Through a special arrangement, what follows is an excerpt from a current article from Private Label Buyer, presented here for discussion.
Retailers need to choose whether they want to target high end or low end consumers if they're going to survive because the middle ground of consumers is going away, said Doug Stephens, president of Retail Prophet Consulting.
With 35 percent of all sales accounted for by the top five percent of consumers, and the bottom 80 percent totaling just 39 percent of sales, the audience in between is losing its purchasing power, Mr. Stephens shared with the crowd at the Private Label Manufacturers Association (PLMA) annual meeting March 23 in Florida. "This is not about frugality. This is about coping and trying to get by," he said. "You used to want to be in the middle ... because that's where everybody bought. But you don't want to be there anymore because that group is declining."
That means companies need to decide whether they want to provide the concierge level of services, or whether they want to offer as much affordable convenience as possible.
"The market is polarizing between convenience and fidelity. Everything else in the middle is just average. That chasm where average exists is getting wider and wider every time. There's no middle ground. Well, there's middle ground, you just don't want to be there."