Decoding Millennial Shopping Traits & Habits

Decoding Millennial female shopping habits has become an obsession for companies, marketers, researchers and bloggers alike. Because this group is so large, the Millennial female is seen as the present and future of retail and understanding her is key to their success. There is endless hypothesis on what she wants and how she shops.

Millennials represent almost a quarter of the US population.

Millennials represent almost a quarter of the US population.

Who are Millennials?

According to the US Census Bureau Millennials are people born between 1982 and 2000. That makes them 33 to 15 years old. This group represents 83.1 million people and is more than one quarter of the US population. Baby Boomers, the formerly largest population group, is those born between 1946 and 1964. They are ages 69 to 51. Obviously Baby Boomers are getting smaller as the group ages. However they are still a large group and the wealthiest population in US history, so cannot be overlooked, by retailers.

Defining Millennial people ranging in age 15-33 as one homogeneous group, has it’s pitfalls. The life stages of teen priorities versus a young adult building a grown-up life, are quite different.

Teen’s lives focus on their school career, friends, social events, sports and maybe a part-time job. They generally want to “fit-in” with peers. Their money is mostly spent on fashion, technology and entertainment.

Young adults post-college, are socializing, building careers, getting married, setting up first homes and having children. They are socially influenced, but with maturity, they lean more toward more individualism. They are entering the part of their lives when they start to be adult consumers for wedding services, home goods, cars, insurance, housing, etc.

There are some generalizations you can make for all Millennials:

  • They are very budget conscious and serious deal seekers. Obviously, teens have limited spending power. Young adults are coping with weak employment, stagnant wages, unprecedented school debt and dealing with rapidly rising rents, as they start making larger, adult life purchases.
  • They are digitally savvy. The younger Millennials have grown up with technology all their lives.
  • Because of technology they access information and discover new brands continuously. They are very informed, brand aware and also brand agnostic for many items. They move on quickly to the next big thing.
  • They are very influenced by peers through social media and word-of-mouth.
  • They love to “share” the shopping experience.
  • They are more racially diverse than previous generations, because of immigration and higher birth rates in some groups. According to the US Census, 44.2 percent of Millennials are part of a minority race or ethnic group (other than non-Hispanic white).

Big Shifts in Retail Because of Millennials

It is no wonder why certain shopping channels or habits, have risen dramatically in the past several years, as they are driven by Millennial shoppers:

  • Fast Fashion: This frugal, diverse group has driven the meteoric rise of fast fashion stores such as Forever 21, H&M, Zara, Old Navy and will ensure the success of US newcomer Primark. These fast turning, cheap stores are just what the budget conscious Millennial wants. She can find a wide range of looks to meet her diverse cultural tastes. Being brand agnostic for apparel, the deal is more important than the label.
  • Online and brick and mortar consignment stores: The market for consignment of apparel, handbags accessories, jewelry and shoes is booming. This is a perfect solution for the budget conscious and brand aware Millennial. She can consign her discards on the same site as she picks up used, pricey branded items at a fraction of the cost. See sites such as Poshmark, ThredUp and Tradesy.
  • Rental fashion sites: Millennials drive the sharing economy. These tight-fisted, brand aware females get the brands they love on rental or rent to purchase sites of designer, everyday, wedding, plus size and maternity clothes such as Rent The Runway, Le Tote, Mine for Nine, Gwynnie Bee and Borrowing Magnolia.
  • Mass customization: The individualist Millennial has driven the trend of brand customization online for apparel, sneakers, handbags, jewelry, etc.
  • Social shopping: Millennials love to share… their photos, purchases, experiences and thoughts, like no generation before. Social sharing sites like Instagram, SnapChat, Pinterest, Facebook, etc. give them a platform for approval or to boast about their fashion finds. They can shop while simultaneously sending photos to friends for approval. They can see what friends are already wearing, too.
  • They do their research: This is the information generation. They do their homework online before making a purchase. They scout out the best deals, look for coupons and comparison shop to stretch their budget. More often than not they make the final purchase in-store however. E-commerce has grown tremendously, but brick and mortar sales still represent over 90% of retail sales.

In review, if targeting the Millennial customer you have to consider her life stage and culturally diverse tastes. She can’t be thought of as like-minded thinkers. Millennials  like to engage with brands that share their values, but can be brand agnostic and fickle. This is the greatest information and sharing generation, that loves to score a great deal.

