Retail Trends and the Boomer Convergence

An interesting report on trends in retailing appeared recently in the Christian Science Monitor. In Anatomy of a Shopper, Clayton Collins wrote ...

A push from two demographic dynamos - boomers buying younger (and with more attention to environmental sustainability), tweens and teens buying older and savvier - that will hold purveyors of goods and services to a new level of performance and accountability, experts say.

And that amounts to a big opening for smaller, niche stores that have the flexibility to tweak product offerings in ways that megastores - tied to big-volume suppliers - cannot, experts say.

In both apparel and food, "the most significant growth is happening in the second- or third-tier players," says Paco Underhill, marketing consultant and author of "Why We Buy: The Science of Shopping."

"Some of them are local grocery-store chains, whether it's Publix or HEB in Texas, people who somehow have some sense of local pulse.... Local players can play local, particularly if it's for produce or [other] food products," he says. "They also can provide something that's different."

Consumers appear to be willing to pay for that difference. Price still matters - healthcare, college, and other costs have taken big bites out of many wallets - but it's not as important as it has been.

"There is this other side of a shopper that says it's hard work getting the lowest price every day," says Ms. Corlett. "A surprisingly large minority," 46 percent, of consumers polled by WSL for its recent How America Shops report said that finding the lowest price on goods and groceries was not always a top concern.

And this ...

For many, holistic living also means buying with an awareness of how their purchases affect others. Some cite the rise of the so-called LOHAS movement - lifestyles of health and sustainability - as a sign that mainstream consumers are exhibiting more of that awareness, choosing to do business with firms that demonstrate an awareness of environmental and fair-labor practices.

Here, too, they are willing to pay more, even when doing so is not easy. The core of this values-driven group is comprised of 35- to 64-year-olds, according to the Natural Marketing Institute. Some 60 percent of them are baby boomers.

"They cannot be characterized as wealthy boomers," says Brent Green, who runs Brent Green and Associates in Denver. "When they say they are willing to pay 20 percent or more because of environmental sustainability, that's not necessarily financially convenient."

Nor do they represent a counterculture fringe. "Not when you're looking at 32 percent of all US adults," says Mr. Green, who adds that adding the consumer subset he calls "nomadics" - inclined toward sustainable purchasing but not fully committed - brings the total to some 100 million Americans.

"You wouldn't describe them as necessarily activist in the sense of 'save the whales,' " says Green, "but rather in their purchasing decisions and in their propensity to influence other people."

It appears to me that the Baby Boomers and the Echo Boomers are moving in surprisingly similar directions when it comes to retail trends.

The aging Baby Boomers are (predictably) spending more on health and comfort as they resist the detrimental effects of getting older. They also are reliving their youth by regaining some of the social sensibilities that they held so famously in the 1960s and 70s.

The Echo Boomers are a demographic group that's just as large as the original Baby Boom. What's interesting is that they seem to already be where the Baby Boomers are heading. They're already healthy -- many of them reject the couch-spud lifestyle (this is why television ratings and spectator sports attendance are faltering) and have driven growth in mountain biking, surfing, snowboarding and other active sports. They also eat healthy -- look at all the interest in whole foods and veganism. That's why McDonalds is stagnating. The social sensibilities are there too -- American Apparel's success is evidence.

This is important, change-the-world stuff. Big demographic trends like these move the economy for years and propel businesses that are in tune with the trend.

Organic, reusable, low-impact, sustainable, efficient, sweat-shop free, American-made, locally-grown, and in line with local expectations. That's where the market is headed, and that's how you can do "good" for the world as a retailer. Doing well by doing good ... what a concept.

Retail Marketing: Playboy mates with brand store trend

Playboy Enterprises, Inc. has opened its first freestanding Playboy Concept Boutique in the United States at The Forum Shops at Caesars in Las Vegas. The 2,000 square-foot store offers a collection of Playboy apparel, accessories and lingerie. The Las Vegas location also will offer one-of-a-kind Playboy memorabilia items, select artwork, and vintage product from Playboy's vast archives. The store will be a template for Playboy's future stores, as well as retail concessions and lingerie areas.

"Playboy strategically selected the Forum Shops at Caesars in Las Vegas to debut our first U. S. store because it is one of the most successful retail shopping destinations in the world, in one of the most visited cities in the world," commented Christie Hefner, Chairman and CEO of Playboy Enterprises, Inc. "With our Playboy Boutique and the opening of our Playboy branded entertainment-destination in Las Vegas in early '06, it is clear that Playboy and Las Vegas are a powerful match, presenting the chance for consumers and visitors to experience all of the glamour, sexiness, style and fun associated with both."

The Playboy Boutique, whose concept was developed by the WalkerGroup, offers a unique shopping experience to Playboy fans. ids architects, inc. who have also developed stores for brands such as Rolex and LeSportsac was responsible for the store design. Unlike traditional retailers, the Playboy "Concept" boutique emphasizes a design-driven look, inspired by the spirit of the Playboy brand and representing concepts inherent to the iconic brand. Its fixturing was purpose-developed for Playboy, making the architectural elements "concepts" unto themselves, with furniture and fixtures inspired by Playboy iconography, such as cufflink-detailed tables and Rabbit Head chairs.

