Recession Retail: Big Changes Coming to America's Apparel

Tuesday, October 9, 2012

No segment of the economy has been immune from the economic downturn, but U.S. clothing retailers have had a particularly rough time.

Now, even as the economy makes its slow climb back, the apparel industry isn’t out of the woods. They’re facing another set of challenges: retaining customers as new competitors with game-changing ideas fight to break into the market.

“It’s a challenging economy, and the companies that succeed need to have on-trend styles in a variety of price points,” says Brent Smith, Ph.D., associate professor of marketing at Saint Joseph's University in Philadelphia. “Conventional approaches, such as pushing a single garment like the khaki or generic white shirt, probably need a reboot. Apparel retailers really need to examine themselves to stay relevant and interesting in the future."

Two factors — value and variety — are key to survival, according to Smith. And many established apparel companies are finding new models that run counter to the way they’ve been doing business.

On top of this, new business models are also coming from abroad. Competitors from Europe are trying to break into the lucrative American clothing market, and they’re bringing some unique business strategies with them.

TOPSHOP/TOPMAN, already well-known to British consumers, introduced lines in America through Nordstrom, lending the brand instant credibility stateside.

And Zara, a Spanish clothing retailer, is opening stores in America with a “fast fashion” model.

The retailer purposely introduces only a few pieces of on-trend style in its locations. The message to consumers: If a store has an item you like, buy it now before someone else does.

“They’ve introduced a scarcity factor and a ‘now’ factor,” Smith explains. “It’s really a paradigm shift.”

Ultimately, post-recession consumers are looking for value more than ever. But one thing that hasn’t changed with the economy, Smith emphasizes, is that retailers need to be more aware than ever of what customers expect from them.

“Retailers need to study their customers and make sure they’re still delivering value, whether that value is price-to-quality, fast fashion or variety of selections,” Smith says. “You can’t give up on your value proposition just because the economy is challenging.”

Smith can be reached for comment at bsmith@sju.edu, 610-660-3448 or by contacting University Communications at 610-660-1355.



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