Dix&Pond is the blog of Dix & Pond Consulting, Boston-based, product development, creative, branding, business consulting and executive coaching for apparel, footwear, home & consumer products companies and retail analysts. Follow me to get the latest posts

Thank you for liking and sharing this, if you enjoyed the post!

Advertisements

Primark’s Boston Store- a Retail Force to Be Reckoned With

Primark, the UK-based discount retailer opened their first US store in Boston this month. The low-cost, low margin, fast fashion retailer, is located in the 70,000 square foot, historic Filene’s department store building in Boston’s Downtown Crossing section. They have plans to open 10 more locations on the East Coast by Easter 2016.

Well designed floor sets at Primark

Well-designed floor sets at Primark

I visited the store on Saturday the 26th and found it mobbed with urban shoppers. The location is a tour-de-force for a company that targets 18-35 year old, cash-strapped Millennial demographic. The Washington Street site, of recent decades has been a decaying, retail wasteland. Surrounded by the Financial, entertainment districts and Chinatown. It is far from other residential neighborhoods, but directly across from the highly central Park Street subway stop. The daytime walkable population swells dramatically, from the Financial District and other nearby employers.

Boston is home to three major upscale shopping areas, Copley Place, Newbury and Charles Streets. Many of the world’s best retailers open test stores here, because of the many universities, large population of wealthy international students and tourists, as well as a cosmopolitan, well-heeled population. The mass customer has been grossly underserved in Boston proper, so Primark, H+M and Macy’s in Downtown Crossing offer a strong trifecta for budget-conscious customers.

Seventies items at Primark

Seventies fashion items at Primark

I’m blown away by Primark’s well-merchandised assortment, attractive floor sets, and incredibly low prices, e.g. cotton tees for five dollars, jackets for thirty-five, seven dollar jeans, trendy shoes for ten…The assortment is compelling with strong key item basics and on-trend pieces like Bohemian, seventies-inspired items. It is wearable and stylish, including men’s,women’s, children’s and home.

The offer is more “adult”, less “teenage” than Forever 21 and Old Navy, less contemporary than Zara and less trendy than H+M. They also have a particularly strong intimate apparel department, which could eventually take a bite out of Victoria’s Secret. I couldn’t help thinking, why a frugal customer would scour discounters like TJX, when they can find such depth of selection at Primark?

Sometimes foreign-based retailer’s brand aesthetic doesn’t fit with American styling, color and taste levels. (I think this will hamper Uniglo’s future US expansion.) Primark’s Dublin-designed products feel comfortably appropriate in the US market.

A well done athletic assortment

A well done athletic assortment

Primark is another game changing player in the seismic shift of the Teutonic plates under US retail. The Millennial customer’s high debt levels, surging rent, transportation, entertainment expenses and the cost of staying connected, have had a deflationary effect on apparel pricing. To a great extent this customer is brand agnostic and sees apparel as a commodity. Fast-fashion, discount stores, consignment and apparel rental retailers, have been the beneficiaries of this mega-trend.

I spoke to an eagerly observing Primark executive. He was leaving in a few days to open the King of Prussia store in PA. I said, “Forever 21, Zara, H+M, Kohl’s, Target and J.C.Penney have a lot to worry about with Primark“. He wryly replied “That’s what we hope for.”

Men's clothing is wearable and compelling.

Men’s clothing is wearable and compelling.

Dix&Pond is the blog of Dix & Pond Consulting, Boston-based, product development, creative, branding, business consulting and executive coaching for apparel, footwear & consumer products companies and retail analysts. Follow me to get the latest posts

Thank you for liking and sharing this, if you enjoyed the post!

Neimans & Target Abomination

Neiman Marcus and Target released their much-talked-about holiday 2012 collaboration last week. I call it an abomination not a collaboration. This collection of random home and apparel items designed by well-known designers, like Carolina Herrera, Jason Wu, Rag and Bone, Tory Burch, Tracy Reese and Diane Von Furstenburg are poorly designed, low quality and strangely merchandised.  

The packaging is also big-box boring. They could have used high-end packaging to create a perceived value for the jewelry boxes, letter openers, lunch boxes, purses, glasses, dog accessories, etc. Instead they took the discount low-road and dished up the products to please the distribution center, not the customers.

