As the end of the first decade of the 21st century approaches, we find a slowing economy and a world heading for recession, but what does it mean to consumer? Let's take a minute to consider what apparel retailers and brands are facing as we embark upon a new year: the economy is on a slippery slope, the business environment is uncertain and the consumer base is getting increasingly diverse, informed, and technologically savvy and demanding. In these uncertain times many brands will struggle with their products. This time is indeed considered to be the time when individuality and innovation is essential to the future of the brand. While recent economic times have led to a slowdown in consumer spending and a decline in the overall success of the retail industry, there are still significant opportunities to be had in 2009.
In order to take advantage of the opportunities, changes should be put into place to give consumers exactly what they need in order to make this happen. These opportunities are listed as nine trends for Apparel retailers and brands as quoted by Mr. Sudhir Holla, Client Partner, Infosys Technologies, "When you have a brand that works for people, you should work the brand".
Nine trends for Apparel Retailers and Brands:
1) Increased focus on customer loyalty and gross margin key to surviving recession
Plummeting home values, rising unemployment and a credit squeeze mean that the freewheeling spending attitudes of the past have been replaced by a very cautious closefisted consumer. "Mindful of every penny being spent, consumers will cut back on trips and concentrate their shopping in a fewer number of stores, bringing benefits to retailers with strong loyalty programs".
As lower overall consumer spending will result in severe pressure on retailer margins, protecting gross margin through loss prevention, price optimization and inventory management systems will be key focus areas.
2) Shift from channel-centric to customer-centric mindset
Retailers have traditionally focused on improving the efficiency and experience within a channel. Most apparel retailers have a separate business unit for stores and a separate business unit for their online business and in several cases, the product offering is also different.
Now the online channel will be replaced with a brand across multiple touch points -stores, online, social commerce sites, blogs, mobile devices, etc. Successful retailers will have to invest in understanding their customer across these touch points and provide a consistent brand and service offering across them if they want to remain successful in the coming year.
Cross-channel capabilities such as "buy online, return at stores" will be taken for granted by consumers. Retailers will have to come up with value-added services for consumers across these channels that can not only help establish brand loyalty, but also help deliver value to their customer base.
Retailers are increasing their consumer touch points through social media applications. In November 2008 J.C. Penney created a "Beware of the Doghouse" viral campaign that portrays just what can happen when a husband makes poor gift choices for his wife.
Part of the campaign's success was attributed to its multi-faceted approach and how viewers could access it via Bewareofthedoghouse.com, Facebook or YouTube. Victoria's Secret's PINK brand is geared toward high school and college age women and one of the primary ways it reaches its audience is through its Facebook page.
These campaigns all illustrate how retailers are increasingly employing creative tactics over social media channels to effectively reach consumers to build buzz and brand loyalty.