Just how have fashion shoppers been crunched in the recession and what are they going to do next? Drapers provides the answers
Jason Kemp, Managing director, Envision Retail
Jason Kemp is in little doubt that the credit crunch has had a huge effect on the way consumers shop for fashion. And while most pundits only offer anecdotal evidence, Kemp, managing director of retail consultancy Envision Retail, can measure the chasm in behaviour from pre-credit crunch to now. “In 2006, only 20% of customers would check prices before purchasing. Now it is 70%. That is partly an indictment of how profligate people were before but the change does underline the renewed focus they have now,” he says.
Kemp adds: “The number of products they engage with has dropped from 18 pieces to six. But customer conversion [when browsers turn into paying shoppers] has actually gone up, from 19% to 21%.”Making sense of the figures, Kemp says: “The customer has become more discerning and focused. Customers are now evaluating the value of a product and are performing a subconscious cost-per-wear calculation.” He adds: “It means retailers must price accordingly. Some can put prices up, particularly at the mid to upper level. It is not just about just putting a flat margin on. You can miss good sales because the price is too high or too low.”
At the value end of the market, price will still be the determining factor (“When you buy for £4 then it won’t matter too much how many times you wear something,” says Kemp), but at the upper end there are more factors - quality and style will determine how much people are prepared to pay. Enduring, classic styles can carry a premium, which those garments that trade off a fast-moving trend may not justify.
The time/value equation also determines how shoppers interact with staff. “There is a 60% drop in how much interaction customers want with staff,” says Kemp. But he warns against cutting staff levels. “If a customer wants something, they want it now. If they need to ask for a style and there is no one to help, they are likely to walk out. Three years ago, a shopper would browse and find something else,” he says.
SOCIAL NETWORKING is ON THE RISE
The popularity of social networking sites is rising. During March 2009, 8.6% of all UK internet visits were to retail websites and 9.8% were to social networking websites. A year earlier, in March 2008, the figures were reversed.The proportion of traffic that online retailers receive from social networking websites - such as Facebook, Twitter, MySpace and YouTube - increased from 5.2% in March 2008 to 7.1% in March 2009. Meanwhile, visits from paid search listings have fallen to 8.9% of all visits, down from 10.1% the year before.
- Source: Hitwise
On the hunt for vouchers
Internet searches for vouchers have increased by 143% on the previous year. In December 2007, 1 in every 140 visits to a typical retail website came via a voucher site - up from one in 200 only a couple of months before. Discount vouchers are proving to be extremely popular with UK consumers and will continue to have a big impact on the online and offline retail markets during the next 12 months.
- Source: Hitwise
The Winners in the recession
- Small indulgences Anything offering the ‘lipstick effect’. Purchases of small, self-treating items such as make-up rise when consumers forego more extravagant purchases.
- No-frills chic Glamour has been toned down in favour of a more natural style.
- Nostalgia Shoppers seek reassurance from familiar brands.
- Softer consumerism Bling is out, guilt is in. Even those that can afford to splash the cash are reining in their spending.
- Convenience foods More people are choosing to stay in with a ready meal rather than eat out.
- Comparison websites More of us are comparing prices on the internet in a bid to save money on bills.
- Health and wellbeing Looks set to be a resilient consumer concern as a result of the general feeling of uncertainty, and the interest in self-treating as a way of saving money.
- Source: Euromonitor
Consumers with a conscience
£175m Sales of ethical clothing in the UK have quadrupled
11% of UK consumers doubt accuracy of labelling on ethical fashion
20% of UK consumers bemoan the lack of availability of ethical fashion
23% of UK consumers say price is a barrier to them buying ethically
David Wolfe Creative director, The Doneger Group
The fashion world is on the brink of a paradigm shift in the way that clothes are created, marketed and sold, believes David Wolfe, creative director of trends forecasting company The Doneger Group. At the forefront of this shift is a change in the way people feel about fashion and about the world in general.
“Things will need to be special and to have longer-lasting value. After the 1930s crash what happened was that people wanted to dress as though they had money. But for a long time now people have been dressing as though they were poor - there have been the dress-down styles of jeans and T-shirts. No longer will people play at dressing down from their moneyed status.”
Women are more likely to be affected by this shift in dressing. “Women in particular feel as though they have been let down by the men who are responsible for the recession,” says Wolfe. “And for the past decade these women have been dressing in a sexy way - arguably to appeal to men. Now they want to take charge. So partly they will be more businesslike in their dress.”
Wolfe adds that consumers will also shun overt glamour.”We have heard stories of people going into premium designer stores and asking for plain carriers because they don’t want to be seen with expensive bags. Perhaps they think they will get lynched,” he says.
“Conspicuous consumption is over. Luxury has become quieter and people want things like artisanal luxury; they want to meet the artist that creates the one-off.”
But Wolfe guards against being too dour. “Look, this is fashion and some girls just want to have fun, particularly younger girls. There will still be colourful, sexy elements but they just won’t be the direction.”
The recession’s effects will last, believes Wolfe. “When we come out of the recession we will be in a different society, and the impact of the recession on the consumer’s mind cannot be underestimated,” he says.