This collection is just excess inventory and hype for Target stores and an embarrassment for the Texas-based bastion of luxury.  Shame on you Neiman Marcus, for putting your gold-plated name on some of the priciest drek I have ever seen. If you wanted to entice the aspirational luxury customer, you could have turned to your vendors to create some special value handbags, accessories, sweaters, tech cases and other compelling giftables. This Target collaboration can’t hold a soy candle to previous home runs like Liberty of London and Missoni. It will confuse and disappoint customers on both of the ends of the spectrum.

This public relations stunt has gone horribly wrong. These strange bedfellows have given birth to some very strange children. 

Products from the Neiman Marcus and Target holiday 2012 collaboration.

Products from the Neiman Marcus and Target holiday 2012 collaboration.

Dix&Pond is the blog of www.dixandpond.com Creative and strategic consulting for retail and wholesale apparel, shoe and consumer product companies.

JCP Product Report Card

Ron Johnson was hired in November 2011 as the new CEO to turnaround JC Penney. It’s time for his annual performance review and the results are decidedly mixed.

No doubt, he set a lofty goal to transform a poky middle-income retailer into “America’s favorite store.” He changed the pricing structure from hundreds of yearly promotions to everyday low prices. As I have said before, with all Johnson’s deserved bravado (from his stints at Apple and Target), he can’t change human nature and the love of the deal. Consequently, his sales are in free-fall.

He has had success tidying up acres of monotonous space and carving it into more appealing brand-specific shops. Some areas are downright Nordstrom-like.

My focus of this review is the product-to-date. A retail brand experience has 3 core parts, price, presentation and product. The latter is clearly the hardest nut.

Middle and low-end retailers have to create or partner with vendors for exclusive merchandise to compete with focused specialty retail and better department stores. The wholesale market for branded apparel has disappeared, as retailers increasing filled square footage with their own private label product. Upper-end department stores carry a mixture of coveted wholesale brands and complement it with their own designs.

It is impossible for JCP to create compelling private product across an entire spectrum and cater to a divergent customer base. They are clearly trying to serve two low-income masters, the loyal aging customer and the young growing family. The store experience has big highs and lows, depending on who you are.

 Most specialty retailers focus on a category or a defined target consumer. For instance, Victoria’s Secret focuses on creating intimate apparel and beauty products with one taste level.  Even though Target is a department store, they have a contemporary vision for all their fashion products. They don’t cater to a range of tastes.  

Unless JCP is able to harness the best design talent in the world, they will never achieve product greatness across the board. It is very tough to build and manage a massive creative engine and serve many masters.

They will only succeed if the store experience can supersede “acceptable,” but not exciting product. JCP doesn’t have a soul. It doesn’t have brand authenticity, except Sephora. They are hitting on the big trends but, most of the products feel like lukewarm versions of someone else’s good idea. Average grade C+.

Here is a product report card:

JCP 4th Quarter Product Report Card

Dix&Pond is the blog of www.dixandpond.com Creative and strategic consulting for retail and wholesale apparel, shoe and consumer product companies.

  

  

JCP – A View From the Field

As I have posted before (See JC Penney Report Card July 2012), the biggest challenge for JCP will be the product assortment, not the physical changes or visual merchandising. In a recent visit to see Ron Johnson’s progress turning a bland soup kitchen into a spicy retail buffet of instore shops and experiences, I saw a stark contrast of big improvements and steep mountains yet to climb.

Physically, the stores are significantly more pleasant. There are now many beautifully lit, tidy and open spaces. As small, colorful instore shops form, specifically JCP brand product, kids, lingerie, Arizona Jeans, Mango, activewear, outerwear and of course Sephora, there is sense of modern purpose and destination excitement. The brand experience in these departments invites exploration. The products are compelling and on trend.

Contrast to that, missy, petites, woman’s, handbags, jewelry and the home product areas are generic, at times sloppy and suffer a serious lack of purpose. Junior’s, men’s and shoes fall somewhere in between. Juniors has the tough task of duking it out with top-notch mall competitors like Forever 21 and Urban Outfitters.

