Clothing Retailing - UK -
Future Opportunities
Trading down but what next?
The Mintel
Inspire trend ‘Smart Shopping Gets Smarter’ is about interconnection and
uncertainty. The advancements of the internet have empowered consumers with
choice, whilst the economic climate has demanded that they wise up and become
competitive in seeking out the best deals.
Mintel’s
exclusive consumer research shows that the 25-54s are not only the most likely
to have traded down in the recession, but that many have traded down to the
lowest common denominator – the value retailers. But what can those retailers
do to hold on to new and old customers alike?
●
A
good starting point would be to establish whether there is anything customers
particularly like about the store and product offer other than ultra low
prices. For instance, TK Maxx is one of few value fashion retailers that
attracts equal numbers of men and women. Is there something about the ‘no
frills’/warehouse merchandising style that particularly appeals to men, or does
TK Maxx just have a better menswear offer? Certainly, there is scope for other
value retailers to up their game in menswear.
●
Spain’s
Grupo Cortefiel has recently launched a range of ‘comfort clothing’ at its
Springfield chain aimed at hard up young people who are going out less. Could
value retailers tap into the same trend in the UK, particularly given rising
numbers of unemployed? Pyjamas have already made something of a comeback as
loungewear according to some retailers, but this could be developed further.
●
Cocooning
indoors can create demand in other segments too – notably lingerie, which at
the top end of the market Agent Provocateur was alive to from the start.
●
Should
value retailers start to court longer term consumerism by rewarding repeat
buying over a stretched period of time? For instance spend an average of x per
month and get a discount on everything bought over the course of a year.
●
People
tend to mostly buy clothing when they need something or when they see something
they like. Planned spending is typically less common. But this makes it
difficult for consumers to budget. Promoting the idea of spreading payments for
something you know you will need eg. school uniforms or a wedding dress would
be particularly helpful for hard pressed families and a year long purchase plan
could work well for instance.
●
Agency
mail order worked on similar principles but, when credit became so widely
available, this industry went into long term decline. But consumers struggling
to manage their finances might appreciate better mapped out forms of credit,
especially in the current climate of uncertainty and restricted credit
availability.
●
However,
there would have to be an implied guarantee of the best price at the right
time. This way the less affluent customers could get what they need when they
really need it, rather than spending large amount of money to capitalise on
Sale periods.
●
Should
value retailers be doing more through the internet? Researching online helps to
drive footfall to the high street. But, for example, it also allows people to
try on garments at home – older and larger sized shoppers may prefer this.
●
They
may also be more inclined to experiment with new styles when they can do so in
the comfort of their own home. Moreover, they can see how a new purchase works
with the rest of the wardrobe and thereby helping to identify if it’s value for
money.
●
Value
retailers can not afford to let the supermarkets gain a competitive advantage
in e-commerce. But finding a way to trade profitably online is tough with a low
price/low cost business model. Perhaps they should eschew home delivery,
particularly as free delivery and free returns are gaining traction in the
mainstream. Instead, they could focus on a free ‘click and collect in store’
service to contain costs for themselves and their customers.
●
A
community facility online would allow like-minded consumers to share shopping
and wider budgeting advice and tips. Wal-Mart is already moving in this
direction in the US with its Elevenmoms social network.
The middle market
must fight back
Mintel’s ‘Trust
in Me’ trend highlights that trust and relationship really belong to the same
family. So increasingly as consumers we will be weighing up each interaction
with a brand or service in those terms. Which will we invite further into our
lives, and which will be refrain from forming a relationship with?
Sales through the
big mid-market fashion names like M&S, Next and Debenhams have been
squeezed by the success of the value retailers. To an extent, we believe they
have been prepared to sacrifice market share to protect profits and investment
potential. But what can these retailers now do to rebuild relationships and
re-ignite interest and loyalty to dovetail with the upturn, albeit an upturn
that will be slow and fragile?
●
John
Lewis recently announced plans for a value range starting in homewares but to
be expanded into fashion basics next year. There is the risk of undermining the
Never Knowingly Undersold policy and the John Lewis brand itself and there
might be better ways to emphasise value.
●
On
the other hand, perhaps it can draw from the experience of sister chain
Waitrose and its success with the Essentials value brand. Moreover, it might
just work as a reason for tentative customers to return and at a time when some
could be tempted to trade up selectively too.
●
John
Lewis will certainly shake things up by shifting perceptions about offering
cut-price products to a different kind of audience. Could M&S do something
similar? It has developed some compelling private labels. But there is no
dedicated entry price brand in fashion, although it does have a value range in
home textiles.
●
The
mid-market players could also do more to help people find their own unique
sense of style and dress as, according to Mintel research, one in three online
shoppers have no clear idea of what they are logging on for when they embark on
a potential shopping spree.
●
Their
audience is less likely to fear being different than young fashionistas.
Indeed, there is a growing movement towards individuality as the internet opens
up a more global and less seasonal marketplace.
●
Moreover,
that desire for individuality is gathering pace as consumers start to tire of
the ubiquitous fashion looks that value retailers inevitably promulgate. People
are much more likely to buy something spontaneously if they really like it and
if they think they are unable to find it elsewhere.
●
John
Lewis’ online fashion relaunch and M&S’ web store are starting to move in
the right direction. But most mid-market sites still have some way to go before
decoding the latest trends and selling stock in an integrated and easy-to-use
way, something that Net-a-Porter does so effectively at the luxury end.
●
Conversely,
we believe that as consumers’ expectations rise, a bad online experience will
increasingly affect loyalty, not just to the web store but to the brand’s high
street stores as well. So, retailers must continue investing not just in the
virtual shop but the online experience as a whole, in order to nurture long
term relationships.
If you want Dissertations on Clothing Retailing in UK, Contact Mahasagar Publications.
