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Three Media Trends Influencing Consumers’ Apparel Purchases

January 10, 2013 Leave a comment

I’m excited to announce that I was asked to contribute to Retail Touchpoints’ 2013 Outlook Guide on behalf of BIGinsight™ and below is our article. To view the full Guide, which includes contributions from 13 retail industry experts — including well-known analysts, consultants and researchers, and one retailer – please click here.

The economic crisis that rocked our country nearly five years ago has clearly left its mark on today’s consumers. Gone are the days of excess when shoppers would spend now and worry later about paying for their purchases. The “new normal” mindset mandates that consumers think twice about their purchases, spend when necessary, and scrimp and save at every corner. While the fiscal responsibility we’re seeing now is necessary for the long-term health of our still-fragile economy, retailing as we know it has become an increasingly competitive landscape with merchants vying for a share of this shrinking wallet.

The challenge for retailers now is to attract customers, get them into their stores (or online), and keep them there through the checkout. In this new economy, it’s imperative that retailers create marketing communications plans that integrate both new media and more traditional outlets in a manner that speaks to their core customers effectively and efficiently. With this in mind, BIGinsight identified three media trends influencing consumer purchases within the very competitive apparel category.

The Waning Influence of Traditional Media

While consumers indicate that the top ten types of media that influence their apparel purchases are of the more traditional variety, half of these media have declined in influence over a two year period, while others are showing slow or no growth. With circulation rates slipping, it may come as no surprise that the effectiveness of newspapers (Index* to June 2010 = 83) and advertising inserts (Index = 85) are facing the steepest declines. Other forms of print media are suffering as well; the influence of magazines and direct mail has diminished 5% for each over a 24 month time period. Today’s budget-minded consumers appear to be keeping the influence of instore promotions and coupons afloat, while TV, email, and internet advertising have remained relatively stable as well.

Top 10 Media Influencers on Apparel Purchases

Trending UPward: Social Media, Mobile, and Blogs

While the various forms of mobile and social media don’t appear within the top ten media influencers for apparel, their pull among clothing shoppers has become much stronger over the past two years. In fact, the influence of mobile devices on apparel purchases has increased 130% over June 2010! Social media (Facebook, Twitter, etc.) has increased nearly 40%, while blogs (Index* to June 2010 = 140), videos on mobile devices (Index = 143), and text messaging on mobile devices (Index = 133) have realized double-digit growth as well.

New Media Growth: Millennials are in the Driver’s Seat

The Millennial generation (born between 1983 and 1993) is quite literally the driving force behind the growth of influence of mobile and social media on apparel purchases. Compared to the average consumer (Adults 18+), Millennials are more than twice as likely to indicate that videos on mobile devices (Index* to Adults 18+ = 247) influence their clothing expenditures. Blogs (Index = 238) and text messages on mobile devices (Index = 213) are highly influential with this younger group of consumers, as are social media (Index = 188) and mobile devices in general (Index = 195).

While the economic downturn certainly shoulders much of the responsibility for the new consumer, we also must consider the impact of new technology as a changing force behind evolving shopper behavior. While still relatively small, the growing influence of mobile and social media on purchases cannot be ignored by retailers. Today’s smart shoppers are tapping into a wide variety of media for product information, reviews, availability, sales/promotions, and pricing. Knowing your customers and the types of media to which they adhere are key to developing a successful marketing strategy in the increasingly competitive retail environment.

To view the full 2013 Outlook Guide from Retail Touchpoints, click here.

* Index of 100 is flat, while an index of 105 [or 95] indicates that a figure is 5% higher [or lower] than the comparative figure.

Source: BIGinsight.com

© 2013, Prosper®

BIGinsight™ is a trademark of Prosper Business Development

Can an iPhone 5 Save JC Penney?

It seems that Apple has the Midas Touch, and when JC Penney brought former SVP Ron Johnson on board in late 2011, it was heralded by many as a genius decision. Long relegated to the back of consumers’ minds [along with Sears], it appeared that this department store dinosaur was finally making a conscious effort to reinvigorate its stodgy image and arming itself to compete with its more present day foes: Macy’s, Kohl’s, and TJ Maxx.

With the advent of m-commerce, social media, and increasing connectivity, it seemed that this marriage between an Apple exec and JC Penney was a solid union – at least enough to advance the department store into 21st century retailing. However, as 2012 has progressed, it has become clear that the new “Fair & Square” JC Penney has gotten off to a very rocky start.

While JC Penney certainly has taken some steps in the right direction – focusing on exclusive brand names from the likes of Nicole Miller, Liz Claiborne, Mango, and even the Olsen twins takes a page from Kohl’s and Macy’s successful playbooks. Today’s consumers demand quality products at great prices, and they want to feel good about their purchases when walking out of the store. Here’s where JC Penney missteps: they have eliminated the excitement from the shoppers’ buying process. Having an extra 10-20% off coupon or buying an item on sale – which Kohl’s and Macy’s offer in abundance – gives the shopper the feeling that they’ve one-upped the retailer, i.e. the customer wins.

