Discount divas dominate US fashion shopping says report

Saks Off 5th

Saks Off 5th proves that the bargain habit isn’t just found in the mass-market

There’s been a general trend among retailers recently to try to wean consumers off discount prices. Sometimes that has meant offering “everyday low prices” or it might have been about add-ons to make us all happier to pay higher prices.

Either way, discounts are bad for so many reasons: they hurt margins, they make shoppers wait until a price is marked down rather than buying when they first see an item, they make it harder for retailers to work out what their profits will (or won’t) be and so on.

But it seems that any hope that we’d all ease back into a full-price frame of mind is just that … hope, in the US at least.

A new report from NPD says that off-price is the second fastest growing shopping channel (behind online) showing 4% growth in the year to April.

And half the shopping visits to physical off-price stores result in a purchase. That’s the kind of conversion rate many full-price retailers can only dream about.

It’s also interesting that three-quarters of all clothing purchases across all retail channels are made by people who shop off-price at some point.

Of course, that doesn’t mean 75% of all purchases are off-price, but it means more consumers than not mix discount buying with ‘regular’ store buying and so are committed bargain-hunters, which puts more pressure on those regular stores to discount. The conclusion has to be that they aren’t likely to be convinced back to almost-permanent full-price shopping any time soon.

Neiman Marcus is trying to cut back on endless markdowns

Neiman Marcus is trying to cut back on endless markdowns

Hardcore shopping habits

Interestingly, these discount divas are among the most hardcore clothing shoppers, although NPD doesn’t say how much they spend. Maybe it’s no more than those who shop more often at full price, because if they’re ultra bargain-focused, they’re obviously getting enough good deals to feed their shopping fix.

Anyway, the data comes from NPD’s receipt mining service, Checkout Tracking, which analyses receipts and follows consumer purchasing behaviour over time, so it’s pretty reliable.

What else does it show? For one thing, that these shoppers aren’t brand loyal even when it comes to the off-price stores they visit – they tend to shop at multiple discounters as well as other chains.

And consumers aged 45 and above, represent over half of off-price apparel buyers. This age group along with older Millennials, (the 16% of off-price apparel shoppers aged 25 to 34) have both increased their share of such apparel purchases.

Who’s afraid of the big bad discounters?

So which stores in the apparel retail sector should be worried? Well, all of them I suppose but department stores in particular. “Off-price retailers are resonating with fashion and cost-conscious consumers alike, and are stealing department store business for good reason,” said NPD’s chief industry analyst Marshal Cohen.

“Consumers are clearly looking for better deals and they know if they shop at an off-price retailer they will get them. [They’re] finding just what they want … at the right time and at the right price, and that isn’t always the case with department stores.”

2 thoughts on “Discount divas dominate US fashion shopping says report

  1. Pingback: Back-to-school: US shoppers give top marks to deals and discounts | TRENDWALK.net

  2. Pingback: Retail service: It’s the little things that count | TRENDWALK.net

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s