Sorry, no new catchy name. It's better than "knock off artists" though! This segment is composed of specialty apparel retailers with private label. Some of these can legitimately be seen as carrying "exclusive brands" while many just carry private label. A moment to distinguish. An exclusive brand qualifies as a "brand" in that it has specific brand values which can be recognized or spontaneously offered by consumers. In other words, the consumer would be able, in some way, to articulate what the brand "means". It has attributes. Private label does not, and generally, the attributes associated with the private label are derived from those associated with the umbrella retail brand. This does NOT mean that the STORE itself lacks a brand identification. In fact, many of the successful non-discount retailers in this segment DO have STORE brand identification. There are obvious exceptions, but let's not get caught up in outliers in the data.
Value Trend players are do NOT, in most cases, set trends. It is not their expertise. Rather, they are adept at two things. First, they are adept at identifying trends early in their cycle, particularly ones with legs. Second, they are particularly good at some element of the logistics, sourcing or store operations side of the business. Put another way, they don't jump into the game too late and then they are positioned to make sustainable profits while playing around, a positioning which allows them to STAY in the game longer than Trend Setters with less advantageous cost dynamics. There are any number of ways, methods and technologies which have been developed to help this segment maximize it's possibilities. From "test" strategies initially developed by The Limited and then adopted and improved by others to fast-fashion supply chains such as Zara, there are existing ways to help manage the front end of this process: getting into a good "game" early and staying in it long enough. The back end requires time, effort and energy, but not rocket science. Fast-fashion isn't that hard to duplicate with the right resources and commitment. Vertically integrated sourcing and flexible materials handling as made best practices in the 80's by The Gap can be modeled and developed. But not overnight. So if you don't have these capabilities going into this recession, either develop them very, very quickly, or get hammered.
Trend-Value players depend on the success of Trend Setters. Think about it. How can there be a Trend lifecycle to jump if no one is setting trends? Makes sense, right. So if the argument that a recession alters consumer spending and consumer values and reduces the demand for trends in the first place, it follows that fewer high potential trends will be available to "interpret". The stronger the trend developed, the greater the number of Trend-Value players the market will support. Again...it's just a case of demand. The Trend Setters create the demand. The Trend-Value players fulfill it. So if the Trend is limited in appeal, the number of Trend-Value players who can make money off the trend will be equally limited. And more so during a recession.
That's an important word. "Interpret". What it means is that each player in a given niche attempts to put their own, however slight, twist on a trend which makes it that much more accessible to their given customer segment. A lot of the time, these "interpretations" are either overstated (yes, you really do look very much like your competition) or miss the mark and result in missing the trend (no, chartreuse was NOT the right color for the tight body fit trend). Which starts to bring up the recession-influenced risk associated with this merchandise strategy. If trends themselves are less likely to be adopted, and have shorter life cycles with smaller peaks due to recessionary spend patterns, the risks associated with interpreting those trends becomes even greater. Once again, there are fewer dollars to go around. Fact of life. Which places greater pressure on the "interpret" part of the equation. Why? Because the way to success is to grab as much of the smaller demand as possible, and to do that, even the Trend-Value players have to different, have to have a unique positioning....otherwise they become strictly price point competitors. In the growth decades, there was lots of room for a number of successful interpretations of each trend. In fact, the market required it. Even in the Trend-Value segment, there are differences in retail brand positioning which drive consumers to desire to differentiate themselves (again, aspirationally). So to keep YOUR brand positioning, you had to be different.
Now let's apply that same philosophy to the recession economy. Fewer trends to interpret, with smaller peaks and shorter lifecycles. Less "aspirational" buying going on, and even more so the further down the socio-economic food chain you go. Less need to find that nuance which differentiates versions of a trend, and more need to find an acceptable interpretation of the trend at the best price. Which means that in the Trend-Value segment, in a recession, it becomes more important to be able to deliver the trend early and at a great price than ever before. As noted at the top, that means being very good at both aspects of the success matrix for this segment. And unfortunately, the past decade has not demanded that all players in the market be VERY GOOD at both aspects of the matrix. Instead, the growth decade has allowed players to be good at one, or the other, or merely competent at both.
There's an assumption here: that the umbrella retail brand actually HAS a verifiable and desirable brand postioning. The next post is going to explore what happens when that is NOT true.
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