This shopping euphoria is essential when marketing apparel in an uncertain economy. Consumers already had closets full of clothes, and when it came time to really trim budgets during the “Great Recession,” apparel was one of the easiest budget cuts to stomach. It’s interesting that even during a downturn in the economy, electronics sold – maybe with a little less frequency and at somewhat lower price points, but the latest HDTVs, tablets, notebooks, smartphones, and all things iOS were, and continue to be, hot selling items. Budget-conscious consumers could justify the purchase of a new TV or computer; these were items that the whole family could enjoy, helped us multitask, and in some cases, assist with homework. In other words, electronics were fun, practical, and educational. Consumers literally couldn’t buy into this same reasoning when it came to apparel or home goods, categories that JC Penney so desperately needed to move on the selling floor.

When Johnson joined JC Penney last year, it appeared that the Apple “ego” followed him as well. Apple is an innovative brand with a heady following, and its retail outlets, which Johnson cultivated, served to build on this loyalty and brought out the curiosity in others – they were what shoppers demanded and gravitated toward.

JC Penney lacks the Apple cachet, and its “Fair & Square” overhaul – ditching coupons and weekly promotions in the process – failed to make a compelling argument as to why shoppers needed to check out their revamped stores. Sure low prices are great, but the new normal directs shoppers to seek out that extra incentive when it comes to buying non-essentials like apparel and home décor. The “new” JC Penney already has proof of this – just look at its successful free haircut promotion for Back-to-School; the operative word here, of course, is free.

A glance at what motivates shoppers to make apparel purchases shows us the continued importance of instore promotions and coupons in this category. According to BIGinsight’s semi-annual Media Behaviors and Influence™ survey of 25,000 consumers, apparel sales and promotions are the #1 driver for shoppers of many of the top U.S. retailers, including JC Penney, Kohl’s, Macy’s, Gap, H&M, and Nordstrom – yes, even promotions are key with luxury shoppers. And, in instances where instore promotions aren’t the top motivation for apparel purchases, they are still likely top of mind. At TJ Maxx, for example, while 42.3% rely on word of mouth, nearly as many (40.4%) value a good sale.

While word of mouth is the #2 influencer for apparel purchases among JC Penney shoppers (at 36.3%), coupons are almost as important (35.5%). JC Penney customers’ attraction to apparel coupons is stronger than that of the general population (30.7%) as well. Coupons don’t carry nearly as much clout over in Apple’s wheelhouse – electronics – so it’s plain to see why Johnson was so quick to axe those money-savers at JC Penney.

So can an iPhone save JC Penney? Can a marketing approach borne from Apple revive a struggling department store? Can pigs fly? Clearly not. What works for Apple – what used to work for Ron Johnson – simply has no place in JC Penney’s strategy. Today’s apparel shoppers have honed their bargain-hunting skills and crave a good deal on their terms. Instead of trying to force “Fair & Square” on the buying public – much like the launch of a great, new, innovative product à la Apple – JC Penney really should have first become more attuned its target customers.

This post originally appeared on Forbes.com as a contribution to the Prosper Now blog.

An Amazonian Sized Challenge: The Smartphone and Tablet Price Check Era

February 9, 2012 1 comment

It used to be that in order for a consumer to do a price comparison it required some sort of inconvenience for them. Before the Internet, they had to drive across town or have their newspaper ads handy. Once the Internet came along, they could compare before they came in store but once they were there the options were limited.

In the smartphone and tablet era, not only can consumers compare prices between retailers while standing in a store, they can actually purchase the product from a different retailer while standing in another store.

In a survey we conducted for the National Retail Federation this past holiday season, 25.3% of Adults 18+ shopped for an item in a store and then decided to buy that same item online from a different retailer. The ability to find a cheaper price online was the overwhelming top reason for choosing the online retailer.

The convenience of shopping online was the second most chosen reason for going to a different retailer online and the item being out of stock or unavailable in the store came in third.

Another interesting insight from the January survey was about the Amazon Price Check Application. Of those who have a smartphone, 15.9% used the Amazon Price Check Application this past holiday season. I recently downloaded this app to my iPhone and tried it out. You can scan a barcode, take a picture of an item, type in the product name, or “Say It” and the app will search to find that product and give you the Amazon.com price. I took a picture of my office desk phone and it found it in seconds.

The smartphone and tablet era presents an interesting challenge for retailers that doesn’t look to be going away any time soon. New technology is always just around the corner helping to make consumers’ lives easier. What could possibly be next?

Check out the Prosper Mobile InsightCenter to find the latest smartphone and tablet consumer trends.

Source: BIGinsight™ Monthly Consumer Survey – JAN-12 (N = 9317, 1/4 – 1/11/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development

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