LEADING INDICATORS: Port Washington, N.Y.-based market researcher NPD Fashionworld has earmarked a handful of commodity items as harbingers of strengthening demand for fashion apparel, as sales of those basics have turned north in the 12 months ended March 31: intimate apparel, up 1.7 percent from the prior-year period to volume of $9.4 billion; men’s underwear, up 10 percent to $4 billion; socks, up 5 percent to $4.5 billion and footwear, up 6 percent to $43 billion.
Consumption of those basics typically serve as leading indicators of fashion purchasing activity, prompting subsequent transactions for a number of items that are likely to be color-based, NPD Group chief industry analyst Marshal Cohen said. Underwear and intimate apparel tend to wear out the most, thus are perhaps the strongest leading indicators of the bunch, as they get shoppers into stores most frequently.
As a result, for fall 2004, NPD is projecting dollar-volume growth 6 percent for fashion items and 3 percent for basics.
For the 12 months ended March 31, apparel sales amounted to $168 billion, down 3 percent from $173 billion a year earlier, according to NPD. — V.S.
LUXURY’S LEADING EDGE: “Luxury consumers began the new year feeling very positive about their financial well-being, but that moderated slightly during the first quarter of 2004,” said Unity Marketing president Pam Danziger. “The luxury consumers’ expectations for future spending on luxuries dipped in relation to their ability to spend.”
Although the decline in Unity’s luxury index to 97.8 percent from a baseline of 100 shows only a minor deterioration in confidence and purchase intentions toward luxury goods and services, luxury marketers still need to work harder to court affluent consumers, the Unity president advised.
Luxury consumers are far from being spendthrifts, observed luxury specialist Danziger, noting marketers need to better understand these “thrifty rich folks,” who are always on the hunt for a bargain. “These consumers do not spend anywhere near to their capacity,” she said. And this despite the fact the top 20 percent of affluent Americans earn 2.5 times the nation’s average post-tax income and spend 2.5 times more than average, Danziger added. — V.S.