Other design details that enable shoppers to immerse themselves in the Playboy lifestyle include, a plasma-screen video wall featuring archival and contemporary footage and a customized pebble cash-point countertop inspired by rocks from the Playboy Mansion Grotto. Evoking the sexiness of the Playboy brand a stand-alone lingerie area sells Playboy's "Pink Label" and will house Playboy's sophisticated "White Label" lingerie collections, showcased on the mirrored tile walls and complimented with satin quilted upper walls. The memorabilia area of the boutique offers one-of-a-kind artifacts for sale from Playboy archives and Hugh Hefner's personal memorabilia collection, including his pipe and slippers, vintage Bunny Costumes, and paintings and sketches from Alberto Vargas and LeRoy Neiman, respectively all showcased in museum-style cases.

The first U.S. retail location follows Playboy's successful 2002 launch of its freestanding Playboy Tokyo fashion boutique, which in was recognized as one of 40 top stores in the world by the Retail Leaders Association. The Las Vegas opening also leverages Playboy's expansion at retail in specialty stores and leading department stores throughout the United States, Asia and Europe. Retail stores that have carried Playboy fashion merchandise include Henri Bendel in New York, Colette in Paris, Selfridges in London, and Seibu in Hong Kong. The next freestanding Playboy store, a 2,300 square-foot store on Chapel Street, Melbourne, one of Australia's premier fashion areas, will open in fall 2005.

Playboy's branded line of licensed fashion and consumer products has experienced growth at retail since its repositioning in 1999, with a product offering that includes men's and women's fashion apparel and accessories, underwear, legwear, outerwear and footwear, as well as home furnishings and lifestyle and entertainment products. Playboy's licensed products business as a whole now generates in excess of $500 million in global retail sales in more than 130 countries and territories.

Branded merchandise sells. Sexy sells. What more can we say?

Retail Success Story: Alligator Purse

The Alligator Purse in Hyde Park is a high-end women's wear boutique with five years of success. The three relatives who started the business with no previous retail experience did three smart things: they chose a high-end niche, found a good location, and were patient. They make quarterly buying trips to New York and Los Angeles to find exclusive goods and they limit the inventory to select sizes.

The owners no longer staff the store -- which might be another advantage. It's hard to work "on the business" when you're spending all your time working "in the business".

Sexy Advertising: Asian Ads Swap Gender Roles

The new face of cosmetics ads in Asia is soft, delicate -- and male. From the Wall Street Journal via the Pittsburg Post-Gazette:

Lounging in a pink apartment in a television commercial for Able C&C Inc.'s South Korean makeup brand Missha, actor Won Bin leans in as if to kiss a woman sitting next to him -- but he does her bidding instead, taking her dusky-colored lipstick and carefully applying it to her lips.

In an ad for skin-care chain The Face Shop, ruby-lipped film star Kwon Sang Woo nuzzles a berry tree, then dons a crown of leaves. Mr. Kwon, famous for six-pack abs and a slight lisp, "has a kind of neutral gender," says Scott Han, the company's public-relations director. "Our customers think he is healthy and adorable."

Marketers aren't out to poke fun at the lipstick lads of Asia. Instead, they are pushing shampoos and makeup by tapping into a powerful shift in gender images taking place in a number of developed East Asian countries. The conservative, macho male stereotypes that have long dominated society in countries like Japan and South Korea are falling out of fashion. Women are gaining power and independence and expressing a preference for different kinds of men.

"A pretty face with big eyes and fair skin, and a moderately masculine body, are what Korean women want in men these days," says Rhie Hye Young, a spokeswoman for Missha.

Obviously there are a lot of ways to do sexy advertising. If you're brave, you could put this unusual ad theme to use for your store. It would certainly get attention, but it would probably also tag your store as a "gay" place ... which might be too small a niche market.

Retail Success: American Girl to Open Third Store

Mattel is going to open another American Girl Place store. The new store will be in the Grove shopping center in Los Angeles. The first two stores in Chicago and New York are runaway successes and standard-bearers for "experience retailing". American Girl caters to customers for whom cachet trumps price, selling them dolls, books and a bimonthly magazine. Sales ($379.1 million in 2004) come primarily from its catalog, website and two flagship stores.

Rick Caruso, developer of the Grove, said he expected the store to be "a huge driver of retail sales" at the complex. He said he had been lobbying for an American Girl store well before the Grove opened in 2002, believing it would attract pilgrimages from other states and overseas.

That's because American Girl stores are seen as a girls' theme park of sorts, minus the rides.

"There are so many revenue-generating experiences within the store," said Jim Silver, publisher of industry magazines Toy Wishes and the Toy Book.

At 40,000 square feet, the Los Angeles store will be twice the size of a typical chain drugstore.

It will have a 150-seat live theater for the Broadway-style "American Girl Revue," a doll hairstyling salon, a bookstore and a cafe, where girls can take their dolls to tea or pick one to have lunch with — and possibly buy.

