Tailored menswear growth slows

This is a classic example of ‘be careful what you wish for because you just might get it.’
— Marshal Cohen, Chief Industry Analyst at NPD

After experiencing a strong gain of 23.7 percent in 2011, the men's tailored  market has seen slower growth over the past 12 months.  According to reports from The NDP Group, the tailored market saw a decline of 3.2 percent to $4.5 billion.  Suits and suiting separates were the highlights, experiencing growth of 5 percent and 8.9 percent, respectively.  It was the sport coat category which pulled the overall figures down, resulting in a decline of almost 21 percent.

 

Men purchasing tailored pieces as an investment, find little need to replenish their wardrobe seasonally.  Suits operate on a much slower fashion cycle than fashion, which requires an update every year - most men are able to carryover a tailored purchase for several seasons.  "Last year's feast became this year's famine, and the number from 2011 looked great until they had to be 'anniversary-ed' last year, " Marshal Cohen, Chief Industry Analyst at NPD said.    

 

Although the short-term 2012 yearly figure shows a decline, the two-year trend in tailored clothing remains strong - with overall growth of 20.5 percent.  The category figures show a shift in consumer demand towards suiting and suit separates.  

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Watch brands rethink growth amid slowing Chinese Market

Growth without consolidation is dangerous, because anything that grows too fast or flies too fast will come crashing down.
— Jean-Claude Biver, Hublot Chairman

After eight days at the end of April, BaselWorld watch and jewellery show closed with over 120,000 visitors, up 17 percent over last year.  This growth comes at a time where luxury Swiss watchmakers are expecting a slowdown into China and Hong Kong, 2 of the top three markets for luxury timepieces.   

 

In the first three months of the year, the Wall Street Journal reported that Swiss watch exports to mainland China fell nearly 26 percent.  This decline has partially been attributed to the changing political landscape in China.  With the new nomination of premier Li Kegiang, luxury gifting as part of the business landscape is falling out of favour.  With a shifting consumer and slowing market growth - expected to be 9 percent this year, off of double digit increases the previous two years, luxury brands are introducing new strategies to serve the customer.  

Heritage and innovation are helping to maintain interest.  "They [consumers] know that they want to invest in iconic brands and iconic products" said Giorgio Sarne, GM of Tag Heuer.  See a quick round-up of the fair's highlights above.  

The World Watch Report.  

The World Watch Report.  

1 Billion reasons to celebrate: Nordstrom's online success

Written by David McKay

Seattle-based Nordstrom's online sales surpassed the $1 billion mark in 2012, which was a 37% increase over the previous year - six times the average company growth over its history.  Free shipping and free returns, in addition to access to inventory in every Nordstrom store (not just limited to e.commerce allocations) has helped fuel the business.  Customer usability has also also been a significant factor.  Customers can see items in any colour on a model, may contact a style stylist, and with # of clicks to product under 3.  

 

Additionally, the 2011 acquisition of flash-sale site HauteLook has been a key part of Nordstrom's strategy.  "We may have done a good job over the years with the Baby Boomer generation, but we have also got to figure out to be relevant to the Millennial customer, and HauteLook has built a business on figuring that out," said Jamie Nordstrom, the retailer's President of Direct.  The average age of a HauteLook member  is 30 with a household income of $75,000 yearly.  The two companies are beginning to align in more significant ways.  HauteLook has been a product testing ground for Nordstrom's 119 Rack locations - allowing the bricks-and-motar channel to buy with greater confidence product which did extremely well on the flash site.  Lorac cosmetics has been one such success story.  

 

Many luxury department stores are onto the next round of site improvements.  Saks Fifth Avenue has improved its navigation, is showing larger images and providing more editorial-like content.  Canadian luxury retailer Holt Renfrew continues to support a Showroom environment - showing product flat on white backgrounds, with some editorial images from its social media sites and printed catalogues.  Sales through the channel are limited to Gift Cards, available to be purchased and shipped only within the country.  Nordstrom, which is entering the Canadian marketplace next year with its first bricks-and-motar stores, has 15,000 Canadian credit card holders and offers easy shipping and returns to the US through their e.commerce channel already.  

 

Gucci's Digital Direction

Written by David McKay
We can’t do a ‘Gucci p.r. Girl’ thing. We’re an authority and corporate voice - but we can be conversational at the same time.
— Courtney Colavita, worldwide social media director at Gucci

Gucci reaches 24 million people via social media every day by curating narrative and imagery which highlights the brands heritage, social lifestyle, news and events.  The company has embraced all major platforms, including Pinterest.  Although the company has an impressive 15,000 followers on the suburban, female dominated platform, they are still quite a distance from the 3+ million followers Peter Som boasts.  However, the brand is embracing the potential of the platform, and Tumblr, both of  which are driven by search instead of a timeline - giving content increased longevity.  

