From Me to We, From More to Less: Five Value Shifts That are Changing our World
ubiquitous. The brand that’s available to anybody can quickly become undesirable to everybody, as consumers seek exclusivity. Leading fashion trend forecaster David Wolfe of the Doneger Group describes the new consumer landscape this way: “It’s bye-bye mainstream and hello to thousands of tiny consumer tribes.” These tribes, in pursuit of special, exclusive value, are driving major changes in all consumer-facing businesses. The structure of the marketplace will be redefined as an infinite number of finite market segments (“communities”) being served by an infinite number of finite brands, micro-marketed through mediums that specifically target those niches. Many of the branded apparel specialty retailers understand this consumer shift. Accordingly, they are spinning off segmented niche brands, growing their original brand by extending it into other product and consumer markets. Examples include J. Crew, spinning off the CrewCuts kids brand and comfy casual Madewell. Urban Outfitters gave birth to Anthropologie and Free People. Each targets a different consumer segment, providing an eclectic mix of apparel and selected hard goods. Victoria’s Secret, the intimate apparel powerhouse, launched the wildly successful PINK in order to attract a much younger customer. The shift toward exclusive niches also favors lifestyle brands such as Ralph Lauren, or Nike, or The North Face, and others, which are not linked to a single product or classification of products, or to one consumer segment. They can therefore launch into any consumer or product segment that is compatible with their brand positioning. The brands that were launched and heavily marketed as single-product mega-brands, such as Levi’s jeans, have found it extremely difficult, if not impossible, to extend their brands into other product or consumer markets. Furthermore, consumers, with their closets overstuffed with all kinds of brands, will tend to try a brand that isn’t being worn by everybody else, rather than choosing yet another one of the ubiquitous mega-brands. After all, in 1980, they had a choice of about six major blue jean brands. Today there are hundreds. Retailers from traditional department stores to hardcore discounters are being forced to meet the expectations of the exclusivity-seeking consumer. Accordingly, they are accelerating their pursuit of exclusivity agreements with designers and national wholesale brands as well as their private branding programs. And, all of them are pursuing, in varying stages, “localization” – type programs, again to cater to special, local consumer preferences.
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3. From Plutocracy to Democracy Armed with their reassessment of value, consumers have shifted from accepting the notion that only the wealthy deserve luxury to demanding “democracy” — affordable luxury for all classes. This shift helped create a new consumer segment, “luxury aspirants,” and drove the launch of many brands to cater to the up-market “yuppie” core of that segment. Brands such as Coach, Lacoste, Bloomingdale’s, Dooney & Burke, Tori Burch and others have successfully captured the contemporary, young, not-quite-rich but well off luxury consumer. Further down-market, the democratization of luxury is driven by designers creating diffusion sub-brands for mainstream retailers. Continuing a trend begun by Halston thirty years ago, Jean Paul Gaultier has designed for Target, Norma Kamali can be found at Wal-Mart, Vera Wang at Kohl’s, and Nicole Miller at JC Penney. Stella McCartney has done a line for GapKids. The impetus for this is not only consumers seeking higher quality value for their money, but the designers’ need for growth in over-competed, slow-growing markets. As consumers have increased access to information through their mobile electronic devices, or PCs, they can compare prices in a matter of seconds and can better assess real price /value relationships. So, blind acceptance of any price tag on a luxury item, just to be able to flaunt a flashy item and logo among one’s wealthy peer group, is giving way to a growing demand for real value and quality. 4. From Just New to New and Now New no longer trumps all. Consumers still want new, but they also expect to have it right here, right now. Innovation itself is not enough to win in a 24/7 world, where what’s created today is cloned tomorrow. It’s now necessary to knock yourself off every day of the week. A good example of the shift to “new and now” is Zara, a division of Arteixo, Spain-based Inditex, and part of the “fast fashion club” which includes H&M, Forever 21, and others who are racing to adopt its model. With over two thousand stores around the world. Zara offers both supply-chain and product innovation by delivering two new lines every week to each of its stores. In what is probably a first in the industry, the line mix may be different for two different stores just a few blocks apart, based on the consumer
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