WHICH WAY TO THE EMERALD CITY?
Byline: Edward Nardoza
There’s been a tornado in Kansas. Dorothy is lost, unhappy, feeling unloved. And as she finds her way into today’s retail landscape, she’ll be bored, to boot.
That’s Kurt Salmon Associates ceo David Cole’s take on the modern shopper — one whose odyssey is characterized by widespread apathy, missed opportunities and ultimately, lost sales for retailers.
Based on Salmon’s Apparel Solutions research conducted exclusively for the CEO Summit and its Annual KSA Consumer Outlook Survey, the industry has much work to do, Cole told participants.
“Dorothy is searching for the Emerald City and we have to use our hearts, brains and courage to get her there. The consumer’s priorities are changing,” Cole pointed out, noting half the time shoppers leave stores empty-handed.
Lack of time, retail consolidation, abundant choices and aggressive sales have wrought more cross-shopping and led to unimpressive conversion rates, from shopper to buyer, of 36 percent — a number that “hasn’t improved in three years.”
In fact, Cole pointed out, “Dorothy’s basket is empty” more often than not, despite the fact that she has “a clear idea of what she wants to buy” when she enters the store.
“We’ve spent five years talking to consumers around the country about why her basket is empty,” Cole said, “and here are the top 10 reasons:”
1) She didn’t like the styles.
2) She couldn’t find anything, due to stock-out.
3) Nothing ever fit.
4) There was no knowledgeable sales help.
5) She couldn’t get in and out quickly.
6) Prices were too high.
7) The experience was too stressful.
8) She didn’t find good value.
9) The store was not merchandised the way she wanted to shop.
10) She didn’t want to buy a bathing suit in February.
Any of these points can spell doom for a retailer, and Cole cautioned executives that if they lose the first time, they’ll rarely get a second chance. “Only one in five times will Dorothy return to your store to look for that item.”
Adele Kirk, KSA’s director of consumer research, doing her best ‘Dorothy’ impression — minus the pigtails — described today’s consumer as “hip, smart and savvy…She wants all of us to understand her. She wants styles that suit her tastes and fit her lifestyle,” stressing the “emotion of looking good.”
The industry is still off the mark in meeting those needs. KSA’s research of 1,000 male and female consumers nationwide, age 21 and over, found that two-thirds of women and one-third of men feel apparel makers “don’t make clothes that flatter our bodies anymore.”
For women, she noted, shopping is an emotional experience, while men take the practical approach. “Women want clothes that flatter their figures [91 percent], are comfortable [88 percent], make them feel good [81 percent], will last [78 percent] and are easy to care for [74 percent]. Men, on the other hand, want comfort [88 percent], durability [85 percent] and versatility [67 percent].
“The lifestyle brands that have found that connection have succeeded, as consumers want their apparel to mean something to them, to say something about them,” Kirk stressed. “Sixty-three percent say they would buy a brand that reflects their personality,” and that emotional connection virtually removes price from the priority list, as 84 percent said they would pay more for such a brand.
And the days of outfit buying are numbered; 62 percent of women are more likely to buy items “to create a multitude of wardrobes.”
Versatility is a key component of the value equation that’s rounded out by “longevity and wearability.” In fact, 81 percent would buy things that last, regardless of fashion trends, and 65 percent are willing to pay more for classic looks. They view clothing as an investment, “not only in money, but in time.”
Service, Kirk noted, is defined as “how easy it is to get that item, factoring in time, stress and enjoyment” of the shopping experience.
“Old, disposable apparel,” she continued, “and price, price, price days are long gone.” As a result, women are buying more items that are versatile and seasonless. “They don’t want to replace what’s in their closet, but enhance what’s in there.”
Case in point: “Colors that coordinate. How often does a woman buy navy pants that don’t match the navy blazer she bought a year ago? And 60 percent find that clothes don’t fit right.”
The average consumer, Kirk noted, “is a size 12. That means 50 percent of those people are bigger than size 12. They want brands, and to feel and look good, too. It’s an ego investment.”
KSA’s prescriptions come at a time when “80 percent of consumers think retailers don’t care about them anymore,” Kirk stated. Most would shop more often at a store that offered loyalty programs — “not just an announcement of sales….Give her extras, such as a fashion consultant. That would help save time. Time is a commodity: Forty-five percent would choose more free time over more money.”
“Dorothy wants you to change — how we buy products and how these products are stocked and shelved. Two-thirds of consumers told us they shop by category or end use or occasion, but only 15 percent shop by brand.”
“They want to shop in season: Eighty-four percent complained that stores get their best seasonal merchandise before they want to buy it. They don’t want to buy a wool coat in August.”
“The consumer,” Kirk continued, “has a clear picture of what the shopping experience should be,” and places a premium on customization, individual attention, personal control and technology.
And this consumer is highly receptive to once-futuristic concepts such as electronic commerce, body scanning and self-checkout. “One-third said they’d pay more to get their product customized — and not just in tailored or hard-to-fit items, but in the basics, including shirts, shoes, intimate apparel, jeans and casualwear.”
Citing a further study, KSA’s “Millennium Readiness Profile,” Cole concluded that the industry is more evolved on the operations end than the emotional end. On a scale of one to five — one, worst; five, best — the industry rates a two on consumer connectivity, but a three in supply-chain efficiency.
Tactically, the industry needs to “build that [consumer] connection… the wallet follows if you connect the heart.” Cole urged makers and retailers to create “consumer-based measures.” Traditionally, the industry accomplished this by identifying its top 10 vendors, gross margins, sales per square foot and comp-store growth. The formula needs to evolve into one that’s consumer-focused; know “your top 100 consumers, sales per square foot, POS trends. And you’ve got to create a compelling memory… Products come and go, but emotion and experience is lasting. Consumer intimacy pays off.”
How can such goals be accomplished?
“We need to make major changes in processes,” Cole noted, offering a few predictions of the future landscape that will force such change.
“Today’s product lead times are 40 percent less than they were five to 10 years ago, and in five to 10 years they will be half that.
“In-stock will be 97 percent physical and 100 percent virtual. If an item is not in the store, in 24 hours it will be there.
“One-third of product will be customized, whether it’s a dress or a blouse or a sleeve on a shirt.
“Inventories will be two to three times more productive.
“Information systems will be intra-industry and you will share data in an open world.”
“A decade ago, communism ruled half the world and cell phones were rare. And Wal-Mart was a $20 billion company. Things change, and change fast. If you collaborate, the supply chain can drive key changes,” Cole urged the audience.
“Think of change as the status quo.”