This holiday shopping season, retail analysts are bullish on the off-price segment and expect it to outperform traditional department stores. From a consumer perspective, the appeal is simple: fashion-forward apparel, footwear and accessories sold at 60 to 70 percent below department store price points.
As a result, the share of off-price apparel in the closets of shoppers has swelled to 15 percent this year, according to GlobalData, from 10 percent in 2008. Over the next decade, the share is pegged to reach 18 percent.
And while major retailers such as TJX Cos. Inc. and Ross Stores dominate the segment, the retail model of off-price is a strategy that all specialty retailers can deploy. Here, Tricia Barglof, the executive director of the Offprice Show, shares insights into the event, which convenes retailers and brands annually.
WWD: What’s driving interest in the off-price segment? Is it more than low price alone?
Tricia Barglof: Competitive pricing will always be the driving force behind the success of the off-price channel, but there’s more to it than just the low cost of products. Some retailers in the industry still mistakenly believe that “off-price” refers to cheap goods or last season’s styles. In reality, off-price products reflect the current season’s fashion, and are simply designed with cost in mind. We like to think that off-price is the niche in the retail market where quality meets value. After overcoming the stigma of “off-price,” almost every retailer will find that our sector is a relatable buying strategy that, in some level, will bring added benefit to their business through margin-building.
Offprice Show recently launched a new feature for elevated, unique merchandise, called Boutique. What’s considered “off-price” falls within a range of price points, and we’ve seen growth within the higher end of the price spectrum, at about $15 and up. Consumers are willing to pay a little more for an elevated product, but still value their savings on a normally high-ticket item.
Off-price is also a very fast-paced channel, which means merchandise that’s available today may be sold out by next week. Like boutique owners or buyers for major retailers who also must capitalize on deals here-today, gone-tomorrow, shoppers are excited by the happenstance discovery of shopping off-price. There’s a unique urgency in our sector that pushes consumers to purchase before the next person stumbles upon their find, and that’s continuing to push off-price forward.
WWD: Can smaller-sized retailers compete in the off-price segment — especially against giants such as TJX Cos. and Ross Stores? How? What strategies are required?
T.B.: Smaller-sized retailers can still develop a competitive edge against the off-price giants through several strategies. The best way to stay aggressive in the market is to continue buying products in the off-price channel. With the rise of regional markets and online buying options, it’s easier than ever to find the same products (or something very similar) that consumers are finding at the chain stores at a low rate.
At Offprice Show, we’ve witnessed a rise in custom labeling among smaller stores. With help from certain suppliers, retailers can add their own specially designed labels in the garment. This strategy gives customers the impression they can only purchase the product at that retailer’s brick-and-mortar or e-commerce store, instead of turning Amazon or the off-price giants for the same item.
Especially for small boutiques, VIP parties or pop-up events are driving interest, catching consumer attention and building customer loyalty. Catered experiences like these offer shoppers an exclusive experience that many large chains are still struggling to re-create. When paired with excellent customer service and unmatchable pricing, smaller business can command a larger presence in the market.
WWD: What can attendees expect to see and experience at Offprice Show this coming season?
T.B.: We have a very exciting upcoming few seasons at Offprice Show. Our next trade show is Feb. 3-6, 2020, at the Sands Convention Center in Las Vegas. Besides our growing Boutique section, returning attendees will notice that our Cash & Carry section has relocated from the Venetian Ballroom to Hall G, or the wholesale floor.
A new offering focusing on the beauty category will also be available for the February 2020 Las Vegas event. We’ll be unveiling more details in the coming weeks.
Offprice Show will once again host a market show in New York City at the Penn Plaza Pavilion, May 5-6, 2020. This convenient regional event will give the surrounding NYC area the opportunity to meet Offprice Show exhibitors from coast-to-coast, in a manageable 50-booth floor.
Our online marketplace, Offprice365, will continue to be open for business year-round at Offprice365.com. New opportunities are posted daily to the web site in various categories. Offprice Show attendees and retailers new to Offprice Show are welcome to apply to the marketplace to browse products, book appointments for an upcoming event and message exhibitors directly through the platform.
WWD: Who are some of the exhibitors and brands?
T.B.: At our next Las Vegas trade show, we’ll have about 450 Offprice Show exhibitors selling apparel, footwear, accessories and much more. A few notable sellers who will be showcasing product are: Angie, Very Moda, Exist, Henry Ferrera Footwear, Project Red and Fifty Street. Our exhibitors will have a selection of private label products and brand name merchandise.