American retailer Forever 21 is planning to launch in the UK market, reportedly on London’s Oxford Street. Falling real estate prices are encouraging some retailers to open up in markets that were already on the radar but maybe just slightly out of reach. According to Marino Donati in an article for Draper’s Online, Forever 21 has already been taking advantage of greater availability of retail space in the US. UK is a logical next step where fast fashion is popular.

The retailer has it’s work cut out, attempting to compete with well established UK shops in the same price point and demographic such as Topshop, H&M and Zara. However, the most interesting point in the article came from Edward Whitefield of Management Horizon.

“Whitefield says the US Retailer [Forever 21] will have to improve its in-store experience to compete in the UK. ‘The Forever 21 product is better than its store design, which it will have to think about, as we [the UK] have some smart shop designs which add value for the shopper.’”

Well, I never.

• “A major shakeout of retail chains is under way, as the bankruptcies of Circuit City, Linens ‘n Things, Mervyns and others make clear. What is less well understood is that an economic and technological tsunami has begun to force merchants into one of two camps: They must be either discounters that sell national product brands on the basis of price or stores that don’t need to discount because they offer uniquely compelling products and shopping experiences.” (This is who you want to be in order to sustain positioning after the recession ends.)
• “The result: Retailers that can’t compete on price or convenience have to find another way to differentiate themselves–with distinctive offerings, and with engaging customer experiences that drive home what’s compelling about those offerings.”
• “The retail territory of the next 10 years is truly up for grabs. New retail concepts, and even manufacturers that want their own stores, have big opportunities to become the big retail success stories of the next decade. Those that dazzle their customers with distinctive offerings and environments for purchasing them will thrive alongside the Wal-Mart’s and Amazons of the retail world.”

Very interesting!

Kenneth Hain at BrandWeek reports that “high- and middle-income shoppers are increasingly turning to dollar stores.” This, according to Nielsen Co. research presented at the Nielsen 360 Consumer conference, is a result of rising food and lifestyle costs. Jeff Gregori, vice president of retail services at Nielsen said in a statement, “Today dollar stores are delivering more consistent selection and value.”

Echoing the same sentiment, Retailwire reports that T.J. Maxx and Marshall’s teamed up in the “Re-Think Retail” campaign. Laura McDowell, spokesperson for T.J. Maxx and Marshall’s said, “We created this campaign with the intention of rallying consumers across the country to spread the word that you don’t have to pay a lot for great quality.”

The economic slump has earned a new crop of shoppers for the discount retailers however, as articulated by John Ryan at Retail Week, “Cheap products needn’t mean cheap-looking stores.” He sites Primark UK as a discount retailer who has successfully integrated into middle market shopping centers. 

T.J. Maxx seems to be on the right track by launching the new ad campaign at the same time that shoppers are looking for alternatives. However, they also need to overcome the issues that deterred those shoppers from visiting before and may cost them after the recovery. Many of the comments on Retailwire focused on the need to improve shoppability. Discount stores are notoriously cluttered, overwhelming, difficult to shop and low on customer service. As one reader put it, “All the advertising in the world won’t improve the experience.” Especially for the female shopper who rates the shopping experience as a prime factor in triggering a purchase. The obvious next step for dollar stores and discount retailers is to consider how to make their stores more appealing to their new customers…if they want them to stay.

Internet is choking newspapers.

Could in-store media make television advertising obsolete?

TV ad executives are scrambling to assure investors they’re not in trouble. However, CBS shares dropped nearly 13 percent after announcing a quarterly loss and revenue well below expectations. The network has even gone so far as to advertise to its advertisers.

In-store media and shopper marketing has its share of skeptics as articulated by Peter Breen at the In-Store Marketing Institute. Although television advertising is suffering in the recession no one is calling for its total demise, but the writing may be on the wall. Smaller ad budgets, shorter attention spans and TIVO-using, commercial-skipping television audiences are taking a toll. Prices of ad buys have dropped, however the creativity required to capture the consumer’s attention is at a premium. Adding more fuel to the fire are consumers asking the question, “What’s in it for me?” Frugal shoppers want to be convinced that a purchase is valuable. Dr. Pepper Snapple Group’s Rob Colarossi said at the In-Store Marketing Summit, “It’s not about the brands. It’s about truly understanding and looking through the lens of the shopper.”

According to Breen, retailers are catching on.  In his article, “What ‘Shopper Marketing’ Means to Me” he cites several examples of how retailers are implementing shopper marketing programs aimed at creating lift by catering to shoppers’ needs in the store.

Predicting the demise of television advertising may be a stretch. However, at the minimum a symbiotic relationship must begin to emerge between TV and in-store media. TV ads may get them there but in-store media makes them buy.

Trendwatching.com just released a list of “50+ new business ideas that defy doom and gloom.” The list of ideas includes unique ways to engage the consumer, beyond typical marketing messaging of “buy this, it will make you feel good.”  The story of the product integrated into the shopping experience, exploiting the “me” generation and making products unique to each individual consumer, connecting with consumer values i.e. sustainability and charity — these are just some of the angles that brand builders and retailers should be considering.

So change is good, but what about risk.  Risk is an integral part of innovation because the idea is to do something that isn’t proven. However, where you mitigate the risk is in the expert execution of the plan. Having partners witty enough to temper delightfully creative ideation with researched and fielded understanding of what’s on the consumer’s mind.  The ability to communicate with consumers in a way that’s focused, exciting and, most importantly, penetrating is what creates a breakthrough.