Friday, October 9th, 2009
Lego
Lego has opened its first concept store in Concord Mills, located north of Charlotte, NC. The 4,520 square foot store has been designed to create an interaction between children with on-site master builders. The store has room for birthday parties and classes.
New World
A new world is likely to emerge in which designers rebel against long lead times and where they take their collections directly to the consumer through their own boutiques, trunk shows, and over the web.
Web Sales
Web sales are projected to reach $156 billion in 2009, representing 6% of the total U.S. retail pie
The Web Fashion Consumer
Consumers have come to expect new merchandise more frequently, thanks to the web and fast fashion retailers such as H & M. Many cannot understand why they have to wait 6 months to see the fashions seen on the runways. Buyers at department stores generally base their orders on the past, while fashion editors gravitate to the most photogenic and future looking styles, leaving the consumer stuck in the middle. This results in one facet of the fashion industry looking forward and the other looking backwards. The consequence: a consumer on one hand is told what to buy but on the other, not where to buy it.
In response, a new generation of fashion retailers is emerging on the web where news is freely given and fashion is sold. Net-a-porter with average sales of $820.00 per transaction and customers from 170 countries is one example of this new generation of merchants. The company has successfully merged its web retail site with a fashion news site catering to a new consumer who wants credible news over magazine advertisements and the most up to date fashion now.
Entertainment
Families spent 5.1% more on entertainment in 2008 than in 2009, something that has surprised many economists. As consumers tightened their pocket books and wallets one would expect entertainment to be one of the first categories to see significant decreases. But the 5.1% increase in spending equated to 16.5 billion more dollars spent in the category over 2007.
Household debt
The American family is trying to put money into savings and reduce their overall debt, but they are clearly not faring as well as one might expect in this recession. Household debt now amounts to about 125% of after tax income.
High Net Worth Individuals
Luxury retailers are faced with a significant decline in Americans with a high net worth defined as having $1,000,000 of assets available for investment. In 2008 the assets of these individuals dropped by as much as 22%. The result is a major decrease in sales at retailers such as Neiman Marcus where sales have decreased by over 20% in 2009 over 2008.
Tags: consumer, consumer spending, consumerism, entertainment, fashion, fashion trends, household income, japan, lego, luxury, online sales, online shopping, recession, Retail, versace, web sales
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Wednesday, August 19th, 2009
The media is quick to point out the dismal sales performance of numerous retail chains. Reports of significant decreases in comp sales are reported daily and full economic recovery is clearly tied to a resurgence of retail sales. While, the end of the recession may be near, retail sales will lag far behind a recovery. Why? There are too many consumers with too much debt, high unemployment, and homes under water to consider shopping for anything other than necessities. With consumer expenditures accounting for almost 70% of all economic activity and without a confident consumer, retail sales are going to continue in their depressed state, even as other signs of a recovery appear to be positive.
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Tags: consumer, consumer spending, economy, Real Estate, recession, Retail
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Thursday, June 11th, 2009
Brands have been telling their stories for decades now. Typically, in a mass-advertising, mass-branding world, the ‘telling’ has involved reaching and impressing as many consumers as possible. Those who literally bought into these storied brands then gained the respect and admiration of other brand-exposed consumers.
Example: if you’re Jaguar, and your (expensive) story is about old money with a dollop of English eccentricity and the whole world is aware of this, then consumers craving recognition from anyone impressed with this kind of lifestyle only need to buy one of your cars to bask in the glow of their peers’ admiration. Much of the current market research completed today is based on this idea of the brand story. For instance, Country Squires tend to drive Jaguars because they are status symbols and gain them access to the social club. However, while well-known, storied and very visible STATUS SYMBOLS will continue to dominate consumer societies for years to come, they will face increasing competition from STATUS STORIES: As more brands go niche and therefore tell stories that aren’t known to the masses, and as experiences and non-consumption-related expenditures take over from physical status symbols, consumers will increasingly have to tell each other stories to achieve a status dividend from their purchases. Expect a shift from brands telling a story, to brands helping consumers tell status-yielding stories to other consumers.
These types of experience are rapidly increasing as guerrilla and mobile retail are gaining popularity. For instance, major newspapers have recently caught onto Kogi Korean BBQ which sells their tacos out of trucks in LA. Fans get location updates via Twitter & usually 100s of followers are waiting when the trucks pull up. Another example is the ever-growing in popularity Treat Truck in New York.
Status Stories: Why Now?
STATUS STORIES are an answer to some of the major shifts and trends taking place in the consumption arena, from uniqueness, to visibility, to ‘alternative status sources’:
No longer do consumers want to be like the Joneses, the Mullers or the Li’s. When individuality rules and conformity is frowned upon, owning something no one else has is hot. The ‘mass’ that consumers are willing to put up with is either the stuff they don’t really care about—and can get on the cheap at the Wal-Marts and Aldis of this world—and some remaining objects of mass desire like the iPhone or the Mini Cooper. However, even these are likely to be customized and personalized the moment they leave the warehouse, website or store.
This consumption trend accounts is pushing the hand-made, artisanal and local markets. Many designers are custom making fashion piece or designing limited edition items. These one-of-a-kind items are often the most have pieces of the season and consumers are willing to dish out the cash for the luxury of having one.
The shift from mass to unique explains the surge in niche or even one-of-a-kind products and services. So brands will increasingly not want to, or will not be able (if only for financial reasons) to tell their story to the masses. Which in turn means that consumers buying from these brands will no longer be able to rely on the product or service to provide them with that instant recognition and admiration from their peers. It is thus up to the customer to tell a story, any kind of story, with the brand providing the ingredients.
Besides the shift from mass to uniqueness, mature/prosperous consumers now predominantly live in experience economies. Experiences not only are inherently more unique, they also do a better job of providing instant gratification: they’re often more affordable, and thus more numerous than old-world status symbols.
Tags: consumer, guerilla retail, market research, mobile markets, mobile retail, pop-up shop, twitter
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