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Squeezed Consumers Spending Less on Apparel

NEW YORK — Companies targeting moderate shoppers face a significant hurdle in their marketing efforts: These shoppers have a lot more on their minds than just clothes.<BR><BR>Spending by moderate women shoppers — traditionally defined as...

Moderate brands like Bandolino have to compete with a host of economic concerns for consumers’ dollars.

Moderate brands like Bandolino have to compete with a host of economic concerns for consumers’ dollars.

WWD Staff

NEW YORK — Companies targeting moderate shoppers face a significant hurdle in their marketing efforts: These shoppers have a lot more on their minds than just clothes.

Spending by moderate women shoppers — traditionally defined as 28 to 40 years old with household income of about $25,000 to $75,000 — slid over the past year, according to data from market research firms.

Moderate shoppers’ spending on clothes slipped 2.3 percent to $4.9 billion for the year ended in May, according to STS Market Research, which gathers its data through a poll of 12,000 consumers questioned each month. STS data were based on women ages 28 to 40 with household incomes between $30,000 and $80,000 a year.

Observers attributed this decline to moderate shoppers focusing their outlays on other priorities.

“This segment of the market looks economically driven,” said Art Spar, president of STS, based in Cambridge, Mass. “They’re buying more on sale, less at regular price. It just strikes me that, be it job-related, be it cost-of-living related, these women are trying to do more with less.”

Kim Kitchings, director of market research and planning at Cary, N.C.-based Cotton Incorporated, said, “Certainly, most of these families have children, and that just totally puts you in a totally different mind-set, as far as how important clothing is to you.”

That attitude is reflected in data from Cotton Inc.’s Lifestyle Monitor that shows moderate shoppers said they would rather be spending their money and time on things other than clothes shopping, when compared with other shoppers. (See Table 1.)

Research also found that moderate women shop in different channels than other shoppers. They were more likely to purchase in mass merchants and less likely to buy in department stores than women on average, according to NPD Fashionworld Consumer. (See Table 2.)

The NPD data also revealed that moderate women spend most of their apparel budget in specialty stores, which represented a growing chunk of spending — 30.2 percent for the year ended in June, compared with 26.6 percent a year ago.

Marshal Cohen, chief industry analyst at Port Washington, N.Y.-based NPD, said that this reflects selective shopping.

This story first appeared in the August 25, 2004 issue of WWD.  Subscribe Today.

“The consumer is sitting there saying, ‘Even if I can’t afford it, I will buy less but better,’” Cohen said. “Fewer purchases with better intentions.”

He explained that a moderate shopper might buy basic items, like underwear or a plain skirt, at a mass marketer, and dress up an outfit with a higher-end accessory or sweater from a better specialty store.

“It’s the new type of cross-dressing,” he said.

Several points in STS data illustrated the growing appeal of mass merchants for moderate shoppers. Wal-Mart Stores held the largest share of moderate shoppers’ apparel spending for the year ended in May, at 8.3 percent. It was followed by J.C. Penney Co., Kohl’s Corp., Target Corp. and Gap Inc.’s Old Navy division. (See Table 3.)

Another sign that pointed to growth in the mass market was the rising percentage of spending on items priced below $10. STS found that items less than $10 represented 32 percent of moderate women’s spending, up from 27 percent a year earlier. (See Table 4.)

Table 1
Priority Check
Moderate Women Shoppers’ Attitudes on Clothes Shopping
 
Moderate Women
Other Women
I would rather spend money on things other than clothing:
57%
47%
I don’t have time to shop for clothes:
31%
36%
I’m not as interested in clothing as I used to be:
52%
47%
Current styles do not flatter my shape:
59%
52%
 
NOTE: MODERATE WOMEN ARE 28 TO 40 YEARS OLD WITH HOUSEHOLD INCOMES OF $25,000 TO $74,999, COMPARED WITH ALL OTHER WOMEN AGES 16 TO 70
SOURCE: COTTON INCORPORATED’S LIFESTYLE MONITOR

Table 2
Spending by Channel
Percentage of Outlay for Year Ended June 2004
 
Moderate Women
All Women
Specialty Stores
30.20%
32.30%
Mass Merchants
19.30%
14.00%
Department Stores
16.30%
20.90%
National Chains
13.70%
12.90%
Off-Price Retailers
10.40%
8.80%
Catalogues
4.50%
5.30%
Internet
1.20%
1.20%
Factory Outlets
1.10%
1.20%
Other
3.40%
3.50%
NOTE: MODERATE WOMEN 28 TO 40 YEARS OLD , WITH HOUSEHOLD INCOMES OF $25,000 TO $75,000, COMPARED WITH ALL WOMEN SHOPPERS
SOURCE: NPD FASHIONWORLD CONSUMER PANEL ESTIMATES

Table 3
Leading Retailers
Top Five Chains by Dollar Share
Wal-Mart
8.30%
J.C. Penney
7.20%
Kohl’s
6.10%
Target
4.40%
Old Navy
4.20%
NOTE: MODERATE WOMEN 28 TO 40 YEARS OLD WITH HOUSEHOLD INCOMES OF $30,000 TO $80,000, FOR YEAR ENDED MAY
SOURCE: STS MARKET RESEARCH
Table 4
Price Comparison
Moderate Shoppers’ Spending by Price Point
2004
Under $5
5%
$5 to $9.99
27%
$10 to $14.99
22%
$15 to $19.99
20%
$20 to $24.99
10%
$25 to $29.99
7%
$30 to $39.99
6%
$40 to $49.99
2%
$50 and up
2%
NOTE: MODERATE WOMEN 28 TO 40 YEARS OLD WITH HOUSEHOLD INCOMES OF $30,000 TO $80,000, FOR YEAR ENDED MAY
SOURCE: STS MARKET RESEARCH