Fall 2012 Product at JC Penney

Fall 2012 Product at JC Penney

As previously reported, Penney’s is banking on a revival of the shop-worn Liz Claiborne brand they bought from Fifth and Pacific (formerly Liz, Claiborne, Inc.) Since the glory days of Liz in the 80’s, this brand has stalled, sputtered and headed for a crash. Why do you think Liz Inc. was eager to close the chapter, change their name and put the past behind them? There have been multiple redos over the years, including one by Issac Mizrahi, that flamed out as quickly as the seats cooled at their fashion show. Liz Claiborne lost its way years ago and some of the best talent in the industry, hasn’t been able to resurrect it.

JCP has devoted an enormous amount of space to a zombie brand. They have identified it as a key brand for the new JCP. Liz women’s is a significant part of the entire women’s apparel area. They have erected a grand entrance, with slick modern seating, leading to cluttered racks of dreary sportswear targeted to a matronly customer. There is nothing distinctive or compelling about this merchandise. It could be any concocted private retail brand designed by merchant committees, not with a visionary eye. To make matters worse, the Liz Claiborne men’s product seems targeted to a contemporary, entry-level guy with black shirts, wide belts and slim cut pants.

Handbags have been one of the bright spots in a long cycle of weak apparel for many retailers. Color, interesting materials and unique shapes are driving this category. JCP flatly misses the trends here and their offering is redundant, neutral and uninspired, ditto for shoes. Fine jewelry occupies prime real estate and the assortment is ordinary at best.

Home is not where the heart is for JCP. I am looking forward to Jasper Conran and Jonathan Adler products in the future. Martha Stewart is another planned home introduction. The Martha Stewart brand has diminished in stature, as simpler, contemporary lifestyles have become more important to younger customers stocking their first homes. The current JCP home offering is painfully safe and sleep inducing.

JCP has to hire or collaborate with the best talent in the industry to give their products an authentic soul. Consumers can’t be fooled. They have no real moderate market to turn to.  This is a massive task with the size and scope of their offerings. No surprise there are highs and lows all over the store. They have to make sure their best talent is assigned to the key categories.

As for every day low prices, I think  their final strategy will fall somewhere in between low prices and deals. They can’t change human nature and of the thrill of the deal.

Kudos to Johnson for taking on such a mammoth challenge. The most coveted brands in the world, like Apple have a real soul and identity. It is  clearly impossible to harness enough top talent and provide the culture of creativity, to build a whole store of exceptional proprietary brands.

Dix&Pond is the blog of www.dixandpond.com                                                                                                                                                                    Creative and strategic consulting for retail and wholesale apparel and consumer product companies, as well as reporting for investors and equity analysts.

5 Reasons Why Fashion Brands Fail to Thrive

Creating a successful new apparel, shoe or accessory brand is difficult. Keeping it consistent and evolving with the audience over the long haul is challenging. Repairing a flagging brand is nearly impossible.

Fashion brands are not just individual products. The products, marketing, multi-channel experience, customer service and corporate identity are all an expression of a greater deliverable to the consumer. A successful brand is a total experience that the consumer can identify with. Consumers express who they are or want to be, by the brands they choose.

Too Narrow a Niche – Every brand concept has an audience of a least one. The success of a brand will depend on the size of the audience for whom it resonates and can’t grow beyond owning 100% of it. Understanding the size of the niche is critical to setting growth expectations. The most successful fashion brands are a lifestyle and tend to reach a wide spectrum of ages. Classic American brands like Ralph Lauren, Coach or J. Crew have the potential to reach a wider audience, than smaller niche brands like Betsy Johnson, BCBG or Coldwater Creek.

Lack of Identity – All great brands need to have a distinct personality. What they are and what they imply is essential to defining the brand identity. Half- baked concepts and inconsistent messages are dead on arrival. Brands have to have a soul and authenticity.

Too Many Cooks in the Soup – Great brands are focused and have consistent storytelling. Compelling stories are not crafted by committees, but generally woven by creative and opinionated visionaries. Mickey Drexler at J. Crew and Mike Jefferies at Abercrombie are perfect examples of this. They both have a reputation for razor-sharp clarity of vision and have their heads in the details for their entire brand experience. They offer consistent products and take fashion risks within the context of their brand story.  Behind every great brand you will find a strong brand champion.

On the other hand, many wholesale or retail private brands are lackluster, because silos of management are allowed to tinker with the offer, and the brand becomes a spiceless soup.

