Sweet Somethings February 4, 2009

WHAT’S HAPPENING:
Tempting sugary treats aren’t just for dessert anymore as representations of mouthwatering confectionery are appearing on accessories, plush, graphics, print and more. Popular accessory areas include hair ties, necklaces, rings, brooches, bags and shoes. Running alongside the accessory craze is a strong interest in cake-based print and pattern most often seen on clothing, bags and stationery. Confectionery customization of electronic goods such as mobile phones is also hugely popular as items such as USB keys are made to look like the tempting treats.

Tote bag by Whimsy Press

WHAT THIS MEANS TO BUSINESS:
This may look like a short-term fad, but a closer look may reveal a more long term trend. For one thing, sweet motifs are appealing to a broad range of consumers. Plus, in tough times, people will always look for the little things that make them happy – and sweet treats certainly fit the bill. There may also be an element of backlash or rebellion to the increasing attention being paid to the obesity of America. The more people are told they can’t have something, the more some people will celebrate it. So it may be time to make room on your shelves for these sweet sellers before you miss out on your piece of the pie.

Designers get powerful endorsement January 23, 2009

WHAT’S HAPPENING:
Isabel Toledo and Jason Wu’s fashion businesses were given an enormous boost when new First Lady Michelle Obama, the second-most watched person on the inaugural podium, chose them for the two key occasions on her husband’s big day.
As she watched husband Barack Obama being sworn in, she wore a lemongrass lace shift dress and edge-to-edge coat by Cuban-American designer Isabel Toledo. Later in the day, (at one of the rumored 10 inauguration balls the new president attended), Michelle Obama wore a chiffon rosette-appliquéd and Swarovski-beaded white one-shoulder ball gown by 26-year-old Taiwanese-American Jason Wu, a designer little known outside fashion circles until now.

WHAT THIS MEANS TO BUSINESS:
As the youngest First Lady since Jackie Kennedy, Mrs. Obama’s influence on fashions can’t be overlooked. Obviously, these two designers have become instantly popular and demand for their lines has skyrocketed. Expect them to garner much more attention at the next Fashion Week and upcoming runway events. On a broader scale, this could be an early indication that our First Lady isn’t afraid to break with traditional, established names to seek out lesser known designers who appeal to her personal sense of style. Those in the fashion industry will have to stay on their toes to ensure they’re not caught off guard by her next surprising choice.

Heart strings vs. Purse strings January 21, 2009

WHAT’S HAPPENING:
With unemployment rising to levels not seen in 16 years, consumers have pulled back sharply on spending. So in attempts to entice cash-stricken consumers this Valentine’s Day, beauty brands are rolling out a host of specially created gift sets and limited edition products. Romance is taking a back seat as women are being targeted with a bevy of products that promise to seduce and empower. This translates to cosmetics in vampish scarlet tones with tongue-in-cheek titles. Limited edition packaging, with a price tag to match, also becomes a key focus. This transcends the mid- to uber-luxe markets, from Tommy Hilfiger’s pearl-embellished bottles to Caron Paris’ solid gold bracelet.

Clinique's Heart Lip Gloss Set

Rose Candle by Diptyque

WHAT THIS MEANS TO BUSINESS:
As consumers cut back on their spending and strive to form more disciplined habits, the “urge to splurge” occasionally becomes stronger. Holidays such as Valentine’s Day provide the perfect excuse for consumers to treat themselves to something special. Special gift sets and limited editions appeal to this need and provide an emotional reward, thus making it easier for consumers to justify their purchase without feeling buyer’s remorse.

Holiday Shoppers Storm the Internet January 7, 2009

According to a recent Forbes article written by Mary Jane Irwin, Purchases made online tallied $24B this holiday season, with sports and fitness spending up 31%.

Online spending this holiday season, from Nov. 1 through Dec. 19, has decreased 1.0%, to $24.03 billion, through Dec. 19, compared with the corresponding days in 2007, according to Internet stat tracker comScore. Dollars spent during the month of December increased slightly to $12.8 billion, from $12.7 billion last year.

