If the few remaining chain retailers want to survive the retail apocalypse, they’ll have to keep things cheap for consumers.
Almost all U.S. consumers are value-conscious shoppers who regularly visit discount retailers to find a bargain, according to the latest issue of the quarterly Consumer View report released today by the National Retail Federation. A survey of more than 3,000 U.S. adults found that 89 percent said they shop at various types of discount retailers.
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Of those, 58 percent reported shopping at dollar stores, 50 percent at off-price stores like Ross or T.J. Maxx and discount grocers like Aldi or Lidl, 44 percent at outlet stores and 36 percent at thrift stores.
“Off-price and discount shopping took off during the recession as price-conscious consumers looked to save on everything from brand-name goods to everyday household purchases,” the report said. “Now, eight years into the economic recovery, consumers continue to hunt for deals and discounts.”
Clothing is the product shoppers are most likely to purchase at bargain retailers, cited by 75 percent of those surveyed, followed by groceries (71 percent), home décor and furnishings (62 percent), personal care and beauty products (60 percent) and electronics (52 percent).
Regardless of income or generation, virtually everyone wants a bargain whether it’s for everyday necessities or big-ticket splurges. Even those who can afford to shop elsewhere love finding a ‘steal,’ and it’s a habit that’s here to stay,” said Mark Matthews, NRF Vice President for Research Development and Industry Analysis.
Retailers are trying to accommodate price-savvy consumers by introducing new private label products. Retailers like Target, Walmart and Meijer have all introduced private label brands that keep prices affordable for consumers. It offers an alternative to brand-name products that sometimes boast higher prices.
Target continuously introduces new brands. Target released its new home decor brand, Opalhouse, earlier this year. The brand has more than 1,300 pieces of furniture for the home. The brand includes bedding, bath, décor, tabletop and furniture. Most pieces are priced under $30.
Target has launched several new brands in the past year, including Threshold brand to celebrate its original relaxed classic intent, followed by an approachable modern aesthetic with Project 62 and modern farmhouse aesthetic with Hearth & Hand with Magnolia.
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Ray Wimer, assistant professor of retail practice at Syracuse University, said retailers that aren’t introducing their own brands are missing out on a major opportunity — and it could be killing their business. Wimer said Sears’ lack of investment in new brands and its overall declining trend in merchandise and retail performance points to the end of days for the former retail heavyweight.
Sears Holdings, which hired an advisory firm this week to prepare a bankruptcy filing, did not launch any private label brands in recent years. Wimer said the retailer’s massive debt comes after “Sears’ lack of investment in new brands and its overall declining trend in merchandise and retail performance points to the end of days for the former retail heavyweight.”
“All major retailers have been heavily invested in new private label brands this year. Not Sears. I think we are seeing things coming to the end for Sears,” he said. “Look at J.C. Penney launching a new brand Peyton & Parker on Oct. 19. I can’t remember the last time Sears launched a new brand to excite the customers to shop.
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