It takes more than a good eye

It’s not just about knowing the trend.

 

In business school they teach us the importance of demographics- how old the target consumer is, what’s their income, their education, etcetera. The truth is that in the fashion industry they just become numbers without reason. Is it more fitting to dress a body by age oversize? How many times have you bought something that you knew you couldn’t afford, but you still managed to justify it? How does that fit in a demographics? It doesn’t. I can name thousands of retail locations that yell out their demographics, “the people that come to our mall have million dollar homes, 2 kids in private school and drive a new car.” That demographic is usually maxed out without disposable income so they are not shopping high-end as you might be led to believe. They are shopping at Target. It’s all about the psychographics of the consumer and understanding their value system.

So besides just understanding what is on trend, we need to also understand consumer behavior. Why people buy, what they buy, and how much they are willing to spend on it; known as consumer price resistance. It comes down to understanding where the consumers’ values are.

For example, during the financial crisis 2008, people were losing their homes and jobs but designer shoes (which start at $800) never lost sales. This consumer gave up other things- going out for lunch, taking taxis, going out for happy hour- but they were not giving up their shoes. They even started shopping at one of the fast fashion retailers such as Zara but pairing that $100 dress with designer shoes and bags. And guess what, that ‘hi-low chic’ worked and looked great.

What was the iconic look of the 2000’s? If I were to ask you what the look of the 1950’s was, or the 1960’s, the 1970’s, the 80’s, and even the 90’s you would have a clear answer. But what was the iconic look of the new millennium? I’ll tell you UGLY. Everything that was ugly sold. Crocs, Ugg’s the Snuggie blanket! Need I say more? Let’s take a look at cuisine, we went from very fancy exotic foods to mac and cheese, fried chicken and cupcakes. If we take a close look at the whole picture you will see that the common denominator is a comfort. So let’s go back to 1999. Remember Y2K? The computers were going to shut everything down because it was going to revert back to 0000? Then came the attacks of 9/11, then SARS, a war in Iraq, Anthrax in the mail, the tsunami that killed 150,000….you get the picture. Every year there was a new crisis. In crisis, people look for comfort, in their clothing (bamboo fabrics) in their footwear and food. People stopped going out as much and entertained at home. That was the new normal.

We, as merchants, need to have an overview look at consumer behavior in a global capacity, which does take a little use of the crystal ball.

Looking at what is going on in this decade, the consumer is hitting fatigue on many fronts. Fast fashion is slowly but steadily losing traction. The consumer is tired of walking into a room with everyone wearing almost the same thing. They are getting tired of poor quality and are thinking more socially responsible with making a purchase. They are spending their dollars on items that are well crafted, limited, detailed, and have a design direction that is interesting.

Another area of fatigue is “the sad or guilt story”. The consumer does value items that are ethically made, but there is a concern for “how genuine” these claims are. Even made in the USA has come into question over watch parts being made overseas and the watches only assembled in the USA. The consumer sees all the buzz words like ‘fair trade’, ‘no animal testing’, ‘eco-friendly’, ‘sustainable’ and labels with the maker’s name and photo as the “new normal” and is expecting it to be value added without costing more.

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 for something. There are many perceptions that go into making that judgment; the country it was made, the fabrication, the retail environment and the “story” we spoke about before. Think about that organic tomato merchandised with the local made fresh mozzarella in its wood cart and hand-painted sign with the name of the farm at Wholefoods. You pay top dollar because of all the perceptions that are being visualized in the display. Now did you know that Walmart also carries organic tomatoes but they are probably half the price?

Now for my end of the year predictions. Boutique retail business is thriving. You can see this boutique trend when department stores like Macy’s are offering Etsy shop-in-shops at the NYC flagship store. The consumer wants and needs personal attention and will pay for it. In the US, the consumer is not necessarily money poor but time poor. They expect an expert to attend to them during the shopping experience. So investment in sales training will be important.

Furthermore, it’s an election year and typically during the month of October, sales will drop more than normal. Looking at consumer behavior, people will stop spending and take a wait-and-see attitude with their money. I’m not sure but maybe its fear of what’s to come. I do feel that this election year will be more dramatic than others, so plan fun events in the store. Try how-to workshops like taking your favorite summer dress and layering it up for winter. I do warn you not to post the slightest hint of anything political.

On the flipside, November should really be an excellent month. People that will feel sad and depressed over the elections will go shopping (they drink and eat too but that’s another business). Remember that retail is a form of therapy. Consumers that feel relieved from the elections will…guess what…go shopping to celebrate! Plan your OTB accordingly.

One last note. Please do not post “shop small” “shop local” or any math problem that tells me some little girl isn’t getting dance lessons this year. Don’t guilt the consumer into shopping. Give them real reasons; extended hours, phone orders, local delivery service, exclusive or limited edition items, gift wrapping, any and everything that brings real value to shopping at your store, as opposed to feeling like they are doing charity work.