“Mindless excess is over.” So says Faith Popcorn, chief executive officer of marketing firm BrainReserve, when asked whether women will go back to their ferocious shopping habits once the economy fully recovers. “The entire consumer mentality has changed across the socioeconomic spectrum,” said Popcorn. “We understand and buy what we truly need, and we actually want less — stuff is clutter and we want simpler. We call it cashing out.” So is this the dawn of a New Consumer Age, as many experts contend, one that will force brands and retailers to make tectonic changes in the way they do business and transform the nature of shopping in America? Or is the consumer simply the same — just slightly different due to economic pressures? It’s a debate obsessing companies at all price levels and industries — from fashion to food to cars. Regardless of which side of the argument one falls on, it’s clear the shopping rules have changed and key trends include:
• The boom in e-commerce, making it easier for consumers to buy from home — and to comparison shop.
• Technology is now more fashionable than fashion — in other words, teens and twentysomethings would rather buy an iPad than a handbag.
• Social networks are driving real consumption, with friends telling friends about hot products or brands — meaning brands have to enter the conversation.
• The Great Recession has forced everyone, even the rich, to alter their shopping behavior and buy less.
• High levels of personal and household debt continue to constrict the Baby Boomers, who are looking for simplicity and value. “Women are somewhat more hesitant to loosen their purse strings — especially for nonessential items and major expenses that can wait,” according to “A New World Order of Consumption,” a Boston Consulting Group study. “Across all regions, they are more likely to seek out sales promotions, spend time shopping around for the best prices, and shop in discount stores.” The study noted consumers’ values and priorities are shifting. “Home and stability have taken on greater importance, while overt luxury and status have faded. The great hunt to find the best value at the lowest price remains firmly top of mind almost everywhere, particularly in Europe and the United States, where consumers enjoy the feeling of what they view as smarter shopping." read more
Fashion and art have a habit of mingling, but the crossover tends to be most vibrant when there's some money to play with. Remember when Karl Lagerfeld commissioned architect Zaha Hadid to create the Chanel Mobile Art Pavilion and sent it on a world tour? It was a bull market concept, if there ever was one. In the wake of the Great Recession, these grand creative collaborations seem part of a bygone era. But a flicker of that energy is on its way, in the form of Fashion's Night Out, a one-night-only shopping event slated for Sept. 10., in New York and elsewhere. In the city, about 1,000 stores will stay open late to offer in-house parties, freebies and a festival atmosphere. Now in its second year, Fashion's Night Out was launched by Vogue magazine, the Council of Fashion Designers of America and the City of New York as a way to give the fashion industry a boost during the downturn. Though the evening is devoted to commerce, it is balanced with an artistic side. A glance at the event's website, Fashionsnightout.com, which launches Monday, reveals that brands across the spectrum—from the popular (Anthropologie) to the Parisian (Balenciaga)—are exploring the interplay between fashion and the arts. One of the most direct connections will be at the City Opera Thrift Shop, on East 23 Street, where proceeds go to support the creation of new costumes for operas. In the past, City Opera has commissioned Isaac Mizrahi to create costumes for "Platee" and "King Arthur," as well as Zandra Rhodes for "The Pearl Fishers." This season, in conjunction with FNO, the upscale resale shop will present its annual fall preview on Sept. 10. To offer a glimpse at the creative process, the shop will display a series of costume sketches by top designers including Carolina Herrera, Isabel Toledo and Jason Wu. At the Balenciaga store, on West 22nd Street, a series of six self-portraits by artist Cindy Sherman will be on display from 8 p.m. to 10:30. Ms. Sherman, who is known for transforming herself into wildly divergent characters, dressed herself exclusively in Balenciaga for the portraits, which are on loan from the private collection of Francois Pinault of PPR, the parent company of Balenciaga. The portraits will be making their U.S. debut at the event, which will also include model Karen Elson singing songs from her first album, "The Ghost Who Walks," produced by her husband, rock musician Jack White. (Jazz singer Karrin Allyson is also slated to give a free performance at 6:30 p.m. on the second floor of the Time Warner Center, where shops will be open until 11 p.m. The appearance is a preview to her September shows at Dizzy's Club Coca-Cola.) Elsewhere, a site-specific installation is planned at the Yigal Azrouël store, in the Meatpacking district, where Mr. Azrouël is collaborating with the East Village-based artist and jewelry designer Megan Marrin. Together, they've been developing a project that has evolved from transparent, vellum panels to broken glass and black plastic wrapping. "I really wanted to work with him, rather than bring previous work in," said Ms. Marrin, adding that the sculptural work will be not be hung on the walls, necessarily, but rather incorporated into the store's cavernous space. read more
