No Risk, No Reward
This month, for the first time, Apparel magazine will produce a short Skype videocast in which industry experts, including Marshal Cohen, chief industry analyst for The NPD Group, will discuss leading-edge topics such as innovation, retail trends, consumer and technology trends and more. We think it will be a convenient and engaging way to get a current and very meaningful flavor of what’s brewing in our industry. (Watch for details.)
I’ve had the opportunity to hear Cohen on numerous occasions (including at Apparel’s events) and he’s always good at “thumping” us as an industry on the head a bit to ensure we aren’t falling asleep at the wheel. It was no different at last month’s American Apparel & Footwear Association’s (AAFA) Executive Summit in Washington, DC, where he spoke on “Consumerology” — a term, for which, by the way, he is seeking a trademark.
Cohen says we are experiencing “retail renovations” and that as brands and retailers alike we must renovate, communicate and invigorate. For example, he points to new shopping trends that have quickly established themselves — think really extended holiday hours and holiday self-gifting promotions. In fact, during the 2011 holiday season, 44 percent of shoppers bought for themselves (almost double from the previous year). Charge me guilty on that one…
And just what is making customers buy and how do they weigh value today? According to recent research from NPD Group, “brand names for less” is the No. 1 pick, ahead of “lowest price,” “more products for less” and “on sale.” That’s a shift seriously worth noting.
The problem is, fashion and footwear fashion are at the lowest rungs of YTD dollar sales growth. It’s probably not a surprise that mobile phones are No. 1. That’s followed by sports apparel, prestige beauty, small appliances, software, athletic footwear, toys, handbags, video games, restaurants, consumer tech and THEN fashion. We have to do better.
One of the obstacles, says Cohen, is that we have become risk averse. “Know the risk, and know the reward,” Cohen emphasizes, and resist the urge to always play it safe. He reminds us that color matters; to think innovation vs. basics; to take advantage of direct to consumer vs. partners.
It’s also critical to get service back into the equation. Cohen points to cosmetics as an industry doing an excellent job by virtue of the fact that it shows consumers how to use its products. “When’s the last time we did that in fashion?” he asks.
Something else to consider, says Cohen, is that social media is “a little more universal than we have been lead to believe.” Whereas older consumers have been judged as smaller players in this realm, Cohen says it’s not necessarily true. And looking at the total population, it’s worth reminding ourselves that 20 percent have used a smart phone or tablet to purchase apparel.
Despite the changes churning up our world on a daily basis, trust, convenience, relationships, extended services and unique assortments and product mixes are still vitally important. But there’s no question that we need more innovation to earn more of the consumers’ wallet. Think about your own products, services, channels and communications. What risks will you take to seek the big reward?
Susan S. Nichols is publisher of Apparel.
She can be reached at [email protected]
Editor’s Note: The 2013 AAFA Executive Summit will be held March 13-15. Visit wewear.org to learn more.