Clinging to History – Fashion brands with the longest history often find it difficult to find a current relevance. Customers evolve. Staff can get hamstrung by the past and they rest their laurels on old successes. They keep regurgitating them. They often don’t understand what the brand promised to the consumer. They only see the brand in terms of the individual products that were successful in their best times. They don’t have the vision to tell the brand story through relevant products in a current context.

Talbots is perfect example of this. In their heyday, Talbots was synonymous with a monied, New England coastal, lifestyle. Their customers played exclusive sports and volunteered at non-profits. They had the luxury of choosing not to work. If they worked, they were professionals or women rapidly climbing the corporate ladder. If it wasn’t your lifestyle, shopping at Talbot’s was entre to the exclusive club. There was a definitive social status for shopping at the red-doored, suburban stores. They sold a lifestyle, embodied in their total experience.

Talbot’s today is sailing in a dead calm. It lost its personality and cache of the New England good life a long time ago. The series of CEOs since Mrs. Talbot, didn’t understand what they were trading away. They didn’t understand how the customer evolved and weren’t protective of the exclusivity, the implied status of the brand. They opened cookie cutter stores in bland locations with a gyrating assortment. The theater grew bigger than the audience for the brand. It wasn’t special to shop at Talbot’s anymore. It became synonymous with an aging customer and their boomer customers don’t want to identify themselves as old.

Coach and Burberry are great examples of classic brands that have evolved a long history, into even bigger success.

Traditional Marketing vs. Engagement – We live in a diverse, fast-paced culture with the added complexity of a splintered media. Traditional marketing on TV or print media don’t have the reach they once did. Creating brand awareness has become increasingly complex because consumers have so many shopping and entertainment options. Marketing has become interactive, no longer a one way street. They are bombarded with messaging and will filter to the most interesting and engaging experiences with limited personal time.

Brands have to be keenly aware as to who the audience is and engage customers on their terms. Social media gives the customer a big platform to create or destroy brands.

Dix&Pond is the blog of www.dixandpond.com                                                                                                                                                                    Creative and strategic consulting for retail and wholesale apparel, shoe and consumer product companies.

Take the brand quiz… Can you identify these successful brands?

Can you identify all of these distinct brands? See answers below.

Answers: A= Coach, B=Tom’s, C=Lululemon, D=Michael Kors, E=J. Crew, F=Vera Bradley

JCP Report Card – Hope & Change

Visual merchandising is greatly improved.

Visual merchandising is greatly improved.

In my post last February about the transformation of J.C. Penney (JC Penney Ante),  my greatest concern was their ability to turn the product around. I didn’t doubt they could improve the design, housekeeping and experience of the physical stores; or that they could market the new strategy.

Department stores today are far more complex organizations than they were decades ago. They are now multi-channel and in some cases multi-national organizations. They all produce a good percentage of their own private brands and have to have extensive product development teams. Moderate stores such as Penney’s don’t have much of an open market anymore. There are few moderate brands that have the ability to sell these consolidated behemoths. They were squeezed out over time by the retailers consuming selling space with their own products.

A top from JCP's fashion-right Mango line.

A top from JCP’s fashion-right Mango line.

Stores with private brands have to manage traditional merchandising and buying staff and have the ability to run creative design teams. These two functions are polar opposites and have a competitive tension between them. Great design comes from truly gifted and visionary talent. In many companies, it  a considered a common trait. Often unqualified merchants are given creative authority over programs with dreary results. In-house design can become too insular, as well. Unfortunately, for the most part, private label apparel is subject to large committees of leadership, all who put their stamp on the offer. Subsequently, they can water down the soup and create brands with stolen or missing identities.

There is a good assortment of fresh dresses.

There is a good assortment of fresh dresses.

For Penney’s to really transform beyond price selling, they must have the ability to create authentic desirable brands, not generic names with me-too styling. Their true prospects rely on their ability to hire or partner with the best design talent in the industry. This is the Target playbook.

JCP has well represented the active trend.

JCP has well represented the active trend.

On my recent trip to Penney’s, I saw some real green sprouts of change in the environment and merchandising. The stores are less cluttered, brighter and have better housekeeping. In some areas, I felt like I was in Bloomingdale’s or Nordstrom, but at Target prices. Kudos to them, the place feels younger, more upscale, and alive! Some of the featured fashion was an exciting value. It is a much more pleasant place to shop.

