Apparel retailing is one of the sectors to be hit the hardest by the US economic slowdown of the last four years, as a result of US consumers holding back on spending the way they used to do before 2008.
Which is the reason all the more why, apparel retailers really need to examine themselves to stay relevant and interesting in these tough times, reveals an expert at a top B-school in the US.
According to the latest ApparelStats 2012 report released by the American Apparel & Footwear Association (AAFA), US apparel consumption dropped 5.3 percent to 19.4 billion garments by volume in 2011.
While volumes dropped over the significant gains made in 2010, the decrease in consumption, however does not represent a return to the recession-level consumption experienced in 2008 and 2009.
While US apparel volumes declined in 2011, the value of sales grew by 4.9 percent to a mammoth $283.7 billion at retail. The growth in value has mainly been driven by hike in retail prices due to increase in raw material, labour, transportation and other costs.
Speaking exclusively to fibre2fashion, Dr Brent Smith (Ph.D.) and Associate Professor of Marketing at Saint Joseph's University in Philadelphia says, “The two main factors for survival are value and variety. Apparel brands and retailers must maintain their value proposition at all times, regardless of the economic environment.
“Consumers are still demanding quality products, yet being more selective about which ones they will ultimately purchase. Thus, companies should expect many consumers to be more thoughtful about overall value, not simply lower prices or have clever promotions.
“Apparel consumers appreciate quality, whether they're sporting certain styles or admiring someone else doing so. On top of this, new business models are also coming from abroad. Competitors from Europe are trying to break into the lucrative American clothing market, and they’re bringing some unique business strategies with them”.
Explaining the new initiatives undertaken by European retailers, he informs, “TopShop which has offered it lines through Nordstrom in the US, offers Nordstrom’s younger consumers a chance to "Get cool British style," something that should create quality buzz for both brands.
“ZARA continues to become more popular in the US, successfully bringing its mix fast-fashion and on-trend styles to compete in a market that's often featured many generic staple garments, designs, and colours”.
His advice to US retailers – “The only true constant is change. And many established apparel companies are finding new models that run counter to the way they’ve been doing business. British style and fast-fashion are making very powerful inroads on that front.
“Apparel makers, such as Tommy Hilfiger, that sell their products through department stores have to listen carefully to store managers about what consumers want and no longer want.
“Apparel retailers, such as GAP and ZARA, which sell their own brand, must be relentless in learning and serving consumers who want cool styles, basic staples, and a must-have fun shopping experience”, he winds up by saying.