The average American Girl shopping trip takes two hours, compared with the 20 minutes a customer spends in a typical retail store, said Ellen Brothers, president of the Mattel division. Brothers won't say exactly how much her customers spend, but she says it is in the hundreds of dollars.

American Girl's Chicago store was the first to open in 1998, the same year that Mattel bought the brand from Pleasant Co. for $700 million. Five years later, Mattel opened a store on Fifth Avenue in New York. That store attracted 1.3 million visitors last year, the company said — and many of them probably had no idea their dolls were sold by Mattel.

1.3 million visitors! And shoppers spend 2 hours in the store. Think about experience retailing ... could you create in-store experiences that would draw shoppers from far away?

Retail Marketing: Adidas Brand Stores

Brand stores continue to succeed and grow. The world's largest Adidas Sport Performance Store has opened in New York City.

"Our adidas Sport Performance Stores are an important communication platform for us - here we can showcase the breadth and depth of our brand offering in a unique setting," said Erich Stamminger, President of adidas America. "adidas makes products for more sports than any other brand and this is our opportunity to demonstrate that. We want people to think of the adidas Sport Performance Store as more than just a store, but a destination for athletes."

adidas currently has more than 15 Sport Performance Stores worldwide located in Marseille, Toulouse, Lisbon, Las Vegas, Manchester and the most recently opened store in London. The next Sport Performance Stores are scheduled to open in Berlin, Rome, Tokyo, Hong Kong and other major metropolitan cities around the world.

What does this mean for your own retail store marketing? Well ... do you feature the brands you sell? Manufacturers spend a fortune on promoting their brands -- take advantage by creating "brand boutiques" inside your larger store. And if you don't sell brands worth promoting? Get some fresh merchandise!

Retail Marketing: target the kids

Lowes and Home Depot have taken a page from McDonalds' marketing handbook. They're successfully drawing parents into their stores by offering free monthly do-it-yourself workshops for children. The kids take home free workshop aprons with the store logo on them.

Home Depot stores host kids workshops from 9 a.m. to noon on the first Saturday of the month. Spokeswoman Chris Gronkiewicz said attendance varies, but the Fort Wayne stores typically see about 50 children each month.

Lowe’s stores have their kids clinics at 10 a.m. on the second Saturday of each month. The clinics at Lowe’s store at 44430 Illinois Road are so popular that the location has added a second session: the fourth Saturday of each month. Jane Ward, kids clinic captain, said the first workshop of the month can draw as many as 200 or more children to the Illinois Road location. And the store drew almost 100 last weekend for its second workshop of the month.

If home improvement stores can do this, can't you? There must be something fun that's related to your store that you can offer kids on a regular basis. It's a sure-fire winner.

Cause marketing: eco-wear

The New York Times reports on FutureFashion, a fashion show sponsored by Earth Pledge, a nonprofit group that promotes environmental programs. It challenged designers to create fashion using only fabrics that were renewable, reusable or generated less pollution than conventional material.

Organic food and beauty products have become a $15 billion industry. Organic fiber clothes are much smaller ($85 million retail for organic cotton in 2003), but interest is growing. The designer Rogan Gregory will introduce organic cotton denim clothing under the Loomstate label in high-end stores such as Barneys and Fred Segal this month. For the more cost-conscious shopper, Sam's Club will start selling 100 percent organic cotton active wear by Chaus at its 550 stores this month, with prices starting at $10. Whole Foods began selling organic cotton clothes and linens from more than 10 companies early this month.

"Green" is a fine niche market for smaller retailers. There's a large group of consumers out there who want organic products and very little competition amongst retailers.

Retail marketing: prepare to make money from mature consumers

Advertisers in Europe have turned their attention to aging Baby Boomers, at least in a small way. The statistics are hard to ignore: In Britain, the 50-plus age group is the only growing demographic segment. Over the next 20 years, the number of Britons older than 75 will leap by 43 percent. In Europe as a whole, the proportion of the population over 65 will grow from 12 percent today to 28.5 percent - easily the largest of any region in the world.

A study last year found that 86 percent of seniors felt ignored by marketers, and 70 percent felt patronized.

Remember ... Baby Boomers will NEVER admit to being "old". They aren't going to act like seniors in the generations that came before them. Appeal to their desire to remain fit, active and involved. You'll reap huge benefits.

How to turnaround a dot-com retail failure

Seth Greenberg saved eHobbies.com by getting down to retail basics. He decreased the payroll from 250 to 3, and moved from swank offices to the warehouse. The online retailer was profitable with 2 years and is now back up to 20 employees and 75,000 products.

Hobby shops traditionally are hard to make profitable because the of the sparse population of hobbyists in any one location. On the other hand, it's a natural industry for online sales because eHobbies can aggregate shoppers nationwide and around the world.

Latest Carnival of Capitalists

This week's Carnival of Capitalists is online at Beyond the Brand blog. The Carnival is an always-interesting collection of links to the week's best business and economics blog entries. Give it a try, you'll like it.