On average, consumers have spent $643.0 million each day between Thanksgiving and Dec. 19, an increase of 5.0% compared with 2007. Dec. 9 remains the highest-trafficked day with $887.0 million spent online.

“With five fewer days of holiday shopping between Thanksgiving and Christmas this year, there is increasing pressure on consumers to make their holiday purchases in time for Christmas,” said comScore chairman Gian Fulgoni in a statement. “The combination of the compressed holiday schedule and the challenging economic situation faced by many consumers means that retailers have their work cut out for them this season.”

Gifts this holiday season are trending toward items that yield the most entertainment per dollar or are in some way reusable — in line with past consumer spending trends during tough times. People spend more time at home and less time out on the town, and their purchasing habits reflect that.

Through the first half of this month, spending on the sports and fitness category increased some 31.0%. Book and magazine sales were up 18%. Sales of videogames and related paraphernalia increased 17.0%.

Conversely, says comScore, sales of consumer electronics are slowing: Music, movie and video sales are down 24.0%. Spending on office supplies — no doubt a result of corporate belt tightening — decreased 19.0%, and spending on jewelry and watches is off by 17.0%.

Nomadic pop-up shop brings its goods to different neighborhoods January 5, 2009

WHAT’S HAPPENING

Where do all the pop-up retailers go when their rental leases are up? Luxe fashion label Iisli packs up its nomadic store and moves it to another location (WWD.com 9.22.08). Iisli’s 1,000 sq. ft. temporary store, dubbed ”the cube,” can be retrofitted into an empty retail space. It carries its own lighting, dressing rooms and shelving. It’s address is 25 Bond Street in lower Manhattan until February 1, 2008. The owners would like to see it travel to TriBeCa, Miami, Las Vegas, Tokyo or Berlin. WHAT THIS MEANS TO BUSINESS A nomadic pop-up shop could give consumers what they’re craving — access to cool goods and a better variety of brand offerings. Brands and retailers might benefit by reusing their temp store materials and testing new neighborhoods.

Brown paper packaging- tied up in string? January 2, 2009

WHAT’S HAPPENING

• The stealthy shoppers can get their threads, bags, heels and jewels delivered in an unbranded recycled brown paper bag — a sharp aesthetic turn from the retailer’s iconic sleek black boxes.
• Even the direct marketing email promoting the new packaging is a throwback to more demure times; a black and white pic shows two 1950s gals whispering, and the copy assures customers that the new bag will hide buys from inquisitive eyes.

WHAT THIS MEANS TO BUSINESS

• The financial shake-down has made elite shoppers more empathetic to the situation of the less fiscally fortunate, but they’re not entirely dressing down for the occasion. And those who can afford luxe labels are more sensitive to how others’ perceive their purchases.
• High-end retailers may want to explore providing discreet purchasing and packaging options so their customer can keep splurges to herself.

Beg Borrow or Steal December 31, 2008

WHAT’S HAPPENING

• When the going gets tough, the tough dicker for a better price. Consumers are beginning to embrace a range of unusual buying behaviors that will help them stretch a dollar further. Haggling, for example, is becoming fashionable again. Max Edison has become a minor media star — his 2001 book How to Haggle is on back order at Amazon.
• Why own when sharing or renting will do? Even in boom times, we noted the rise of fractional ownership, especially of prestige luxury items. Now that strategy is being applied to commuter cars, condos and even community department stores.
• We’ve mentioned that the mushy core of this economic swamp is the housing bubble. Through services like YouWalkAway.com, consumers can do just that legally and in a way that controls the damage done to their credit (NYTimes.com 2.29.08). They can approach home ownership less like marriage and more like dating. And why wouldn’t they? The annual average cost of renting is now lower than owning: $15,721 compared to $17,707 (Washington Post 11.25.07).
• Even before the economic downturn, “transparent recycling” was coming into fashion. While most Americans are not going to become freegans, digging through restaurant compost for their next meal, they are going to think twice about throwing out that old sofa.
• Another area where consumers are trading down in a big way: personal transportation. While car sales languish coast-to-coast, bicycle sales are actually up nearly 10%, and Shimano — the world’s largest bike parts manufacturer — set a new sales record in 2007 (BicycleRetailer.com 2.25.08).
• Five finger discount? A number of national chains report that shoplifting and employee theft are up significantly — as much as 11% in some areas (HometownAnnapolis.com 3.24.08). Not every consumer will throw her morals out the window with every dip in the Dow Jones. But thieves are finding more willing markets for hot, cheap goods.
• A penny saved is a penny earned. Yes, Americans seem to be dabbling in that most extreme and alien form of economic behavior: saving the old-fashioned way. Sixty percent of Boomers say they are spending less in the current economy (FOXBusiness.com 2.12.08).