The store is a tale of two cities now. They still are devoting a large swath of the store to Liz Claiborne and other missy product. The missy area is a dead zone for most companies, as they don’t really understand how to address the multiple lifestyles of an aging population. This is a core customer for Penney’s, so it will require real introspection. I have little faith that the upcoming Liz Claiborne concept shop will move the needle. This brand has been rehashed for years. (Formerly Liz Claiborne, Fifth and Pacific changed their name and sold their ailing namesake.) It will be an enormous challenge to give this line an appealing and authentic personality. They are also banking on Izod, Levi’s, Buffalo and their in-house basics for third quarter apparel introductions. This is hardly an exciting apparel roster, ditto for the upcoming fall Royal Velvet home shop.

Some compelling contemporary separates.

Some compelling contemporary separates.

I am much more intrigued with upcoming home introductions from Jonathan Adler, Terrance Conran, Michael Graves and Bodum in the home area next year. The current home assortment is painfully mainstream.

Sephora is still their ace card. I give them credit for their large department of trending active wear, big selection of dresses and pretty tops. The Mango department is hip and enticing. All important handbags are uninspiring, but shoes hit on most of the trends. The fine jewelry department is very old school. They will be introducing accessories by Betsy Johnson, Vivienne Tam and Lulu Guinness for fall. There are also some very cute kid’s clothes. Young families will be core constituents of the new Penney’s.

Target and Kohl’s should be very worried about Penney’s transformation, especially Kohl’s, if Penney’s get the missy area on track.  The new Penney’s has the potential to be a low-end Nordstrom. So far I see hope and change beyond my expectations. Stay tuned.

Dix&Pond is the blog of Dix&Pond…creative and strategic consulting for retail, wholesale, analysts and investors. Contact us for more information on custom research and reporting.

She doesn’t have to have it….

For the past several years women’s apparel sales have been lackluster. Handbags and shoes have taken the spotlight and continued to outperform while apparel languishes. The excitement in shoe and bag design is palpable. Designers have continued to up-the-ante in footwear and bags, in bold colors, fresh materials and pushed the limits on new shapes. Confidence has spurred a creative explosion in these categories. This has added up to multiple seasons of big personality accessories winning hearts and wallets, in a down cycle of consumer sentiment.

Women’s apparel is another story. Here are several reasons for the depressed fashion phenomenon.

There is a lack of creative risk taking in apparel by wholesalers and retail merchants; call it retail sameness, fear of failure, wholesale and retail firms have a bad case of stage fright. They’re driving with eyes in the rear view mirror and trading down on quality. Many look to the past for the future and figure the safe road is the way to hunker down. Recessionary assortments of apparel are a counter intuitive bland diet for a customer with no appetite. Consumers have to be stopped in their tracks and wined and dined with fresh novelty and must-have styling.

There is a dearth of contemporary brands for the wealthiest segment of the market. Boomers+ have the money, but there is a lack of fashion forward casual brands suitable for the aging customer. This segment must choose between dowdy mature offerings or “do I look foolish” in this uber-short contemporary dress? Consequently, they turn to forward accessories to look current without looking like a sorry soul. This is an opportunity to reach a big underserved market.

Size matters. There is a lack of larger sizes for an “expanding” population of all ages. Women bigger than a size 12 or 14 can’t find much in most specialty or in mainstream areas of department stores. A huge part of the population is literally ignored. Larger women have to turn to the democratic accessory and beauty departments for a fashion update.

It is frustrating to shop for apparel in traditional store formats. Most women today are strapped for time, have short attention spans and an overwhelming sea of options. It is difficult to shop for an item, when most department and specialty stores are organized by collection.  If she needs a white top, she is forced to shop a whole store or department to find the item. A harried consumer will bypass department stores for the ease of shopping a simpler format with item depth, like J. Crew. Handbags, shoes, cosmetics, jeans and lingerie tend to outperform other areas. These departments are classifications, not collections and easier to shop. Part of the rapid growth of online shopping is that it simplifies the process. It quickly nets the offer to classifications.

The best accessories come from wholesale branded companies like Prada, Kate Spade, Tory Burch, Longchamp, Coach, Michael Kors, to name a few. Bags and shoes are two areas where there is little private label. Consumers are validated by brand authenticity and the inherent status of branded accessories. For the most part, private label apparel is subject to large committees of leadership, who all put their stamp on the offer. Subsequently, they can water down the soup.

