What does it take to compete in an off-price retail world?
New research from The NPD Group is quite clear. Roughly two-thirds of all consumers who shop for clothes do so at off-price outlets. Their purchases represent 75 percent of all the clothing purchased across all of retail.
Drilling down, older consumers (45+) make up more than half of those buying apparel in off-price stores. Older Millennials between 25 and 34 make up about 16 percent. Each group increased its share of off-price purchases in the last year, according to NPD.
Shopping visits to off-price merchants increased four percent year-over-year in April. Roughly half of all visitors to these locations made a purchase.
“Consumers are clearly looking for better deals and they know if they shop at an off-price retailer they will get them,” said Marshal Cohen, chief industry analyst, The NPD Group, in a statement. “Apparel shoppers are finding just what they want at off-price retailers at the right time and at the right price, and that isn’t always the case with department stores.”
Many department stores, including Kohl’s, Lord & Taylor, Nordstrom, Macy’s and Saks, have opened their own off-price businesses as consumers have shifted their buying habits. Those moves, however, have not benefited each chain’s primary business.
NPD’s findings are important when considering that many chains are counting on apparel sales to help boost their sales and profits during the key back-to-school selling season.
Macy’s is counting on throwback fashions along with some do-gooding to help it boost sales during back-to-school.
The department store chain is pushing fashions for kids and teens that harken back to the nineties. Junior girls, for example, will find “grunge style” plaid shirts as well as distressed jeans and overalls. Macy’s is also planning a series of nineties-themed events in its stores to “prove everything old is cool again.”
Macy’s has also teamed up with Elton John and Lady Gaga to create the Love Bravery limited edition line of clothing and accessories. Promoted as perfect for back-to-school, 25 percent of the purchase price goes to benefit the Born This Way Foundation and the Elton John AIDS Foundation.
- Two-Thirds of All Retail Shoppers Shop Off-Price, Reports NPD Group – NPD Group
- Fashion Rules at Macy’s for Back to School – Macy’s Inc.
DISCUSSION QUESTIONS: Are off-price chains making department and specialty clothing stores irrelevant in the minds of the vast majority of consumers? How do you turn consumer attention away from off-price outlets if you run a department store or other full-priced business?