Editor's View - April 2014

Will Worlds Collide?
By Wanda Jankowski, Editor-in-Chief

Traditionally, retailers have been grouped into two basic categories: big ones that strive for mass appeal and small ones that seek to fill niches whether it’s through design, luxury quality or exclusivity. Then along came the internet and e-commerce. What’s happening between online and brick-and-mortar—the “showrooming” where consumers “tire-kick” products in a store but buy elsewhere, the very high profit margins some online retailers demand, the competitive pricing, the growing need for exclusivity—seems like impetus for change down the road.

There’s another factor at work. The younger generations are growing into new ways of shopping and thinking about products. What hasn’t been determined yet is how much the combination of internet shopping, still in its infancy, and the Millenial mindset will influence the structure of retail beyond product design in the future.
Modcloth.com is an online U.S.-based women’s clothing retailer launched in 2002. Although the clothes ostensibly serve a niche—retro, vintage and indie looks—and are aimed primarily at young women from about 18-30, the sizing and design ranges have appeal for a broader shopper base. For example, some clothes look more mainstream than others; a number of customers are 40+ looking for something different that department stores aren’t offering.

The site features merchandise from small, independent designers, but because it is internet based, the reach is worldwide. Indeed, I’ve read comments from purchasers as far away as Australia. If Wikipedia is to be believed, this little niche retailer was making $15 million plus per year by 2009 and today brings in $100 million or so per year.

That’s $100 million that department stores aren’t making from those customers. That’s also a lot more than a single brick-and-mortar specialty boutique could have hoped to make in the past. The niche is making big bucks.

There will probably always be customers who aren’t interested enough in design to buy items that are accessible to everyone else on their block. But many Millenials don’t think that way. Modcloth.com customers often comment about accessorizing to reflect their personalities or tailoring dresses to customize fit.

While older generations seem to expect the products to work for them “as is,” Millenials are more courageous in adapting products they like to suit their own styles and needs.

Quilts are popular with the younger crowd not only because they can be more affordable than an eight-piece ensemble, but because quilts allow the purchasers to create their own customized bedding ensemble by adding pieces from other sources.

Perhaps it’s time to retool the concepts of “big and small”—of what’s carried in-store and what’s offered by that store online, of who offers niche products and who goes for mass appeal. Will department and big-box stores someday feature a sampling of broad appeal brands in-store and niche designs online or vice versa? Will it be worth it to serve niches in brick-and-mortar stores only if a larger number of customers for specialized products can be reached via internet? Will stores become actual showrooms displaying samples and offering the products available for sale online?

Sooner or later, worlds will collide and there will be great changes. If you keep an open mind and search for fresh approaches, it can be not only a time of change, but an exciting time for you in retail as well.

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