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Calkins explained that people now don’t say, “I don’t want a Louis Vuitton handbag. Now people say, ‘I really can’t have a Louis Vuitton handbag.’ My impression is the consumer wants haven’t changed, but there’s a greater understanding of the limitations.”
Furthermore, Calkins sees a greater divide among the economic classes.
He noted that people who are very affluent will still buy luxury brands, but there will be a greater divide among those who can afford them and those who can’t. He also feels luxury brands will have to decide if they want to trade down to reach more consumers. “Do they remain a true luxury brand even if they have to become smaller, or do they chase the consumer down and risk tarnishing their brand? The savviest brands will remain true to their position. But for those who have to hit their short-term numbers, it will be hard to remain a pure luxury play.”
Even luxury brands are having to adapt to the new landscape, however, beefing up their Web sites with e-commerce functionality and social networks. Experts believe the increased use of the Internet is propelling the evolution of the consumer as much as the recession.
“It’s a huge shift, particularly among the younger generations,” said Marc Gobé, founder of Emotional Branding. “That consumer has a completely different way of shopping that’s driven by technology.”
Gobé explained that what used to be loyalty to a particular department or specialty store “is being replaced by the loyalty you have to your friends. There’s no brand loyalty. They [brands] have to create communities. They have to make sure they’re not talking about themselves but that others are talking about them. It’s a 360-degree shift.”
Gobé acknowledged that a percentage of consumers are more conscious of what they’re buying and can’t afford it as much as they used to and are concerned about the environment, but another group of young women love to shop as much as they can. “It’s fun, interesting and socially rewarding,” he said.
He said lots of stores get it, such as Uniqlo and H&M. “They’re packed. They’re so dynamic and spirited. It’s like a party. They’re all buying and they’re sharing the information online with their buddies,” he said.
Gobé also noted there’s a need for more public events to create a conversation. “The biggest thing in brands today is: Unless the brand is shared, the brand is dead. If she doesn’t share it on Facebook and YouTube, nothing will happen,” said Gobé.
Gobé also believes that young people are forgoing apparel and accessories for the latest technology.
“Do I buy an app for my iPhone or do I buy a new pair of shoes? A lot of young women are buying apps before they buy the shoes. There are a lot more offerings outside of fashion and beauty that provide the excitement that fashion and beauty used to provide,” said Gobé. Recent Commerce Department data showed that spending on technology products jumped 1.8 percent in the first half, while spending in almost every other product category declined.
Amy Avitabile, senior vice president of marketing at Lord & Taylor, called the use of social networking a “complete game-changer.” Lord & Taylor is using Facebook and Twitter in nonpromotional ways. It also has a mobile strategy for messaging. While Lord & Taylor was late to the party with e-commerce (its site is less than two years old) “it’s the number-one trending door by a lot,” she said.
She believes there’s a certain customer who’s going to be brand loyal to a store, and those who won’t be. “It’s up to the retailer to provide the differentiation,” she said. Lord & Taylor’s new advertising campaign, for example, was created to reflect a greater sensitivity to the consumer.
“Our big message was to alleviate the guilt of shopping,” said Avitabile. “We don’t sell things she needs, but what she wants.” So the store developed the “Shop Smart” campaign, created by David Lipman with the tag line “Shop More, Guilt Less.”
“The new customer is smarter and a bit more savvy than she’s been in the past,” said Avitabile. “When we hit the reset button in October 2008, her appetite did change. We saw it in everybody’s comps. She’s price-conscious. What we’ve found is our customer is very much focused on value. For our customer, value is about getting great-quality fashion merchandise at a fair price.”
Intermix, the 24-unit contemporary chain, has also seen the customer evolve with the times. “I think they’re more savvy, more discerning and spending more cautiously,” said Khajak Keledjian, ceo. “They’re buying things they absolutely love — pieces with longevity that are more timeless and have good quality. They’re not buying as excessively as they used to shop.
“I think it’s the aftermath of having an excess of everything and the bubble,” he continued. “I like it this way better. It’s less confusing when there isn’t an excess of everything. You didn’t know the true reality.”
Yet Stefani Greenfield, founder and owner of My Next Act, pointed out consumers will never get tired of desiring attractive things. “The opportunities to spend and ways to spend are different. People don’t want the clutter and the stuff.” Greenfield said there’s necessity and desire, and whether or not you can spend, you never lose the desire. “You can buy a few investment pieces that have longevity,” she said. “So much product is polluting the market. We’ve overassorted. Stores are overassorted. We want to be more streamlined.”
She said there’s an opportunity to get true aspirational products at different price points. “They’re not going to max out 10 credit cards and put their house into foreclosure to get them. But the day that we don’t want to admire beautiful things is the day I don’t understand women,” said Greenfield, who has a show on HSN called “Curations.”