Fashion trends appear unexpectedlyand fade away even quicker than they appeared. Sustaining their slice of thepie and attracting new customers is a key issue facing the retailers.Especially in case of apparel retailing, where garments have a short life cycle,fads move even more rapidly. The retailer would lose his profits if he missedto keep abreast of the springing trends, and simultaneously would lose money ifhe invests in the wrong trend. This is one big challenging aspect facing thefashion industry.
Luxury, Near Luxury, &Standard Apparels:
The major concern for apparelretailers is brand positioning. Luxury apparel stores like Banana Republictarget high income customers who do not mind to pay a hefty price for theirmerchandise. They seek attires with premium quality with a premium price. Thesecond category of retailers are those who deal with near luxury garments;clothes which are little lavish, but within the budget of middle and uppermiddle class consumers. They target customers who crave for wearing stylishclothes matching the latest trends, those cannot afford to pay premium pricesfor their outfits, but can settle for these near luxury brands. Brands suchas Polo Ralph Lauren, Fitch & Abercrombie fall under this category. Gap capturesconsumers with apparels at mid-range price. Last are the standard apparelretailers, those who aim at the middle and lower level customers with averageincomes, who generally seek to buy apparels during clearance sales. Brands suchas Old Navy targets low end price products of the apparel industry.
Brand positioning during toughtimes:
Brand positioning of apparels isvery crucial especially during the times of economic turmoil. During thesetimes, only the creamy people go in for their shopping spree without anyrestrictions of their budget. Luxury apparel retailers do not face much problemduring these times as their wealth-laden customers generally do not have anyissues regarding their spending patterns. After being bludgeoned by recession,middle and lower income people curtail their shopping patterns and cut backfrom spending on non-necessity items. Clothing comes under this kind. Sales inthe near luxury and standard apparel stores will have a deep impact duringthese times.
Profit margins of apparelretailers too have variations due to the discounting strategies and variationin price levels. Profit margins for high end apparel companies range around 67%and 20% for standard apparel companies. Low priced apparel retailers keep lowprofit margins and still go for a discount when they do their clearance sales.
Fashion industry is going througha price overhaul with companies like H&M, and Forever 21 coming up withapparels with fair quality and low price. Todays consumers are picky and closeminded regarding their shopping preferences, especially when it comes toapparels. The market trends keep changing to go with the consumers taste.
Customers will look for value aswell as the price tag. From the perspective of attitude, shoppers will have adifferent thinking. In order to compete in todays market; the successfulstrategy for apparel retailers is to offer a wide range of clothing at as manyprice ranges as possible.
References:
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