 

As a global luxury brand Gucci's overall communication strategy is controlled, not allowing for real-time consumer interaction and posts on sites like Facebook.  This is in contrast with Proenza Schouler's digital activity, which generates and creates a community-based feeling.  "We can't do a 'Gucci p.r. Girl' thing.  We're an authority and corporate voice - but we can be conversational at the same time", reiterated Courtney Colavita, Gucci's director of social media, at Fairchild's Menswear Summit.  Additionally, Gucci differs in its value strategy - while coupon and discount offers are often some of the most popular way retailers interact with consumers, online or offline it is not part of the brands value proposition.  

 

Gucci's online strategy has also been aided by targeting the much-neglected male customer.  Chris Ventry, GM of Gilt Groupe's GiltMan told CNBC recently that men shopping online are outspending the ladies by approximately 25% percent.  Gucci ensures this demographic is served through micro-trend content.  

 

Staying true to the brand's heritage and consumer lifestyle has helped boost brand ambassadors, while maintaining a cohesive story and image - online and off.  

Perry Sharma, sales and brand management guru

"I constantly stress the 'follow-up, follow-through' mantra.  People in the industry don't want to wait, and waiting too long can result in lost opportunities.  Those networks you [build] now, can result in success later on."
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Perry began her career at Levi's Strauss at Western Canadian Manager - working with retailers to develop the brand.  Lela Designs, a Canadian based golf-apparel company then tapped her for the role of Director of Sales and Marketing, afterwards heading to Quicksilver as the National Accounts Manager for Quiksilver Women's.  Perry was the driving force in bringing the brand into the Canadian market.  Perry's now a diamond broker for Sparkling Jewelry Inc.  I had the opportunity to sit down with Perry and get her insights on the industry, market and building a brand.

 

ON CHANGING CATEGORIES

"You have to re-learn product and retailers, because you're not using your established relationships.  It opens the door to new opportunities."

ON MOVING TO DIAMONDS

"With apparel, you can learn a brand and product.  [Now] you have to be creative, and learn as much from established people as possible.  This industry [has] men working 20-30 years in family-owned businesses."

ON MANUFACTURER SALES

"With retail you're selling a brand name, with this industry I'm selling a product and price point."   

 

 

ON FACETIME

"Diamonds are different, people want to see cut, clarity and colour, and know what they're buying.  I think our price point is how we sell best."

ON SELL STRATEGY 

"You have to just pick up the phone and make those calls and connections.  There are not many women in this industry, it adds another level of challenge. "

 

 

ON SKILL-SET

Perry found she is able to take the communication and relationship-building skills honed in her previous businesses and apply them to the diamond market - any market. 

 

ON PERSONAL DEVELOPMENT

"It's key to spend at least 2-3 years in one place, and learn as much as you can.  I think you need to try new things to really understand where you want to go. "

ON LONG TERM GOALS

"Its like a baby; you want to nurture it and watch it grow.  Which is what I'm doing with my business."

 

You can find Perry at the JCK tradeshow in Vegas, May 31st to June 3, booth #B2154

Brewed Success - Loyalty at Starbucks

Written by David McKay
Image Credit - Starbucks Webcasts & Presentations

Image Credit - Starbucks Webcasts & Presentations

This month marks a first in retail loyalty programming - Starbucks customers will be getting loyalty points for purchases made through grocery channels.  Customers will peel a sticker from product bought and enter a the sticker code into their Starbucks Card account online.  The company continues to develop it's channels, achieving almost $1.3 million in revenue FY2012, thanks to leading positions in both premium coffee at grocery, and the #1 ready-to-drink coffee.  Integrating channels with their significant loyalty program is key to Starbucks' growth.  

Although, for many retailers a loyalty program does not necessarily mean a successful loyalty program, 30 percent of Starbucks' transactions are prepaid on Starbucks Cards.  The company boasts 6 million active users today, and growth of 80,000 new members per week.  According to McKinsey & Company, most loyalty programs generate 20 percent of profit for companies, at the high end - Starbucks is enjoying a 10 percent difference to the positive.  

Image Credit - Starbucks Webcasts & Presentations

Image Credit - Starbucks Webcasts & Presentations

The company's partnership with Square allowing for mobile payment, with the integration of rewards on smartphones has lead to 100,000 app downloads per week - coming from both current reward members and new.  Starbucks' program is able to provide members with instant benefits with every purchase; the more purchases that occur, the greater the rewards.  They continue to set the benchmark for innovation and growth, by engaging their customer from a variety of angles, keeping the customer relationship top of mind underpins their success. 

Company information from Starbucks Newsroom.