Accessories are the easiest way to update last year’s wardrobe. Apparel like accessories, is an emotional buy. It is unfortunate that most traffic doesn’t covert to a sale, only a disappointed customer. Compelling merchandise is the key way to improve conversions. If wholesaler and retailers continue to offer vanilla assortments, the consumer will continue to spend her disposable income on the latest accessories and technology.

 The following pictures are “best-foot-forward” displays from some major retailers. Their brand identities are indistinguishable. Do you think “she’s gotta have” this merchandise?

Dix&Pond is the blog of Dix&Pond consulting…strategic and creative product development and brand consulting.

Another Approach for Ann Taylor?

Designing a line of clothing is like putting on a Broadway play every season. Sometimes the new one is better than last season’s, sometimes not. It is nearly impossible to have a continuous upward graph when creating a new product line in the notoriously fickle fashion field. The Recession of the past several years, has put retailers on the defensive and exacerbated the issues.

Ann Taylor window, March 2012.

Ann Taylor window, March 2012.

Ann Inc. just reported fiscal 2011 results. The larger Loft division reported a 10.5% increase in total comps (including all channels), with an 8.1% in store comps for the year. In contrast, Ann Taylor had a 1.1% total comp increase, with a 10.9% decrease in store comps. CEO, Kay Krill is promising improvements at Ann Taylor…”among the number of changes underway, we are evolving the assortment in-store to offer her a better balance within each category, including more color choices, greater versatility and more depth in key fashion items and marketing looks. In addition, we will be offering more depth and breadth in opening price points in virtually every category to provide her with even greater value.”

I have soft spot for Ann Taylor. In my early career, the brand defined upscale fashion for ladder-climbing women. I was an ardent fan. In my heart, I still want them to succeed. As a designer, industry insider and former alpha-customer, the myriad problems are obvious to me.

In my opinion, they responded to the Recession with sparse inventory, lower quality fabrics and abdicated core basics. Colors have been hit or miss, at times exciting and occasionally, thoughtlessly unwearable.

The big advantage of specialty retail and e-Commerce is that these channels are easier to shop than department stores. Busy women don’t have time to search the collection-based apparel assortments of department stores to find a basic tee, a pair of black pants or a great white shirt. Interestingly, the best performing areas in department stores are sold in categories, handbags, shoes, jeans, cosmetics, dresses, etc. The problem is specialty retailers keep trying to offer collections vs. understanding shopping simplicity is one of their core advantages.

Ann Taylor used to be reliable for a decent assortment of well-made, consistently fitting casual and dressier pants. They also were a great place  for terrific white shirts from basic to highly styled. Who could tell they weren’t from Theory? You could count on deep inventory in quality tees for the season; who needed J Crew? Shoes became boring and generic, the day they parted ways with Joan & David.

Ann Taylor should be a contrast to Loft, with better quality, more sophisticated products. Loft is doing well, but why try to compete head on? As a former Ann Taylor fan, the Loft quality never did it for me. Ann Taylor today could be any one of a number of faceless specialty chains. Some thoughts for improvement:

Offer a better value to the customer thorough improved fabrications, not lowered prices. Ensure depth in the core replacement basics needed every season. What about a permanent white shirt area like an Anne Fontaine? How about a basic pant area that carried the core styles of the season? Create a section for tees, where white would NEVER be out of stock. Add more compelling bags and shoes that are less concerned with price and more focused on fashion and quality. How about some traffic-building accessory brand names such as Brahmin, Tory Burch, Longchamp or Kate Spade?

It is time to take a counterintuitive, novel approach to change the fortunes at Ann Taylor.

Dix and Pond is the blog of dix& pond consulting

Low inventory levels are obvious at Ann Taylor.

Low inventory levels are obvious at Ann Taylor.

JC Penney Ante

Update June 19, 2012

The first casualty of the “dream team” assembled by Ron Johnson to turn Penney’s around is out. Michael Francis the former Target exec hired by Johnson as president in October 2011, is leaving the company. Someone had to take the fall. He leaves with more than $15 million in salary, severance, etc., not bad for 8 months work. In May, they reported a 20% drop in sales. I still contend it comes down to great product before illusionary marketing.

