Another month is off your calendar….and certainly another quarter, too. If you were too busy to read the news, now it’s time to go over some of the top articles and news pieces in March. It is the best way to stay in the loop on what’s happening in the retail industry and have some conversation topics up your sleeve. We hope that you enjoy this swift catching up.

Michael Preysman on Iterating Everlane and ‘Fixing’ Fashion Retail

In this article by Business of Fashion (BoF), their very own Vikram Alexei Kansara connected with Michael Preysman - founder of the online clothing retailer, Everlane. The retailer, according to market reports, now seeks investments at a valuation of $250+ million. Preysman discussed building a direct-to-consumer fashion label for the digital age, plans for growth and working with Gap’s former Creative Director, Rebekka Bay, to turn the company’s brand values into a discernible design signature. When asked about about how he decided to offer ‘radical transparency’, disclosing on its website how much each of its products cost the company to make, the entrepreneur responded: ‘Hey, people are mature enough. People understand that you have to make a profit, so why don’t we just tell them?’

Saving, Scrimping, and … Splurging? New Insights into Consumer Behavior   

The article by McKinsey & Co. reports the results of their global survey of more than 22,000 consumers. It highlights recent shifts in buying behaviors that have important implications for retailers. To topline, there is fear of yet another downturn on consumers’ end. However, Mainland China and North America have experienced a more optimistic atmosphere with the majority of consumers not being worried about losing their jobs. A key take-away the consulting firm included was their “five truths about today’s consumers.” They are as follow:

1. Consumers are proactively searching for savings: 44 percent agreed that they’re “increasingly looking for ways to save money.”
2. They will remain brand loyal, if the price is right. Consumers are shopping around to find retailers that sell their favorite brands at lower prices and waiting until those brands are on sale.
3. Although less people are willing to “trade down” (12 percent), most of those who do so (69 percent) intend to stick with the less expensive options.
4. The percentage of consumers who traded up is almost equivalent to the percentage who traded down.
5. Consumers are shopping across channels and claim to have shifted a considerable fraction of their spending from brick-and-mortar toward online and discount channels.

The anti-Amazons: Two brands shaking up retail

Amidst the Amazon era, where the giant alone offers more than 500 million products for sale, a couple of clothing retailers are introducing shoppers to a decidedly finite list of items. Does that sound counterintuitive at all? In perhaps one of the most interesting quotes of the month, Mary Brett Whitfield, Senior Apparel Analyst at Kantar Retail – via CNBC – explains that "To every trend there typically is a countertrend that makes sense." The article follows on to describe how MM.LaFleur and Stich Fix’s business models differ from Amazon’s in the sense that they are able to offer personalization in scale although with [somewhat] limited offerings.

Experience Over Things: The Future Of The Consumer Economy 

This article is not to be missed - and here is why. The economist, Bill Conerly, analyzes the highly discussed topic of a trend in which there is an upswing of consumers’ prioritizing their spend on experience rather than merchandise. “Millennials seem less inclined to buy fancy cars, but I see them in groups when I head to resort destinations like Cabo San Lucas and Las Vegas” explains Conerly. He argues that total consumer spending will decline.  However, it will happen gradually, which will allow the economy to adjust. Under such circumstances, many retailers have already started to incorporate experiences throughout their customer’s purchasing process (i.e. Lululemon’s concierge fitness service, etc).  This is certainly a great opportunity for brand differentiation. Marketing professionals: ready, steady, go!

Personal Shopping Services Seek Scale

“How big can the market for personal styling businesses become?” This segment of the retail industry was originated partially in response to changes in consumer behavior. Between 2008’s crisis and the growth of eCommerce, in-store foot traffic has notably decreased. Additionally, Lauren Sherman of Business of Fashion states that “fashion consumers have become much less loyal to specific brands and retailers, and more obsessed by particular pieces.” A logical way to benefit from those trends was certainly offering personalized options to consumers based on the virtually unlimited online options for clothing retailers. Keeping the digital mindset associated with eCommerce, a solution for amplifying the offerings of personal shopping services is the use of algorithms.  However total automation without the balance of a discerning professional stylist on the other end has proven to ultimately be flawed. Unfortunately, this renders scalability a daunting challenge.

Guest Comment UK eCommerce Success and What the Future Holds

Internet Retailer reports that the UK is leading the race of eCommerce transactions in Europe. The country has significantly passed the others in the region with 79 percent of Brits ordering online in 2014 (versus 10 percent in Italy, for instance). Amongst the reasons for UK’s leadership are: the use of technologies that “optimize and streamline the booking process on their channels”, a strong online presence (95% of their retailers sell goods via online marketplaces) and, finally, retailers of the island nation offer more delivery options than any other country on the continent. The article includes projections for what’s to come for retail in the country. Firstly, synergy between online and offline services is expected to allow businesses to structure their product offerings and ultimately better meet the needs of customers. Secondly, following the increase of smartphone usage, the UK should experience expansion on its mobile commerce presence.

This now concludes this month’s round up. However, check back in next month for a newly curated list of articles that will get you up to date with the retail industry’s latest buzz... Additionally, we invite you to stay tuned to our blog page and follow us on Twitter and LinkedIn for all of our musings.