Economic downturn? Recession? These words hardly cross the boardrooms within the corporate headquaters of American Eagle and the like. The truth is that consumer spending is at an all time low and same store sales are falling. The retail industry is facing a crisis. During the summer, analysts were growing weary about the industry's economic outlook. However, the summer of 2008 was a time when the United States economy was suffering while the rest of the world was still in decent shape (still declining but not as severe as the U.S). Thus, domestic retail stores were cashing in from tourist spending who toke advantage of our weak dollar. As the summer season passed, the worl economy began to collapse and consumer spending crumbled after. What can keep retailers alive for the holiday season? The working parents are not spending as much for Chrismas gifts and retailers desperately need some sales. The one group th
ats willing to spend are teens. This consumer group has disposable income from jobs that are willing to pay them less (rather than hiring a working mom to be paid a higher salary, teens can work at minimum wage), and they also have less responsibilities. Teens live for the shopping experience. I always say: Abercrombie survives paycheck to paycheck (collecting all of teen disposable incomes). It seems as if retailers are getting the signals with ghost designing on TV fashion obsessed shows such as The Hills and Gossip Girl on the rise. Its strange that same store sales from Abercombie, American Eagle, and Gap are all down. I think its a pricing issue. My last visit to the Gap tore a whole in my wallet... I barely had enough for a sweater! Few brands get the pricing issue straight, and have effective marketing strategies. Urban Outfitters is one; with second quarter earnings up by 79% this year and a 43% profit surge, this company is recession proof...for now. Theres no doubt that retailers will face a lot of troubles this holiday season, but there is proof of how effective marketing helps. Leave a comment, and Happy Holidays!
Economic downturn? Recession? These words hardly cross the boardrooms within the corporate headquaters of American Eagle and the like. The truth is that consumer spending is at an all time low and same store sales are falling. The retail industry is facing a crisis. During the summer, analysts were growing weary about the industry's economic outlook. However, the summer of 2008 was a time when the United States economy was suffering while the rest of the world was still in decent shape (still declining but not as severe as the U.S). Thus, domestic retail stores were cashing in from tourist spending who toke advantage of our weak dollar. As the summer season passed, the worl economy began to collapse and consumer spending crumbled after. What can keep retailers alive for the holiday season? The working parents are not spending as much for Chrismas gifts and retailers desperately need some sales. The one group th
ats willing to spend are teens. This consumer group has disposable income from jobs that are willing to pay them less (rather than hiring a working mom to be paid a higher salary, teens can work at minimum wage), and they also have less responsibilities. Teens live for the shopping experience. I always say: Abercrombie survives paycheck to paycheck (collecting all of teen disposable incomes). It seems as if retailers are getting the signals with ghost designing on TV fashion obsessed shows such as The Hills and Gossip Girl on the rise. Its strange that same store sales from Abercombie, American Eagle, and Gap are all down. I think its a pricing issue. My last visit to the Gap tore a whole in my wallet... I barely had enough for a sweater! Few brands get the pricing issue straight, and have effective marketing strategies. Urban Outfitters is one; with second quarter earnings up by 79% this year and a 43% profit surge, this company is recession proof...for now. Theres no doubt that retailers will face a lot of troubles this holiday season, but there is proof of how effective marketing helps. Leave a comment, and Happy Holidays!
No comments:
Post a Comment