Now that retailers have had a few months to translate holiday results into spring forecasts, experts say they are seeing specific trends arise — especially as shoppers struggle to balance family budgets with the big jump in gas prices. Marketing Daily asked Stephen Wyss, a partner in BDO’s retail practice, to explain the shifts in who’s spending time at the mall, what they’re buying, and why.
Q: You say shoppers are more patient. Why?
A: That was a very pronounced change this holiday season, with consumers shopping at record levels on Black Friday and Cyber Monday, going quiet for a few weeks, taking their time to sniff out the best prices, then shopping again at record levels on Christmas Eve and the day after. They have learned they can wait out the retailer. And while that trend emerged during the recession, there are now more tools like mobile phones and iPads to do that. So retailers tried to counter that with flash sales and promotional events, but now shoppers are even patient about those. They’ll say, ‘Yeah, it’s a good deal on RueLaLa but I bet I can get it on Ideeli next week.’ Then it’s been such a mild winter, which stuck a lot of stores with excess inventory, so there’s more cat-and-mouse potential.
Q: You say this is also a sort of defining period for the moderate consumer. What do you mean?
A: This is a really interesting positioning issue, especially on the apparel side. Increasingly, we have seen the moderate consumer, which is a huge swath of the American public, having a bit of an identity crisis. On one hand, they don’t want to go to the Gap anymore and pay $30 for a sweatshirt that isn’t anything special. They’ll go to discounters for that kind of basic fashion, and get a nothing-special shirt at a much better price. And they’re also being increasingly tempted by near-luxury brands offering more moderately priced lines. So they can spend a little more and get something from Armani Exchange. In the months ahead, will moderate shoppers be more frugal, and save by buying clothes at discounters? Or be enticed by these newer, higher-end brands that are also moderately priced? For stores that cater to this middle consumer, including JCPenney and Kohl’s, but also specialty chains like the Gap, the Limited, American Apparel, and Abercrombie & Fitch, it’s a big question.
Q: Okay, men are buying more clothes, accessories and skincare products. What’s changed?
A: I don’t think it’s that American men are any vainer than they used to be, but growth in the men’s luxury market is outperforming women’s in all categories. Men are back and they are spending — and making more sophisticated purchases, which we’re especially noting in things like scarves and belts and other accessories. No more Levi’s and flannel shirts! For retailers, it’s an important growth opportunity, and some of the gains are because stores are doing a terrific job, making it easier and more accessible for men. And that’s the key. Retailers that can make it easier for men to shop will do better, because men don’t like to shop around the way women do. They like it to be easy. Mobile commerce, iPad apps help — but so does merchandising and marketing. Take Sephora: It has made it very simple and comfortable for men to walk in, get something new, and then walk out.
Q: But it’s a cosmetics store. That’s a pretty big sea change, right?
A: Yes, and I do think it’s a result of successful marketing. Ten years ago, no one would have marketed a body wash for men, for example. But when you look at brands like Old Spice and Axe, they’ve made it okay — even edgy and fun — for young men to use these products. And as they grow older, it will be much easier for them to trade up from those brands to a facial product that costs $50. They’ll see it as something that’s better, not something that’s foo foo.