WHAT THIS MEANS TO BUSINESS

• In tough economic times, smart marketers want to know what consumers are buying. But it pays to look at how consumers are buying.
• Don’t expect a sudden full-stop in discretionary spending. Do expect a certain amount of trading down, and higher levels of skepticism about what “luxury” and “prestige” really mean as value propositions.
• We’ve tracked the emergence of consumer interest in “überobscure” goods and services. That will amp up in coming months, especially where obscurity equals savings. Treasure hunting at pawnshops and garage sales could be almost as popular as the Olympics in Summer 2008.
• We’re talking about a fundamental shift into active, intentional, highly targeted consumerism. Consumers know the economy’s health rests with them. They know companies are hurting for business. They know their dollar can go further when they flex their muscles of free choice.
• Watch as consumers take a somewhat aloof approach in their buying behavior. You can’t haggle if you’re too enthralled with any particular item. Even “gotta have its” will be subject to price comparisons and value assessments.

Retail Leases Under Pressure December 30, 2008

NEW YORK — Retail lease disposition is showing signs of distress in this downtrodden economy. A record 8,000 to 9,000 leases have become available for distribution as a result of bankruptcies, liquidations and downsizings.

With more retail bankruptcies anticipated in the new year, available square footage is expected to grow exponentially. And with few retailers in expansion mode, there may be lots of dark spaces in shopping malls, strip centers and power centers.

Circuit City, which was to hold an auction of 154 leases this week, canceled the auction due to a lack of bidders. The retailer, which filed Chapter 11, hopes to reject the leases in bankruptcy court.

Mervyns, which was liquidated, had 150 leases up for sale. In sounder financial times, experts said the leases collectively could have fetched $50 million to $100 million. Only 46 Mervyns leases found takers for a total of $6.2 million.

Even healthy retailers are using the distressed economy to try to get rent reductions. “A retailer doesn’t have to be in bankruptcy,” said Ivan L. Friedman, president and chief executive officer of RCS Real Estate Advisors, which helps retailers evaluate their real estate portfolios, shed underperforming stores and trim occupancy costs. “Retailers are not renewing leases that they can’t get great rent relief on.”

RCS is marketing 165 leases belonging to the bankrupt Steve & Barry’s. “We are getting a few calls on [the leases],” Friedman said. “I don’t know what’s going to happen to them. In good times we could sell lots and lots of leases. Now, everyone is preserving cash. You’ve got no buyers.”

RCS has doubled or tripled its client base this year, Friedman said. “This is not a good time for anybody. I get 15 to 20 calls a day from retailers with companies that do $200 million in sales and up. Everybody says, ‘I need rent relief’ or ‘I want to get out of leases.’”

Andy Grasier, co-chief executive officer of DMJ Realty, said, “Generally when a space went back to a landlord it would get leased up within a year. It’s probably going to take longer to fill some of these vacancies than ever before. Landlords will allow some discounters that they normally wouldn’t have allowed into their centers. They’re going to try everything, churches, health-related services and schools. There’s going to be a lot of alternative uses. This is a fairly new phenomenon.”

Power centers may have trouble finding large tenants to replace big box pads. In some cases, the boxes are too big to subdivide. “Some of these power centers are going to rely on less occupancy from the nationals and will start focusing their efforts on some of the regional players,” Grasier said.  

“Landlords are being as flexible as humanly possible,” Grasier said. “It’s no secret that there’s little or no growth.”

