Business Trends

Posts Tagged ‘shopping’

Entrepreneurs Haute This Fashion Week

In Uncategorized on September 4, 2009 at 10:14 pm

Fashion week is approaching and despite the recession putting a damper on retail sales, industry research firm IBISWorld ranks fashion design as one of the top start-up opportunities for entrepreneurs in 2009. As fashionable clothing is becoming more affordable and consumers start to regain confidence, the Los Angeles-based firm forecasts industry-wide recovery to take place in the second-half of 2010, with an average annualized growth of roughly 6.3 percent in the coming five years.

“Consumer attitudes toward spending are changing, and it’s shaping the direction of fashion,” said George Van Horn, senior analyst at IBISWorld. “Being style-conscious doesn’t mean people aren’t being budget-conscious, and vice versa. Successful fashion houses are those delivering style and quality with affordability, and we can expect this trend to linger for the foreseeable future.”

As the saying goes, cheap is chic. With overall prices being driven down, retailers offering luxury apparel, like Saks Fifth Avenue and Neiman Marcus, have been the hardest hit, cutting costs and discounting stock in an effort to sustain profit margins.

Industry-wide, fashion design businesses have seen significant pressures on margins in recent years, with current levels approaching 6 percent versus 30 percent only a few years ago. The need to retain contracts and ensure ongoing cash flow is yet another factor behind prices going down. Even prestigious designers are bailing on displaying their latest collections on the runway or have declared bankruptcy, such as German fashion house Escada and couture designer Christian Lacroix.

“This has certainly been a make-or-break year for fashion,” said Van Horn, who advices new entrants to differentiate their services based on smart pricing strategies, quality and creative self-marketing, rather than through reliance on advertisement. “In recent years, smaller independent designers have been sprouting like never before, largely attributed to the growing popularity of online retail, as well as relatively low entry barriers and start-up costs. This has helped give the industry the ability to move forward, despite the retail sector taking a big hit.”

Additional links

Fashion Design Services: http://ibisworld.com/industry/default.aspx?indid=1413
Clothing Accessory Stores: http://ibisworld.com/industry/default.aspx?indid=1070
Women’s Clothing Stores: http://ibisworld.com/industry/default.aspx?indid=1067
Big Box Retail Stores: http://ibisworld.com/industry/default.aspx?indid=1092
Miscellaneous Retail Stores: http://ibisworld.com/industry/default.aspx?indid=1106

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Americans Still Not Spending

In economy, Uncategorized on June 25, 2009 at 4:58 pm

spendingAccording to Mintz.com, Americans are continuing to tighten their belts through Q1 of this year. 2008 data shows users of the online personal finance service cutting spending by an average of 4% each quarter, and by another 4% in Q1 2009. Overall Q1 2009 spending was down 17% versus Q1 2008 across eight key categories. This indicates that, at a national level, the leading money management and budgeting service’s users remain concerned about the length and depth of the U.S. recession and its potential impact on family job loss and economic security.

This continuing trend of regular expense reductions tells me that consumer confidence is not yet on the rise,” said Aaron Patzer, CEO and founder of Mint.com. “Our users are looking for more concrete evidence that the U.S. economy is truly bottoming out before they’ll be returning to prior spending levels … if in fact they do. While it’s tough to know that 17% of last year’s spend has fallen out of the American economy, it’s satisfying to know that our financial management and budgeting software appears to be helping our growing user base weather one of the longest downturns in our nation’s history.”

The most dramatic decrease is in Shopping, where user spending has dropped by more than 40%, which is significant savings in aggregate, but was accomplished by a steady, gradual 3-5% cut each month in a discretionary category where that type of control is possible

Users have also cut spending quarter over quarter in Entertainment (by 24%) and Bills & Utilities (by 16%)

Other categories have fluctuated quarter over quarter based on seasonal shifts, but still show a net decline:

Spending on Gifts and Donations was down 1%, in spite of a 25% spike in Q3 and Q4 with election donations and the holiday season
Automotive spending has seen the broadest swing in spending, with the extreme variance in gas prices in the same time period, but still nets at a 24% decline over the examined quarters.

The only category that has completely recovered is Food & Dining, where spending in Q109 was actually higher than it was a year prior – but just by 2%.

“This data suggests that Mint’s current tools and guidance are working well for our users today,” said Patzer, “But there’s much more opportunity to make budgeting and planning easier and more effective for more Americans. We’ll be introducing new and improved product features and educational content in Q3 and Q4 designed to do just that.”

Economic Recovery Anytime Soon?

As unemployment continues to rise and disposable income drops, no one is anticipating a fast recovery. Consumers have become increasingly concerned for their jobs and are saving rather than spending.

According to market research firm IBISWorld and their latest report on the economic crisis, we can expect the economy to contract overall by 3% in 2009 – the worst decline in more than 50 years. The lowest point may have been reached in the first quarter, and it will not be until 2011 that overall economic activity will surpass 2008 levels.

Survey Finds 91% of Consumers Still Prefer Brand Products

In Consumer Trends, economy, Uncategorized on June 15, 2009 at 7:07 pm

New consumer polling data shows that an overwhelming majority of U.S. supermarket shoppers will continue purchasing store brand products after the recession is over.

A poll conducted this month by GfK Custom Research North America for the Private Label Manufacturers Association reports that 91% of shoppers say they will keep buying store brand products after the recession ends. Conversely, only 8% of the consumer polled said they will stop buying these products.
The quality of store brand products is a big factor in convincing shoppers to keep buying them. The GfK poll found that 9 of every 10 shoppers agree that the store brand products they buy are just as good as, or better than, national brand products.
This positive experience makes shoppers eager for an even greater assortment of store brand products from which to choose. Nearly half of consumers polled said they wanted their supermarket to carry a greater assortment of private label products.

According to market research firm IBISWorld,  in-house or private label brands in supermarkets have become a significant trend within the industry.

In the meantime, the recession is still having a big impact on shoppers:
More than half (54%) of them say the recession is an important factor in their decision-making and 32% say it is very important.

Well into the recession, shoppers are still switching to store brands. The poll found that 35% of shoppers are trying store brand products in categories where they had previously only purchased national brand items. More than 3 of every 10 shoppers say they are now buying more store brand products than they were a year ago.

Related Links

Supermarkets & Grocery Stores in the US – IBISWorld industry report

Consumers Save Big On Memorial Day Groceries

In holiday spending, Uncategorized on May 21, 2009 at 5:23 pm

This Memorial Day it’s all about savings, as consumers look to cut costs while still maintaining a fun three-day weekend. Fortunately savvy shoppers, who purchase store brands over brand-name products, stand to save 16.3 percent on their total holiday grocery bill, according to IBISWorld research:

memorial spending

“In essence, store brands turn the clock back two to three years,” said Toon van Beeck, senior analyst with IBISWorld. “Without inflation, store-brand groceries this Memorial Day weekend are comparable in price to brand-name groceries during the 2007 holiday.”

Based on the average holiday shopping cart above, the 16.3 percent savings puts about $10 back into consumers’ pockets. That means with approximately 117,641,000 households in the U.S., the nation could save about $1.18 billion if everyone celebrated Memorial Day in the same fashion and went the store-brand route as opposed to the brand name route.