of female consumers are seeking out products from brands that don’t charge more for women’s goods.

As it stands, USA Today reports that retailers charge:

  • Four percent more for girl’s clothing;
  • Seven percent more for girl’s toys and accessories;
  • Eight percent more for women’s clothing; and
  • 13 percent more for women’s personal care products.

It is estimated that women pay an average of $1,351 more per year on basic goods. To add insult to injury, many retailers also jack up the price of plus-sized women’s clothing. Consider also that women make 80 cents for every dollar a man makes, and that 67 percent of U.S. women fall into the category of plus-sized.

As consumer awareness about the pink tax grows, women around the world are refusing to pay more for basic goods and opting to buy men’s products instead, as they’re usually made with nearly the same ingredients. In addition, events and panels about eliminating the pink tax are popping up in cities around the U.S., such as the recent “Ax the Pink Tax” event in Miami, Florida.

Retailers are beginning to take notice. Boxed.com, for instance, publicly refuted the pink tax and now absorbs the additional costs of women’s goods instead of passing excess charges along to female consumers.

“The response from customers has been great,” Nitasha Mehta, associate director of marketing at Boxed, told CBS News. “It’s been a pretty significant increase in sales.”

Female consumers’ unwillingness to pay the pink tax is also creating a window for startups aiming to offer women’s products without the pricing disparity charged by traditional retailers. Subscription razor company Billie, for instance, was founded with the notion of offering women shaving products at the same price points as male subscription shaving services.

TechCrunch reports that, “While many services and products aimed at women, including clothing, haircuts and essential toiletries, are often more expensive than similar (or even near-identical) goods marketed to men, razors and dry cleaning are ‘the two worst offenders.’”

DISCUSSION QUESTIONS: Do you see an opportunity for retailers to connect with their female consumers by eliminating the pricing disparity on women’s goods, such as apparel, children’s toys and personal care products? Is the positive publicity generated by eliminating the pink tax worth absorbing these costs?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The long-term benefit of providing a better-designed experience for customers who consume products impacted by the pink tax far outweighs the expense."
"Here’s the scary thing: most women are not even aware that they pay more than men pay for similar goods and services."
"Unless manufacturers have a justifiable reason for these pricing differences, there really is no excuse for applying the “pink tax!”"

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17 Comments on "Retailers stand out by vetoing the ‘pink tax’"


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Max Goldberg
Guest

Retailers should explore any options that allow them to differentiate from each other. Eliminating the pink tax, particularly when women’s issues are grabbing daily headlines, could be a great way to accomplish this. And if enough retailers push back on manufacturers, perhaps the tax would go away, rather than having to be absorbed as a cost of doing business.

Joanna Rutter
BrainTrust
6 months 1 day ago

Thanks as always to Jasmine for propelling conversations about key issues like these in retail! I’ve been thinking about the field of service design a lot lately, and I think this falls under that label. Beyond being mere good PR (see: CVS’s commitment to unretouched photos) eliminating the pink tax is an opportunity for businesses to amend what has not been adequately addressed by legislation or the market. Those absorbed cents add up for a business, but the long-term benefit of providing a better-designed experience for customers who consume products impacted by the pink tax far outweighs the expense.

Now, for a real challenge to retailers considering absorbing the pink tax: I would exhort them to also consider reevaluating how the women who work for them are impacted by their healthcare benefits, maternity leave, wages and other internal practices. A business that considers and serves women well starts from the inside out.

Jasmine Glasheen
Staff

I couldn’t agree more, Joanna! Brands are aligning themselves with their consumers’ values, since money talks. Maybe as corporations are more pressed to find talent in certain fields we will see more competitive internal practices. Here’s to hoping!

Cynthia Holcomb
BrainTrust

Today versus a decade ago, hidden, unfair fees, leveled at one group of people, once exposed will likely undermine the credibility of a retailer. The question is why a “pink tax” has to be absorbed? If both the male and female version of a product cost the same, what needs to be absorbed? Sounds like a smoke screen to deflect those less interested in finding out the real reason. Based on today’s consumers, retailers need to get on top of this tax before it sours their reputation.

Trevor Sumner
Guest

With an expensive land grab for customers in this critical space, the economics for lifetime value and loyalty seem to be ROI positive. The marketing feedback for these programs and grassroots programs to overturn the punitive laws will reward early adopters. The time is now and may eventually become table stakes.

Evan Snively
BrainTrust

The luxury vs. necessity designation on feminine hygiene products is the biggest injustice from this larger grouping for me. From an economic standpoint I don’t think pricing disparities across all categories need to be adjusted unless the goods aren’t selling. But the taxation of core necessities is something that truly needs to be addressed (kudos to the states who have already made those changes on their own). Brands have an opportunity to raise their voices in support of this change from a corporate standpoint, which I think will have the most impact long-term.

Nikki Baird
BrainTrust
I think Joanna makes a great point. It’s not enough to make a commitment to consumers. This is such a key point about this era we’re living in, of transparency and corporate social responsibility that consumers are demanding. You have to be genuine AND authentic. Genuine is what all of these companies are doing — they’re saying, this is wrong and it should end. But to be authentic, they need to carry that mentality into everything they do. You can’t claim to be supporting the environment with the products you sell and then pollute like no tomorrow out the back end of your business. Just like you can’t claim to care about treating women fairly, and then pay them less as workers, or penalize them with a business-based mommy tax when it comes to benefits. Just wait for someone to figure out if these companies like Boxed.com are living this value end-to-end. Because someone will — and they will make hay out of it if these companies are not. And if you don’t believe that,… Read more »
Joanna Rutter
BrainTrust
6 months 1 day ago

Yes to everything here! I think about the Dove and Axe disparity within Unilever all the time. It’s just two different ways to sell soap at the end of the day. Can’t scrub away the toxicity of Axe’s ads with a seemingly sweet Dove campaign. It’s got to start at the top of Unilever’s practices and trickle down to both brands.

