At the first signs of decline, Abercrombie & Fitch held fast to their brand and declared that they wouldn’t compromise their price point. They believed that their loyal customers would hang in with them. Well, the truth hurts.
The fact is teens are feeling the pinch too and Abercrombie saw a 19% decline in December. Their hugely popular Hollister store, known for its very specifically designed store environments, had a 25% decline in sales according to the Wall Street Journal.
The article suggests that the turn may not have as much to with price as it does with changing fashion tastes. However, similar lower priced retailers like Aeropostale saw a 10% increase. This has caused Abercrombie to examine, not only it’s pricing, but what it takes to satisfy their target shoppers. Unfortunately, they waited to make that connection and are late to market with the fashions their customers desire.
It seems the tables have turned and rather than pushing brands and trends on the shopper (the cool kids buy our stuff) retailers need to find out what the shoppers want and give it to them (just blue jeans will do).
This is an interesting peer into the future and yet another lesson from the economy.
2010 seems like such a futuristic number. Well the future is here and we are still uncertain as to what to expect. This is unchartered territory and the best minds are putting their thinking caps on to figure out what consumers are thinking and where retail is going at the advent of this new century.
Adweek released a report that is sure to be useful as we all get the ball rolling for the year. “Bringing Brands to Life” is a report on in-store marketing; required reading for brand managers, marketers and retailers.
“Marketers today are focusing on actionable content, easy-to-read signage, attractive displays and an appealing store environment to drive shoppers’ point-of purchase decisions. But finding the right in-store marketing combination remains a moving target since consumer behavior is constantly changing.”
NRF’s Chief Economist Rosalind Wells says “More economic indicators are turning positive.” In the latest edition, find out:
If economic growth will continue throughout 2010
The impact of the current housing market on consumer confidence
What the retail environment will look like this year
Miller Zell is very optimistic about the retail horizon. Shoppers will come back and we believe that retailers should get prepared for their arrival with new, fresh energy aisle to aisle.
Trendwatching recently released their predictions for next year entitled, “10 Crucial Consumer Trends for 2010.”
Consumerism has been through the ringer this year and everyone will be glad to see the end of 2009. But what does 2010 have in store?
Trendwatching.com touches on 10 behaviors it feels will persist and grow based on a look at how attitudes and technology are shaping our brand perceptions and decision-making processes. However, it’s clear to say that these 10 are not the only ones that will persist. This report is an interesting read as we all get ready for the new year.
After you read it, let us know your thoughts? Is there one that seems more on target than another? Are they way off base? We want to hear your thoughts about consumer expectations as well.
There are only a few major confectioners, six to be exact. And currently there’s a four-on-one cage match underway to see who can come out on top of the heap. The world’s major players in candy are Mars/Wrigley, Cadbury, Nestle, Kraft, Hershey and Ferrero. Mars bought Wrigley last year for $23 billion securing one of the largest brands in the business and the number one spot in the industry. This year, the rest of the industry has set it’s sights on Cadbury. With Kraft throwing the first blow, Nestle, Hershey and Ferrero are now expressing interest in acquiring the historic British confectioner. The reason it’s turned into a war is because Cadbury is well aware of it’s worth and will not go easily.
According to Mark Scott’s article for BusinessWeek, the candy industry is consolidating and there are few places left to target for growth. Miller Zell conducted a focus group earlier this year with shoppers aged 16-35 where we asked about their behavior when it comes to making candy purchases. Most of the respondents, event the teen group, admitted that candy purchases are typically relegated to holiday and gum purchases. Most indicated that health was a consideration in their candy purchases and while most candy is viewed as empty calories, gum is a necessary oral hygiene accessory.
So where does this leave these confectioners? In emerging markets like India; which brought Cadbury a 16.1% revenue increase last year. Scott reports that emerging markets have an “insatiable appetite for candy [which] is fueling double-digit market growth.” No wonder Hershey and Kraft want in on that action. The predominance of their candy sales are domestic. The western hemisphere only saw a 5.2% increase in candy sales last year. Kraft actually reported a 5.7% decline.
Scott goes on to detail why this fight for Cadbury is important to the other companies and the candy business overall. However, in the grand scheme of things, it’s interesting to watch the consolidation of this particular category. One has to wonder, if over time it will continue to significantly diminish in size, once the rest of the world adopts the western way and decides that the joys of candy aren’t worth the calories or cavities. Do you think that the candy category will eventually go away as a major business and be reduced to a segment within a CPG? Can you think of any other products categories where major players dissolved to segments of larger diversified consumer companies?
Display & Design Ideas magazine visited JCPenney’s new Manhattan mall store in Herald Square. We’ve covered the store here before which drew quite a bit of attention for invading Macy’s territory. It’s opening in this particular location was perceived as a sign of the times and consumer desire for value.
Store manager Joe Cardamone is interviewed in DDI’s piece and identifies price, style and service as the hallmarks of the new JCPenney. Although this was heralded as JCPenney coming to Manhattan, the video does a good job of capturing the Manhattan style elements that have been incorporated into the store environment.
Google is operating in the cloud and the company is looking to get the rest of us to do our computing up there, as well. The company announced the launch of an online store for business applications that run over the internet. What effect will the Google Apps Marketplace have on internal company application management? […]
Cheil Worldwide launches One Agency global below-the-line and retail networkMedia AsiaHeadquartered in London, the new network's offering includes experiential, retail, shopper marketing, digital and outdoor expertise to allow clients to ...Cheil Worldwide launch London-based start up One Agency to bring new level of ...ADOI magazineall 2 news articles […]
This month's Shopper Marketing magazine features an interesting article on a P&G program dubbed "Store Back," which encourages the firm's plethora of media agencies to consider the retail environment when coming up with marketing campaigns. Noting that big media ideas dished up by highfalutin traditional agencies don't always tra […]
Interbrand Design Forum, released it’s Most Valuable U.S. Retail Brands report, the second annual ranking of the top 50 American retail brands. Walmart claimed top honors as the most valuable retail brand, followed by popular retailers Target, Best Buy, and Walgreens. Intriguingly Private Brand is the underlying theme in many of the retailer explanations app […]
At the first signs of decline, Abercrombie & Fitch held fast to their brand and declared that they wouldn’t compromise their price point. They believed that their loyal customers would hang in with them. Well, the truth hurts.
