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Product, Not Price, Key to Retail Success

Written by George Anderson
Okay, the headline is too simplistic. Everyone watching retail knows that while luxury goods may be booming, those products are being purchased by a small percentage of consumers. The fact is that large numbers of consumers in the middle and bottom rungs of the economic ladder are making purchasing decisions based on what they can afford.

All the above being said, most would agree with a Bloomberg News piece contending that retailers are going to have to offer something other than just low prices to drive purchases as people begin to feel better about their financial situations.

"It's got to be all about the product," Christine Chen, an analyst with Needham & Co., told the news service.

Claudio Del Vecchio, chief executive officer of Retail Brand Alliance, which owns Brooks Brothers, told Bloomberg, "Customers are looking for quality and value. They are willing to make the investment in something of better quality if they know it is timeless and authentic, which will endure rather than impulsively buying several trendy items."

Among the chains mentioned as gaining shoppers looking for something out of the ordinary were Abercrombie & Fitch, Coach, Lululemon Athletica and Urban Outfitters.

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