HONG KONG — Fashion’s obsession with youth is well-documented but that habit — a tendency to ignore less trendy consumer segments — is leaving money on the table.
That’s according to Mauro F. Guillén, a professor at the Wharton School, who serves as the Anthony L. Davis Director of the Lauder Institute, and Dr. Felix Zandman Professor of International Management.
At the Wharton Global Forum held here, he told WWD that fashion shouldn’t just be a young person’s game, and explained how less “sexy” consumer segments — female officewear, plus-size and Baby Boomer clothing, among them, can translate into big business.
WWD: Why do brands focus so much on Millennials?
Mauro Guillén: Two reasons: they are very different it seems, at least so far, in terms of their purchasing behavior. They have very little brand loyalty. The second reason, is that Millennials are young. If a company attract them and retains them, they can have a relationship with them for a very long time.
WWD: What kind of untapped opportunities do you see in the fashion business?
M.G.: There are segments, especially for the clothing industry, that are growing very fast. You need to pay attention to those. One is the population above 60 years old and we know they have different needs that includes clothing.
The other very important segment is women working outside of the household. If you remember in the U.S., there were companies in the apparel industry that catered to that segment. For example, I’m talking about Ann Taylor — think about 25 years ago. Zara these days is playing to that a lot. [It is an established consumer segment] in Europe, the U.S., but that’s a small part of the world. You will have the same thing happening in the Middle East, the same thing happening in Asia, and eventually Africa. We’re talking about billions of consumers. Focusing just on Millennials may be good for some companies but not all companies. There’s money to be made elsewhere.
WWD: What sort of changes and preferences could brands take into account?
M.G.: As you age, your needs change and people prefer maybe looser clothing. Besides the demographics of all these changes, there are two other things you need to take into consideration. One is this rise of the middle class. How do they want to make a statement about their new status? They want to dress differently.
The other category is technological innovation in the clothing industry. In my perspective, the one that’s going to have the biggest impact is nanotechnology. New materials, for example, that will allow me to wear this suit in the winter and also in the summer. It’s engineered material that adapts to the outside temperature. I think there’s a number of things that are going to be affecting the clothing apparel industry and a lot of what we take for granted today may be very different in the future.
WWD: As people age, they tend to gain weight. Is this connected to how the industry largely ignores the plus-size market?
M.G.: Right now in the world, there are more people suffering from being overweight or obese than people going hungry, which is crazy. Essentially, what we observe is that people who are overweight or obese spend less money on clothes. It’s not because they don’t have money to spend. That’s because the labels are not offering clothes for them.
What you have is smaller companies getting into the clothing business in that segment. People put on weight, especially men do. The other thing is your body shape changes. Men get a belly. As you age, and people are living longer and longer and longer, your body changes. Therefore what fits a 45- or 50-year-old probably doesn’t fit a 70-year-old. There’s a lot of room, I think, there for innovation.
WWD: What kind of companies are catering to the plus-size market?
M.G.: Roaman’s, Woman Within, Juno Active by Junonia, Plus Woman, Making It Big. Also, in the Chinese market, Taobao.com. They have made an effort to cater to the needs of overweight people.
WWD: What have you observed about the behavior of older consumers?
M.G.: People gravitate to more functional things that make them feel good as opposed to things that are more trendy or fashionable. This happens with automobiles, for instance. If you look at the cars people buy over the age of 60 — they purchase cars that are comfortable. Cars that are easy to drive, simple. People in their 20s and 30s prefer a different kind of car.
I think this happens across many different categories. The same happens with food. People as they age, get loss tolerant toward extreme flavors, spicy foods — they start focusing on just a few things. And the issue is that more and more of that market is going to be above the age of 60. It’s happening everywhere in the world.
WWD: When is China projected to have more old people than young folk? When does that happen for India, U.S.?
M.G.: If you define young as people 0 to 25 years, then China will have more people above age 60 than people 0 to 35 by the year 2055 approximately. But you do not need to wait that long to see the big growth in the population above age 60. India will reach that point in 2065, and the U.S. in 2060.
There are two Indias when it comes to these trends. Northern India is more traditional, where people still have lots of babies. Southern India is much more developed — that’s where the IT industry is, and there are more women working outside the household. But we are still seeing this process. It will go down the same path. It’s a huge opportunity.