Recap
World Retail
Retailers are flocking to India thanks to an economy that is still growing and a young population increasingly becoming aware of major brands.
Worldwide sales declines among luxury retailers will likely continue through 2010 and into 2011.
- JUST THE FACTS
1. The apparel industry is a $191 billion industry.
2. Back to school sales in the U.S. were expected to reach $38.3 billion, up .06% from 2008.
3. A recent study found that in locations with a strong independent retail culture, 45% of every dollar spent at an independent bookstore remained in the local market.
4. In the first half of 2009, the sale of luxury goods dropped 15%-20% over 2009.
5. American families account for 40% of all borrowing in the U.S.
6. Between 2003 and 2004 handbag sales grew by 26%.
7. Handbag sales reached a peak in 2007 of $9 billion, up 100% over 2001.
Go Figure
1. Emanuel Ungaro recently announced that it hired Lindsay Lohan as its artistic advisor.
2. Vera Wang dropped prices for next spring’s resort collection and was told by many department store buyers that her price of $600-$800 for dresses maybe too low for a designer department.
3. Designers are wondering why their clothes are being seen as exotically pricey after doing quick-and-dirty lines for fast fashion retailers.
4. Consumers now expect merchandise more frequently with the rise of Zara, H & M, and Forever 21. Yet, designers are trying to reduce the number of lines they create each year (fall, holiday, resort, spring, and summer).
5. In the last quarter ending September 30, 2009, Neiman Marcus sales were down 23% from the previous year.
6. In 2006 and 2007, Chanel introduced clear “naked” handbags. The next year in 2008 total handbag sales dropped $1.1 billion.
7. Luxury consumers are still buying at the high end, which has become somewhat relative, but entry level shoppers are looking for items at lower prices.
8. Gourmet tea is now selling for up to $1000 a pound and sells for 30% more than standard teas in restaurants. The French are the leading connoisseurs and they are bringing as much discernment to tea drinking as wine. The leading purveyors of tea include TWG Tea based in Singapore, and Le Palais des Thes and Dammann Freres in Pairs.
Rise of the Frugal Consumer
1. Consumers have adopted a prolonged frugality, especially in the purchase of luxury goods.
2. Higher income individuals are restricting purchases to items that have a more practical purpose and forgoing items that are trendy and may go out of style in one season.
3. The consumer is moving toward individuality and away from fashion commands on cue such as hem length.
4. Consumers are spending more time at home eating and not as much time eating out.
5. Home improvement shoppers have turned to purchasing repair and maintenance items, instead of buying discretionary goods.
6. Consumers still value high quality, convenience, and healthfulness.
7. The back-to-basics shift in consumer sentiment will likely remain permanent, even after the recession.
8. Consumer behavior as a result of this recession has been modified for an entire generation.
9. While traditional toys sales have declined as a result of competition with video games, iPods, and the internet, Lego’s sales jumped 32% in 2008 and double digit sales gain continue in 2009.
10. Consumers have cut back on all forms of travel: gas, new auto and airplane tickets. Yet, consumer expenditure on all forms of entertainment is up in 2008 and 2009 over 2007.
11. Unemployment, salary freezes, and salary and benefit cutbacks will remain a significant drag on consumer expenditures for some time.
This entry was posted on Wednesday, October 14th, 2009 at 3:23 pm and is filed under Retail, Specialty Retail. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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