Growth and success of valueretailing is not a recession resulted occurrence, but a novel trend.

Consumers of today are seekingfor options to reduce their apparel purchase expenditures. They are a valueseeking entity. There is a noticeable shift in their shopping preferences, withmore importance given to product pricing. Customers today have become moredemanding expecting good quality, along with inexpensive pricing. To combatwith this situation, retailers set aside a fresh investment budget for conceptstores. This gave way for the progress of a new trend called value retailing.

Value retailing is a big formatstore concept, where branded products and accessories are sold under bestdeals. This concept is mainly planned mainly for II and III tier cities withthe promotion of mega savings offer. These cities have good potential providingas aspiration to the consumers to buy products at best deals. Value retailstores offer products with an inexpensive price tag. Also their promotions takethe guise of price-cuts, added freebies, off-labels, added discounts on bigbill-sizes and many more.


Earlier, the strong blow ofrecession also caused a noticeable shift in consumers preferences causing asloth in the retail growth. Consumers restricted their shopping budgets, andopted to buy goods at discount sales, and during promotional offers. But, evenafter the world has recovered from recession, the consumers who were used tobuying products on discounts and offers continue to seek the same. They preferto buy quality items at prices that are comparatively less than branded ones.This helped the value retailers to reap solid gains, and larger format valueretail concept stores were started. The concept of large format stores gave wayfor more return on investments comparatively over small format stores.


Growth of value Retailers:


A decade before, a product thatwas sold in the market at a discounted rate would arouse suspicions in theconsumers minds regarding its worth. More often, these kinds of productscomprised of seconds, and rejected items. But, this phenomenon took a completeturn with the emergence of value retailing concept. Customers prefer to makethe most of what these stores are offering them. These products prove to bedefect free and also provided a shopping experience to customers that weresimilar to the high streets.


Value retailing remains on ahigh priority in the consumers shopping list increasing sales for factoryoutlets, closeout stores, and off-price products. H&M, Primark (UK), NewLook, The buckle, Aeropostale, and Fast retailing are a few of the successfulvalue retailers to name. They provide quality goods at inexpensive prices;products that are neither seconds, nor rejected. While their main stores holdstock of new merchandise matching with the current seasons, the surplus stockgives way to this new retail concept. Merchandise are sold at these stores withround the year discounts ranging anywhere from 20-80%.

Despite all the appealingdiscounts they get, the consumers need not have to compromise in terms of theambience offered along with the quality customer service. The interior of thestore initiates the shoppers to have an aspiration to own a brand, and alsoprovide the ability to buy it. The only limitations of these stores being, thatthey relay on surplus stock, and sell merchandise that is a season old, butmost of the shoppers do not have any complaints regarding the same.

Are Brands losing their Market to Value Retailers?

There is a shift in the price-fashion arena, and this shift is being aptly utilized by the value retailers. The rapid growth of value retailing poses a tremendous threat to traditional retailers. Top brands include; Gap, Nordstrom, American Eagle, Abercrombie & Fitch etc. The trend of value retailers offering apparels at 365 days discount is penetrating deeper into the market segment day by day posing a threat to the branded apparel makers. Value retail outlets can be defined as a big retail stop in the organized apparel sector. It offers everything under one roof, especially at a price range not available in branded outlets. The growing power of value retailers is likely to create a deep impact on textile and apparel manufacturers also. Differentiating on value curves, apparel manufacturers will have to follow different levels for each segment, i.e. for brands and value retailers.


Consumers of today are more spoilt for choices, having the option of choosing among global brands, local brands, and private labels. Value retail formats hold a promise to the consumers that they get value for every penny they spend.


References:

  1. Global Emergence of Value Retail, Ashish Dhir, Vijaya Kumar, & B.Prakash, Textile Review, August 2010.
  2. http://www.financialexpress.com
  3. http://www.3isite.com