Friedman also finds that “landlords are being very cooperative in reducing rents. I’ve done deals where I’ve reduced rents by up to 50 percent. A 20 percent to 30 percent decrease in rent for B, C and D malls is not unusual. Right now it is very much a restructuring environment.”

The glut of retail space can’t only be blamed on the economy. For years, retail experts have said that the country is overstored, but the industry for the most part ignored the warnings. Now, the problem of too much retail square footage has come home to roost. “The bottom line is that we were overstored for several years and that was during the good times,” Grasier said. “We’re in a very overstored situation.”
WWD

Shoppers haggle for deals from frantic retailers December 29, 2008

I found this recent MSNBC article very interesting.  Now I’m kind of bummed I didn’t ask for any better deals- especially since one quote from the article is “You would have to be a moron not to ask for a discount!”  Ouch… oh well, this MORON only shops online- so it’s kind of hard to ask someone on ebay to discount their 2 year old camera I “won”!  Merry Christmas Eve!!!  Here are a few highlights from the article.  To view the entire article click here.

With holiday sales possibly the worst since the industry began annual comparisons in 1969, stores are increasingly willing to do whatever they can to get rid of merchandise — even offering discounts on the spot.

NEW YORK – If you’re looking for an extra bargain before the holidays, you may only have to ask. With holiday sales shaping up to be the lowest in years, possibly the worst since the industry began annual comparisons in 1969, retailers say they’re taking consumers’ demands for good deals seriously. Some are extending return policies, while others are matching competitors’ prices. Many are volunteering on-the-spot discounts and even letting customers haggle prices well down from what’s marked in a desperate bid to make the cash register ring.

Allen Chen, a part-time cashier at a J. Crew store in White Plains, N.Y., said shoppers with two-month-old receipts are asking for partial refunds for items now on sale. Normally, the store’s policy is to refund the difference between an item’s purchase price and a later sale price only if it goes on sale within seven days of the purchase.

“When I tell them it is past the seven-day policy, they tell me that they will just return it and re-buy it” at the sale price, he said, adding that his store managers are now allowing customers to do so most of the time.

Shoppers are also being far more savvy about asking retailers to match a competitor’s lower price.

While shopping for Blu-ray discs at a Los Angeles Best Buy, Luis Levy used his cell phone to check the price at nearby competitors. Each disc was $10 cheaper at Circuit City or Wal-Mart. Best Buy matched the lower prices.

Diana Thang, manager of Grace Jewelers near San Francisco’s Union Square, said she and her staff are bargaining more than she ever has in two-plus decades in the business. But it’s not working wonders.

“They have a budget,” Thang said of most customers this season. “We give a low, low price and they still can’t accept it. They’re looking at more than $1,000 stuff, and they want to spend $200 or $300.”

With sales slow at virtually all retailers, experts say customers now have the upper hand. And even some who don’t explicitly ask for a discount or price-match are pressing for better deals.

“You’d have to be a moron not to ask for a discount,” said Stephen Hoch, a retailing expert at the Wharton School at the University of Pennsylvania.

More and more consumers are doing just that, treating a trip to the mall like a visit to the used car lot.

Bluefly helps shoppers dress like a Gossip Girl December 23, 2008

WHAT’S HAPPENING

What would Serena wear? Bluefly is taking a guess with its Haute Gossip e-shop — helping customers dress like their favorite Gossip Girl characters. Why? As the retailer says, “There’s more than just skeletons in [the characters'] closets.” Like taking a peek into their hypothetical high-society walk-in wardrobes, Haute Gossip compiles the apparel and accessories that Nate, Serena, Chuck, Blair, Dan and Jenny might wear. Haute Gossip stays true to the teens’ on-screen style: Jenny likes lesser-known labels, Blair’s got lots of bling and Chuck’s closet is packed with argyle and ties. WHAT THIS MEANS TO BUSINESS We’ve come a long way since the days of Sex and the City when clotheshorses were on their own to find apparel that reflected their favorite character’s look. Now consumers want immediate access to constructing a closet that imitates the ensembles of their fashion icons.

Iconoculture