By Blacks Senior Consultant, Steve Pruitt
For the past two decades, traditional menswear retailers have been catering to a uniquely wealthy and fashion-oriented group of men from the Baby Boomer generation. However, a dramatic change in the financial landscape, and the Boomers’ exit from the marketplace, means that retailers must target a new generation of customers with different desires and budgets.
In the mid-1980s all the traditionally based menswear stores started to sell more fashion apparel, in response to demand from wealthy Baby Boomers who were then in their thirties. The Boomers of this period were experiencing a time of extended financial growth and low inflation rates, giving them an unprecedented amount of disposable income. And, since they were the largest generation in history at that point, they represented a huge potential customer base.
In order to cater to this group, retailers moved away from their classic American lines and started carrying European vendors such as Armani, Canali and Zegna in an effort to compete with the recent influx of so-called “Italian stores,” that were selling high-quality, high-priced Italian goods with great success. The owners of these stores knew their customers because they were their customers—they were young, well off men who grew up in an open generation that liked to experiment with style.
While the traditional menswear operations were not as in-tune with the new fashion customers as the Italian stores were, they started gearing their product toward this group and found immediate success—success that has endured up until very recently.
The economic downturn that we are currently in (which we believe actually began in April 2007) caused a tipping point in the cycle. Not only did the recession cause many consumers to put the brakes on spending, but it also arrived at a time when many Boomers began exiting out of some segments of the market due to retirement or a change in lifestyle. It’s no surprise, then, that Clothing sale have decreased 20% to 30% over the past 12 months. With Boomers moving out of the executive sphere, the customer base for high-end Clothing is shrinking. It is worth noting, however, that Boomers are expected to live longer than any previous generation and they will remain strong buyers of sportswear, resort and casual wear for at least another ten years.
The New 20-Year Cycle
We are currently entering a new 20-year cycle in menswear that we are calling the “Generation Y Cycle.” This cycle is comprised of customers born between 1980 and 1995. These new customers were the privileged children of Boomers. This generation is extremely consumer-oriented. They were raised by so-called “yuppies,” or successful Boomers, with heavy consumption patterns. (Interestingly, Generation X, born between 1968 and 1979, did not adopt the same consumption patterns because they grew up during the hippy era, which brought with it a different, more frugal value system.)
Generation Y, however, grew up in a connected, consumer world. They are extremely trend and brand-driven, perhaps more than any other generation. They are also one of the largest groups of online consumers. It is typical for a Gen Y consumer to do almost all their shopping research online, and to shop stores simply for pleasure.
This new generation of customers not only differs from Boomers in their tastes, but also in their shopping frequency. Boomers went from buying apparel twice a year (like their parents) to buying four to six times a year, but it is not uncommon for Gen Y to buy 52 times a year, or every week, because shopping is sport for them.
Gen Y is currently in their 20s to early 30s, and as their incomes grow, we expect their consumption to grow as well. We do not believe that the current economic downturn will dramatically change the spending patterns of this generation of consumers. They still want the brands and trend items that they always wanted, and when they are able to shop they will return to the same buying patterns as before the recession.
How To Hook Into the New Cycle
Learn how to network with Gen Y customers and to speak their language. This means tapping into their community to do your marketing. For example, some of our most successful clients who cater to Gen Y customers have thriving community websites that encourage feedback. It is important for Gen Y consumers to feel like they are a part of the process and that when they do give feedback they will see results. By offering them the ability to shape their experience with your business, you are speaking their language.
2) Location, location, location
Shopping patterns have shifted in this new cycle. You need to be in locations where Gen Y consumers will want to shop. Local, urban malls are out, unless you are a budget chain. However, high-end malls will remain successful in tourism-centered areas, such as Las Vegas, Miami, New York and Boston.
Specialty retailers should focus on thriving, high-end city centers where your new customers spend their time.
3) Rotate your sales staff
Your customers are changing, so you need staff that can relate to this new base. Your sales staff will be essential in networking you into this new community.
4) Rotate your vendor structure
One of the most important things at the beginning of this cycle is that you have product that speaks to the new customer. Look for brands with longevity and immediately start rotating them in. Foster relationships with new vendors, or have your old vendors introduce you to their new lines.
5) Look for the next retro trend
If you are having difficulty getting a handle on this new customer think about looking for the next retro trend. Retro trends will continue to stay with us because they are easy to market and recognize and Gen Y customers like identifying with them. For example, think about the Converse sneaker. Why are 20-year-olds hooked on a 50-year old style? It’s because marketers resurrected the “cool factor” for this product. So, what’s the next retro trend? Ask your new vendor structure.
About the author:
Steve Pruitt is Founder and Senior Consultant of Blacks Retail Analysis and Blacks Consulting. With over 30 years of experience, Steve is one of the most respected merchandise analysts in the industry. His specialty is apparel merchandising and he has worked with clients in every sector of this category. Steve is also a trusted general business consultant, known for his ability to help retailers plan growth and manage change.
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