This week, Britain’s Telegraph reported on the recent luxury industry trend towards subtler, “anti-bling” collections that minimize conspicuous logos in favor of more low-key designs. According to the article, recent moves by Gucci to downplay its trademark “G emblem” have paid off, as the company recorded a surge in profits after moving in this direction. As Francois-Henri Pinault, chairman and chief executive of its French parent PPR, said: “Our groups are moving toward fewer logos, more discreet luxury. It’s a question of adapting our ranges very rapidly to this new perception of luxury, a luxury which is more subtle, more sophisticated.” Noting the visible “de-logo-ification” seen among brands known for over-the-top embellishments in the pre-financial-crisis days, the Telegraph cites a new study by Joseph Nunes, professor of marketing at the University of Southern California, which found that big spenders are “willing to pay a premium to have ‘quiet’ goods without a brand mark.” So there we have it: top luxury houses are largely moving away from ostentation and flash and towards more subtlety, sophistication and “quiet” indulgence. But herein lies a serious point of contention in the luxury world. Although luxury shoppers in established, recession-stung markets may gradually be lured back into stores by understated items bereft of obvious logos, will this trend appeal to potential buyers in emerging — and lucrative — markets like China, where garish still equals good? This is precisely the question asked by a number of Chinese luxury sites and blogs this week. The author of the New Express article, “Will You Still Buy Logo-Free LV?” predicts that it will be years for the logo-mad mindset prevalent in the Chinese luxury industry to change, and the ChinaNews article “Low-Key Luxury: A Hard Sell For Chinese Consumers” notes the cool reaction that many Chinese shoppers have had to understated items. The article also quotes a professor at Shanghai’s Fudan University who explains the “peripheral effect” that often dictates a Chinese shopper’s choices. From ChinaNews (translation by Jing Daily team):
At the Louis Vuitton flagship store at Shanghai’s Lippo Plaza, workers showed me that nearly all of the new products in the epi leather collection lack any obvious LV logos,and instead have only a small embossed LV logo in the lower right-hand corner. Nonetheless, considering these pieces all cost more than 10,000 yuan (US$1,476), they still belong to a high-end product line. [As one clerk told me,] “The new classic canvas monogram collection isn’t that popular with buyers. The most popular items are still those ones that have a prominent LV logo.”
A clerk at the Gucci store at Shanghai Times Square explained that the “Techno Horsebit” series, which doesn’t have any obvious logos, hasn’t had many buyers either.
The industry insider Frederick (no further name given — JD) recently said that when Chinese consumers purchase a luxury item, they’re not just buying the product but are paying for all of the added value denoted by this object — identification of status, display of economic power and so forth.
Cheng Shi’an, the head of Fudan University’s Advertising Department in Shanghai, believes that luxury brands rely on the “periphery effect” (外围效应) [in China]. If a luxury buyer’s coworkers and friends can’t tell the price of the brand, even if this person spent a lot of money on a given item, their satisfaction level will still be low.
Two government reports released Friday highlighted how far the economy still has to travel to full recovery, but offered signs the outlook is improving compared with last year. The U.S. Commerce Department said retail apparel sales fell in July compared with a month earlier, but specialty store and general merchandise store sales improved over last year. The Labor Department reported apparel prices were higher in July compared with a month earlier, but declined year-to-year, tamping down inflation fears. Clothing and accessories store sales dipped 0.7 percent in July to $18 billion compared with June, and department store sales fell 1 percent to $15.4 billion, the Commerce Department said. Sales at general merchandise stores, a category that includes discount and department stores, dropped 0.2 percent to $50.3 billion for the month. In yearly comparisons, specialty store sales advanced 3.8 percent, while department store receipts fell 0.8 percent. General merchandise stores saw sales increase 2.4 percent. “Household spending remains tepid amid concerns about economic stability,” said Jack Kleinhenz, chief economist for the National Retail Federation. “Current data on the economy is mixed, which signals that retailers will continue planning with caution until a long-term trend can be established.” July results were not alarming, said Kevin Regan, senior managing director and retail industry expert with FTI Consulting, but showed the depth of consumer reluctance to start spending again in the face of daily reminders that unemployment remains high and foreclosures still loom over many homeowners. Sales comparisons to July 2009 were easy, he pointed out, tempering the year-over-year boost reported in some categories, but there were still pockets of strength. Strong sale results this spring gave rise to muted optimism, “but that momentum is clearly lost,” said Regan, adding the last few months have brought the retail environment “back to earth.” In the overall economy, the sales gain was slightly less than expected at 0.4 percent in July compared with June to $362.7 billion, and advanced 5.5 percent year-over-year. Meanwhile, retail apparel prices rose a seasonally adjusted 0.6 in July compared with a month earlier, but declined 0.3 percent in 12-month comparisons, the Labor Department said Friday in its Consumer Price Index. Charles McMillion, president and chief economist with MBG Information Services, said it’s unusual for apparel prices to rise while retail receipts are down. “This makes perfect sense for consumers, but I just don’t understand retailers,” McMillion said, pointing out that, with shoppers focused on deals, any price increases could scare them away and drive sales down. Prices for women’s apparel rose 1.6 percent in month-to-month comparisons, but fell 0.3 percent compared with July 2009. Men’s apparel prices dipped 0.3 percent in July, but were up 1.1 percent from a year earlier. The overall CPI rose 0.3 percent in July compared with June, in line with expectations, and advanced 1.2 percent from a year earlier. The so-called “core index,” which excludes the volatile food and energy sectors, inched up 0.1 percent in July and advanced 0.9 percent year-over-year. “The July report on core consumer prices yet again points in the same direction — in competitive markets for goods and services there are absolutely no signs of any inflation pressure,” said Brian Bethune, chief U.S. financial economist with IHS Global Insight. read more