Ricardo Belmar
BrainTrust

Unless manufacturers have a justifiable reason for these pricing differences, there really is no excuse for applying the “pink tax!” Yes, there is an opportunity here for retailers to take a stand and push manufacturers to right this wrong. Boxed.com is showing everyone what can happen when you do the right thing and equalize prices that had no reason to be different. It is an opportunity for retailers to connect with customers by showing some goodwill and hopefully making manufacturers realize this isn’t acceptable. As so many women’s issues finally get needed attention this is an important step retailers can take to move the conversation forward!

Georganne Bender
BrainTrust

Here’s the scary thing: most women are not even aware that they pay more than men pay for similar goods and services.

I remember a panicked trip to a department store when we made an overnight flight, but our luggage didn’t. Rich’s suit was altered and ready that day for free, mine could not be ready for three days and included a hefty alteration fee.

Charging women more for dry cleaning, razors, clothing, etc. is crazy. Charging more for plus-sizes is crazy. People are taking notice; legislation was introduced in April to prevent companies from pricing goods and and services differently based on gender.

As the pink tax is talked about more and more there is hope that companies will strive for equality where it is warranted. And it is always warranted.

Meaghan Brophy
BrainTrust

There is definitely an opportunity for retailers here. Charging more for a women’s product when it’s really the same as the men’s version just in pink doesn’t fly with today’s consumers. Personally, I’ve been buying men’s razors for years for this reason.
Consumers want equality and transparency, so retailers should keep up.
As Cynthia pointed out, these “excess costs” of producing women’s products is more of a smokescreen than a reality. And like Nikki said, consumers can tell if a business is doing the right thing because it’s the right thing, or if they are doing it for good PR. So if retailers really want to make a difference for their female consumers, yes you need equal pricing but you also need to look at how you’re treating employees.

Brandon Rael
BrainTrust

Thank you for sharing Jasmine, and for raising the awareness around this socially unacceptable issue.

There is a very clear opportunity for retailers to right the ship and fast, as this is a pricing issue that needs to be resolved as soon as possible. As we move to an increasingly relationship and experienced based retail model, trust and transparency are key and eliminating the Pink Tax is a step in the right direction. The additional margin and revenue retailers may have earned on similar women’s products is not worth the negative PR, and will impact the relationships that retailers are working so hard to build.

Retailers have a better chance to surivve and thrive, address the needs of each and every customer, regardless of gender, age and all demographics. This culture change stems from the top of the retail organization, and if executed the right way, it will resonate in longer-term customer relationships.

Seth Nagle
BrainTrust

Retailers need to find a niche; absorbing the pink tax could be a great one for some. Also as Boxed mentioned with the lower prices, retailers should see an increase in an item’s velocity which gives them greater weight when discussing pricing with their supply partners down the road.

James Tenser
BrainTrust
This is such an important issue that I want to offer some thoughts about some practices that may contribute to the “pink tax” and how it may be tackled by brand marketers and retailers. Since I may be wandering into a minefield with what I’m about to share, I want to begin by stating emphatically that gender-based price gaps on equivalent items like personal care products are WRONG and BAD BUSINESS. So PLEASE don’t demonize me for pointing out the following. I hope it may provide a path to a solution: Many brand and retail businesses use price optimization technology based on computerized demand models. These apply mathematical science to calculate the most profitable price point — not the highest margin, but the level at which product sales and profits are optimized. (Remember the price/demand curves from Econ101? There’s a most profitable point that can be calculated by measuring consumers’ elastic response to price.) A pricing system that is based on demand modeling does not use gender as an input. That would be stupid, and… Read more »
Marge Laney
BrainTrust
6 months 2 hours ago

Well said, James! Women should vote with their wallets and their feet. On the sales tax added to feminine hygiene products issue, that’s a state and local government issue.

Dave Nixon
BrainTrust

It should be consistent regardless of gender or segment and this is one very positive effect created by a more sensitive Millennial generation that will help call out some of the unfair business tactics of brands that agreed to this approach many years ago.

Good luck if you’re a brand that will not or do not subscribe to this new level of transparency and awareness around the “Pink Tax.”

Min-Jee Hwang
BrainTrust

“Axing the pink tax” is a great opportunity for startups who offer women’s products. I think it’s important to note how successful Boxed has been in refuting the pink tax and absorbing the additional costs so that women can pay the same amount as men do for their products. Boxed has seen a significant increase in sales since acting on this movement and I believe more companies will follow in their footsteps to increase popularity and sales among women.

wpDiscuz
Braintrust
"The long-term benefit of providing a better-designed experience for customers who consume products impacted by the pink tax far outweighs the expense."
"Here’s the scary thing: most women are not even aware that they pay more than men pay for similar goods and services."
"Unless manufacturers have a justifiable reason for these pricing differences, there really is no excuse for applying the “pink tax!”"

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