For any apparel and fashion retailer, it is very important to understand and identify the needs of their market. Market segmentation is a process they often indulge in to distinguish their customers into different categories based upon certain pre-determined characteristics. Delving into get consumer insights by gaining information on age, personalities, preferences, gender, professions, and income can help retailers target and promote their products better in a specific market.
Thanks to such market segmentations, fashion brands have created categories like maternity wear, kids wear, teen wear, and apparel for older generations. But many brands are now tapping new markets and creating a demand for their merchandises in not just their conventional demographics by conducting in-depth studies in order to reap better sales. However, one root cause for changing and focusing on different market segments is the change in demographics. The newest and the latest generation fashion brands across the globe are targeting are the new millennials or the "echo-boomers".
Echo boomers are widely defined as the generation born between the years 1980 to 2000. According to Accenture research, the approximate spending of this population will be $ 1.4 trillion by the year 2020 and will account to a share of 30 per cent of total retail sales. While on the other hand the study also reveals that the baby boomers generation will decline by 20 per cent in the next seven years. The current economic downturn has however, affected the upcoming next generation of spenders by causing unemployment and job losses.
The millennial are sought after to be the largest demographics spending on fashion apparels and electronic gadgets. Based on a study done by Bloomberg Business Week, shoppers aged between 25 to 34 spend 8 per cent higher on apparel than the ones aged between 35 to 44 years although they earn 22 per cent less. The amount of fashion brands focusing to market products to teens and the population in their twenties has been growing tremendously. Brands such as Abercrombie & Fitch, Urban Outfitter, American Eagle, Forever 21, Hot Topic, Rue 21, Pacsun, and Aeropostle are emphasizing on leveraging sales from a similar demographics.
Many luxury brands all over the globe so far have been marketing their products to urban adults but slowly their focus is shifting towards young urban males. Until now luxury clothing brands were making and selling products to rich middle aged women, but with time they have realized through analysis and research that young metro sexual men are the future of retail. They have grown to be extremely conscious of what they are wearing and do not hesitate in spending on expensive clothing. Moreover, this segment over the time has become nothing but demanding and these young men like to stay in trend. With young males marrying later in life and working in blue chip companies, they have enough income to dispose on high end garments. Brands like Burberry, Michael Kors, and Coach are all looking into the transition in demographics and gender keenly.
The echo boomers are extremely tech savvy, believe in staying connected through social networking, and want services and products that are a click away. But the real untapped market as long as e-shopping for apparel retailers are concerned, it is not the population between 18-34 but the ones in their 50s and 60s. These baby boomers constitute a group of wealthy population and hold 70 per cent of the disposable income in the U.S alone.
Baby boomers are not what they used to be. This segment of the market are into fitness, enjoy being healthy, and looking young. Above all this, baby boomers also want to stay trendy and fashionable. However, there are very few apparel retailers who provide age appropriate clothing and fashion to this segment of the population. This makes it quite evident that the actual spending power rests in the hands of baby boomers while the echo boomers for now have to worry about jobs as a result of the economic meltdown.
Another interesting insight is that baby boomers are also equally active on the online shopping front. Many apparel retailers like Saks, Ann Taylor, Old Navy, Nordstroms, JC Penny, Macy's, Gap, and Coldwater Creek have begun focusing on online as well as in-store collections for baby boomers to remain stylish and upbeat. Besides the casual wear category, high street fashion and luxury clothing retailers are also considering this much ignored yet potential spenders to be the target market for their products.
With change in lifestyles and behavior of people and the way they use technology to shop and gain information about various products, have a huge impact on their purchase patterns. Apparel retailers today are using data obtained from different resources through feedback and purchase trends of consumers to move away from the conventional market segments and identify new ones in order to increase sales and have a wider reach.