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The Rag Trade: The Sale Mentality

The Sale Mentality

The Sale Mentality

Last week, I began exploring the effect of the recession on the fashion industry and the theory of “wear it now” versus “wear it later” deliveries as a way the fashion industry is trying to combat economic stagnancy. Though “wear it now” might be a step in the right direction in changing the tide of consumer spending by stocking relevant items when demand is highest, changing delivery times alone will most likely not be enough to change the overall depressed stated of the fashion industry. The apparel business is also facing the reality that their previous early delivery schedules or “wear it later” mentality have created a very real unintended side effect: the sale mentality.

Yes, as we all have learned through this recession, having clothing on the racks before they are in season has trained consumers to wait to expend their precious discretionary spending money on goods that are on sale, clearance or marked down. The question then becomes, what does the fashion industry do to get consumers to buy at full price again?

Quality & Value
Quality is King (or Queen) when it comes to consumer products and keeping customers satisfied. You can only last so long with hiding shoddy product through strong branding and packaging. In this recession consumers are stretching their discretionary spending to maximum capacity. Quality and value will be the first thing shoppers look for in prospective products. Simply put, the consumer wants to get their money’s worth.

We can see this through the rise of “disposable fashion” – the H&M’s and Forever 21’s of the world. Customers are looking for something at a low price point, very trendy and of-the-moment but that will most likely not make it to the next season. Clearly, consumers are willing to skimp on quality so long as the value is there.

Lower Prices
The slow economy trickles down to the factories. Less demand for brands leads to fewer orders, which leads to lower demand on factory floors, everyone on the food chain is hurting. Fortunately, for healthier brands, that means they have been able to negotiate better manufacturing pricing and terms. That’s great for consumers because that translates to sustained lower prices without sacrificing quality and value.

Exceptional/Differentiated Design
At the peak of the recession, I went to several trade shows, including NY Fashion Week. I noticed one predominant trend – designers were playing it safe. It was one of the most boring seasons I had ever seen, designers weren’t taking risks and not progressing, everything had been seen before. As a former designer, the message was clear: designers were only making what they knew would sell. That may get your brand through the lowest point of the recession, but it’s not a long-term strategy.

If a brand/designer wants to get consumers to pay full price, they will need to concentrate on exceptional or differentiated design. They will need to provide the consumer with something they can’t get anywhere else – and with the sense of urgency that if they don’t get it from them – they won’t get it at all. At the end of the day, design is what is going to distinguish designers from their peers and have consumers opening their wallets.

Customer Service
Though consumers don’t have the spending power they used to, it’s still definitely a buyer’s market. Survival of the fittest has weeded out many brands. Despite the market slim down, there are still a number of options to differentiate one’s brand when it comes to consumer products. One way companies can distinguish themselves is with stellar customer service.

“The customer is always right” has never been more correct. With brands competing for shoppers’ dollars, brands need to show customer appreciation. After all, consumers could have shopped anywhere but they decided to spend with you. So, make sure that when the customer has questions, or issues with a product, the problems are resolved swiftly. In today’s market, the last thing a brand needs is a customer complaining. The Internet has forever changed the power of a complaint. Facebook and Twitter can make one bad experience last a lifetime, or, worst case, cause the end of a brand’s life. Brand owners, remember, no matter the situation, in most circumstances even the most disgruntled customer can be smoothed over with simple and plain good customer service.

Branding & Brand Loyalty
Perhaps the most mysterious of the factors, branding and brand loyalty is the crème de la crème method of keeping customers paying full price. One need only look at examples like Apple, Chanel and Louis Vuitton. These brands rarely (if ever) have sales but customers keep coming back. Granted, they don’t only have branding to rely on, they have quality, value, exceptional design and excellent customer service. They don’t by any means have low prices but that doesn’t stop customers from buying their products – repeatedly.

Branding is the marketing term de jour and brands/designers should definitely take heed. How do you distinguish your apparel from all of the other options? Many times it comes down to brand image. What does the brand represent? What’s the story behind the brand? Why is it compelling? Why does it attract certain kinds of customers? Sounds relatively simple, but these are all questions that brands and designers must answer when developing their brand strategy. But note, branding will not be enough, nor will it be easy to execute. Branding is just another brick that designers and brands need to think about when developing their rock solid foundation of quality, value, customer service and exceptional design – without that, branding will just create nothing more than a facade. And facades crumble easily.

Conclusion: Breaking the Sale Mentality
Consumers have become pros at navigating sales and clearance racks. More often than not, shoppers are waiting for something to be on sale – because we all know it will just be a matter of time before the price is slashed. So, if we’re ever going to crawl our way out of this recession how do we get customers to start paying full price again?

There is no magic formula, but brands and designers need to look within themselves and make sure that they are doing everything they can to give customers the best possible experience. The building blocks will vary by designer/brand, but with a healthy mix of keeping costs down, bringing quality and perceived value up, designing the best product possible, making the customer feel important and by developing a unique brand image, brands/designers will be able to keep their customers – and have them pay full price.

To read Part I of this 2 part article, please see: The Rag Trade: “Wear It Now” or “Wear It Later”

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5 Responses to “The Rag Trade: The Sale Mentality”

  1. Queen of Bows Stella says:

    Well written and said, G.
    Yes, it’s a challenge to make an awesome product with less resources and for a lower price, but it’s a challenge, not impossible. And, I think if designers and brands stick true to themselves, yes, some things will change to get to the end product, but a lot of vision, spirit, and unique attributes can still come through to the end consumer.

    I’ve also noticed that with brands like Apple, they may not put things on sale, but they will run specials, like buy a computer, get a free iPod. I think fashion lines can learn from this model in the case that they do need to discount and move product as the consumer gets more bang for the buck, the price of a “premium” product doesn’t work against it, and more branded products are out in the world increasing exposure.

  2. Gabriella GDK says:

    Thanks Stella :)

  3. I love this article and it addresses a timely topic. From a philosophical point of view I would add that the sale mentality can be tied to a woman’s self-worth. We so often feel we don’t deserve something full-price.

    You actually do better in the long run and feel better if you buy one amazing pair of shoes rather then six mediocre ones. It is better for the environment (less stuff) and helps your self-esteem. Do you think I’d trade my one pair of Louboutins for six pairs of a cheaper brand? No way! When I wear them I remember that I loved myself enough to splurge on them.

  4. Gabriella GDK says:

    Hi Laura,
    Nice point – I can definitely see how there can be some guilt or lack of feeling we deserve something full price.

    For me I think it was a matter of age and wising up. When I was much younger, I would buy more quantity vs. quality because a) I loved to shop; b) I was on a budget; and c) more expensive things seemed more unattainable. As I got older, I realized the art of SAVING and creating a goal for myself and started getting more expensive quality pieces and fewer cheapy pieces. It was also an awareness that I was creating a “collection” so to speak.

    I’m glad you brought this up – could be a good future blog post!


  5. One word ‘Chanel’ LOL buy quality and it will be something you treasure forever. Great article really intreguing x P


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