market POLARISATION
Muted volumes mean changes to consumers’ spending habits too, which is pulling fashion retail in two direc- tions – value and premium. The white paper reveals that the shape of the sector is more polarised than ever before. Value retailers control 22.4% of the clothing market while ‘high street premium players’ account for 7.3%. The two can happily co-exist: shoppers’ determination to spend less keeps the value groups’ tills ringing. However, when fewer items are being purchased it means that when consumers do decide to buy a new item they will frequently go for quality.
Despite the rise of bargain-hunting, low prices on their own are not enough, says Saunders. Consumers make more subtle judgements about what represents value. That dynamic explains why Primark, which success- fully combines value and fashionability, has continued to grow successfully but other low-price retailers have struggled or, in some cases, collapsed.
And the volume shift in the market is likely to limit the potential of some low-price specialists in the present climate, Saunders believes.
He says: “At the value end there’s only room for a few players and one is Primark. The volume is not there to support all these value players.
“It was fi ne when there was growth in the market but there are high barriers to entry now. You need colossal volume – you can’t dabble.”
why, even in
While low prices were mentioned by 61.7% of consumers asked about what drives their choice of stores, high quality was the second biggest factor and cited by 47.4%. That illustrates austere economic times,
retailers
that can justify a premium on their apparel are still doing well.
Saunders explains: “There’s an attitude of ‘buying right’. People want something that lasts.
“A lot more people are reusing things. Rather than buying a lot of stuff every season they’re buying one item that complements [something they already have].
“That doesn’t mean the fast fashion fi x has gone but, especially at the older end of the market, they’re taking care about buying and willing to invest in great quality.”
WHAT DRIVES STORE CHOICE (All numbers are percentages of consumers mentioning)
LOW PRICES HIGH QUALITY WIDE RANGE
SPECIAL OFFERS
AVAILABILITY CONVENIENCE SERVICE ONLINE OFFER
PARKING NEAR INSPIRING
PRODUCTS UNIQUE
PRODUCTS IN-STORE
SERVICES 47.4%
45.6% 45.5%
40.9% 36.5%
25.6% 24.4%
16% 16%
12.8% 3.3% Shoppers’ behaviour threatens to make life even more
diffi cult for middle-market retailers. The white paper warns: “One of the key problems is that they can often appear to be neither fi sh nor fowl, with neither particu- larly high prices nor great quality or inspirational ranges.” There are many ways that retailers can add value to
their fashion off er. From designer collaborations, as have been deployed by retailers including H&M and Topshop, to including extra detail on a product to justify trading up to the consumer. The store experience is a contributing factor too. As
well as helping to create an engaging off er, multichannel in-store experiences – such as those being developed by chains such as Aurora Fashions and Republic – also help close sales. What shoppers do not want, warns Saunders, is “ubiquity” – again something that some middle-market retailers may be susceptible to: “There might be rails full of a jacket for £100 and that diminishes the sense of exclusivity. It would be better to have fewer out and keep more in the back room.”
autumn 2012 11 61.7%
0%
10% 20% 30% 40% 50% 60% 70%
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