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Marshal Cohen, co-president of research firm NPDFashionworld, is the man with the numbers much of the industry relies on for insight into consumer attitudes and behaviors — and those numbers don’t generally bode well for department stores. In his presentation, Cohen offered data from a survey of 4,276 consumers conducted exclusively for the WWD/DNR CEO Summit that illustrated the drivers behind this trend and the various characteristics of each channel’s shoppers.
Understanding where shoppers are spending their apparel dollars is crucial today, given that the overall market shrank 4 percent between 1999 and 2000, noted Cohen. “Apparel has the dubious distinction of being the only business that we track that did not recover in 2001,” he explained. While dollar volume declined 6 percent in that period in department stores and 10 percent in national chain stores, mass merchants like Kmart, Wal-Mart and Target experienced just a 1 percent drop.
Beyond the competition between higher-end and mass market channels, Cohen detailed wide-ranging changes in overall shopping patterns that are affecting retailers of every stripe. One of the most important is that people are shopping 10 percent less often than they did just three years ago. Today, the average shopper goes looking for new clothes once every two to three months. Only 8.7 percent of survey respondents said they go shopping at least two to three times a month, while 20.9 percent went shopping just twice a year or less. “Guess what — shopping is no longer a leisure activity, today it’s considered a chore,” warned Cohen.
One momentous statistical change that retailers seem to have ignored, to their detriment, is the literal growth of the American consumer — not as a market, but in actual girth. This is evidenced in the fact that in 1985 the most popular women’s size in sportswear was 8. Today, it’s 14 — but the fashion industry hasn’t quite caught on to that fact and most prepacks still come with more 6s, 8s and 10s than 14s.
Some retailers have successfully capitalized on the growth of the U.S. women’s plus-size market, and others are moving quickly to tap this segment of the population. But it’s not as simple as it might look, warned Cohen. In fact, only 24 percent of women are a traditional plus-size; 12 percent are plus/tall; 13 percent are plus/petite; 26 percent are petite; 10 percent are tall, and 15 percent are not a special size. “I have only seen five retailers who carry plus/petite sizes,” said Cohen, three of which were mass merchants.
One area that mass merchants have been especially effective in capturing is children’s apparel. In the NPDFashionworld survey, 53 percent of respondents say they shop for children’s apparel at mass merchants, while only 5.2 percent said they did so at department stores. This fact is meaningful because while parents are at Wal-Mart or Target shopping for the little tykes, “they are learning about all the other values they can find for themselves,” said Cohen.
While department stores have made a concerted effort to attract younger customers — at times moving young men’s and juniors’ departments to the front of the store — it’s the AARP set that continues to favor department stores, while more baby boomers shop the mass merchants. For example, the survey showed more consumers aged 55 to 64 said they shopped in department stores than at Target, while more shoppers aged 25 to 34 said they shopped at Target more than at department stores.
One advantage department stores have traditionally enjoyed is that their customers spend more on fashion purchases than the average consumer. Of consumers planning to spend at least $500 on apparel over the next 12 months, 32.7 percent said they shop in department stores, while 14.4 percent said they frequent Wal-Mart, 17.3 percent shop Kmart and 22.6 percent shop Target. However, for shoppers who plan to spend between $101 and $500, the figures are practically dead even, with all the figures ranging between 69.2 percent and 71.7 percent.
What advice does Cohen have for retailers in this newly competitive world of cross-channel shopping? “Department stores need to compete via brands, not just price promotion,” said Cohen. Private label brands, for instance, should not just be about price point, but about identifying the target consumer and building brand equity with that group.
“Product differentiation is absolutely one of the major issues facing the industry today,” added Cohen, which means vendors need to create wider assortments to offer unique merchandise to their various retail partners.
But Cohen noted that some department and specialty stores were succeeding at differentiating themselves. “Saks has done a great job. Bloomingdale’s is in the process of doing a great job. And Dillard’s just opened up their new concept in Greensboro, N.C.,” he said. “Macy’s West, Chico’s and other stores have gone back to what makes a specialty store work. People are recognizing that you can’t be something for everyone and that it’s better to be something for a few and at least stand for something.”