By Mercedes Gonzalez, owner Global Purchasing Companies
It’s not just about trends
Besides knowing what is on-trend, fashion retailers need to understand consumer behavior. Knowing why people buy, what they buy, and how much they are willing to spend (known as consumer price resistance), means understanding where consumers’ values truly lie.
For example, during the financial crisis 2008, people were losing their homes and jobs, but designer shoes, which start at $800, never dipped in sales. Consumers gave up expenses like going out for lunch or taking taxis, but they were not giving up their shoes. They even started shopping at fast fashion retailers, like Zara, and pairing $100 dresses with designer shoes and bags. And guess what? That high-low chic worked and looked great.
But was high-low chic an iconic look of the new millennium? If we take a close look at the whole time period, we see that the common denominator was actually comfort. Every year there was a new crisis: Y2K, 9/11, SARS, the war in Iraq and Anthrax. You get the picture. In times of crisis, people look for comfort; in their clothing (bamboo fabrics), in their footwear (Crocs) and in food. People stopped going out as much and entertained at home. That became the new normal.
Seeing the future
As we examine fashion in this decade, consumers are becoming fatigued on many fronts. Fast fashion is slowly but steadily losing traction. People are tired of walking into a room where everyone is wearing almost the same thing. They are dissatisfied with poor craftsmanship and thinking more about social responsibility when making purchases. They are spending dollars on well-crafted and limited-production items that have an interesting design direction.
Another area of fatigue is the sad or guilt story. Consumers do value items that are ethically made, but there is concern for how genuine these claims are. Even Made-in-the-U.S.A. claims have come into question over items like watches that are assembled in the U.S. but contain parts made overseas.
Which brings me to consumer price resistance. As a rule, it doesn’t matter what things cost you to buy, it only matters what the consumer is willing to pay. There are many factors that go into that judgement, especially the story behind the product. Today’s consumer sees buzz words like “fair trade,” “eco friendly” and “sustainable,” and labels with the maker’s name and photo as the new normal and expects them to be value-adds that don’t correlate to an increase in price. Think about an organic tomato merchandised at Whole Foods in a wood cart with locally made, fresh mozzarella and a hand-painted sign of the farm’s name. You pay top dollar for it because of the story you perceive from the display. Now did you know that Walmart also carries organic tomatoes but at probably half the price?
My end-of-the-year predictions
Boutique retail businesses are thriving. U.S. consumers are not necessarily money-poor, but time-poor. They expect an expert to attend to them during the shopping experience and will pay for it. Investing in properly training your sales staff will be important.
It’s also an election year, and sales typically drop more than normal during the October before the vote. Plan fun, in-store events to help draw customers in, like a how-to workshop that shows them how a favorite summer dress can be layered up for use in winter. I also warn you not to post the slightest hint of anything political.
On the flip side, November should really be an excellent month. Remember, retail is a form of therapy. Consumers who feel relieved from the election will…guess what…go shopping to celebrate, and people who feel sad and depressed over the election, well, they’ll go shopping too. Plan your OTB accordingly.
One last note. Don’t guilt consumers into a purchase. Give them real reasons to buy as opposed to making them feel like they’re doing charity work. Extended store hours, local delivery service, exclusive or limited-edition items, gift wrapping, are just a few touches that bring real value to shopping at your store.
Hear Mercedes Gonzalez speak at August Atlanta Apparel. Visit AmericasMart.com to add her seminars to your Market Plan:
Thursday, August 4:
10:30 a.m. ǀ Capturing the Social Occasion Market
3:30 p.m. ǀ Retail Math
Friday, August 5:
10:30 a.m. ǀ Sweet 15 (Quinceañera)