May 2012

I wrote this original post in February. Yesterday Penney’s came out with a$163 million dollar loss, which was more than double what analysts expected. The COO said there was a 10% drop in store traffic, 5% drop in conversion and a 5% drop in spending per customer. All of this happened in spite of their recent national ad blitz. In my opinion the cart came before the horse on their “everyday low price” strategy. The exciting, modern ads sent people to see the same old zombie merchandise assortment, without a coupon!

I’m rooting for them, as I applaud their gumption to reinvent moderate department store retail. It will be a challenge in their sector as there aren’t many coveted wholesale brands in their level of the market. Retailers effectively put them out of business a long time ago with their own private label. It all comes down to the product, and they will have to create it.

February 2012:

On a visit to J.C. Penney’s this week,  I was struck by the enormity of the renewal project Ron Johnson (the former Apple executive, new Penney’s

J. C. Penney’s February 2012 Promotion

CEO) has ahead of him. February marks the beginning of the huge new initiative to make this retail behemoth brand relevant. Undoubtedly, he is filled with optimism as he comes from two companies that made their own outsized luck, Target and Apple. These two companies have strong identities and strategies, that rewarded them with brand greatness. Target invented the “hip mass retailer” with their real designer collaborations and cool marketing. No mass retailer had ever taken this approach. Apple has arguably the most dynamic and transformational product line ever created; customers will line up and sleep in the cold to be first to get their new introductions. Ron Johnson is “betting the ranch” that he can transform an enormous, faceless, moderate department store into an exciting retail brand experience.

He started by cutting back endless promotions in exchange for everyday low prices. The jury is out on this strategy for me, as consumers react to a call-to-action by a promotion and love the “art of the deal”. Walmart has everyday low prices, but they struggle in fashion categories such as apparel, as uninspired design isn’t desirable at any price. Will the consumer feel the everyday low prices are simply an inexpensive store, with inferior merchandise?

The store felt more colorful and bold contemporary graphics were placed around the perimeter, defining departments.. They have taken to the airwaves with slick, modern ads à la Target or Gap in their heyday. Do these images promise something that the stores are not yet ready to deliver? See Penney’s website.

A colorful presentation by the mall entrance.

It all boils down to the product. There is SO much apparel in their stores and the consumer can’t be fooled. The problem is that most of it is in-house, private label with meaningless labels. There were pockets of appealing fashion, like the “on-trend” women’s active apparel area. Shoes hit on the dominant trends. Mannequins in the dress department were outfitted with flimsy garments, some with puckered seams. Housekeeping was unevenly clean, very sloppy or absent in some areas.

The best thing they have going for them is still the Sephora department. (I still marvel that they were able to score the sizzling beauty brand.) The long-term strategy is to reassort the store into compelling departments of viable brands. The problem is marquee affordable brands don’t really exist anymore. Over the years, as retailers started making their own insular products they effectively trumped most of the moderate wholesalers. They shut themselves off from the creativity and variety of an open market.

Target’s strategy isn’t new anymore. Real designer collaborations are still a successful way to add authenticity and design credibility to a retailer, that makes most of their own products. There is virtually no way to get credibility without doing collaborations, as there aren’t wholesale fashion brand names in their price points, that create apparel, accessories and home products that consumers crave. When was the last time a 35-year-old woman waited in line for new Alfred Dunner apparel (one of JC Penney’s wholesale brands), like they did for the Missoni collaboration at Target? J. C. Penney will fail if they try to be “Target cool” or safely, mature Kohl’s. I think the opportunity is to position themselves as the “Nordstrom for the mass market”, a fashion department store with some real strength in shoes, bags, beauty, accessories, apparel and home. Nordstrom has the ability to tap the entire creativity of the better and designer wholesale markets. They offer established and up-and-coming brands and punctuate them with their own quality private labels. Penney’s doesn’t have the advantage of being able to access premier fashion brands.

Penney’s is in a game of product poker and the consumer won’t fall for the bluff. They will have to allow real creativity and autonomy to the various in-house design groups. The customer will reward them for a shopping experience that ups-the-ante with some authentic fashion risks and unexpected offerings. It is all about the product.

Dix & Pond is the blog of Dix & Pond Consulting

Create a free website or blog at WordPress.com.

%d bloggers like this: