By looking across our Global Youth Culture Studies for the past 9 years, and analyzing the changes in effective retail, we’ve put together a brief story that outlines where things are headed when it comes to successful retail. One thing that’s very clear when digesting all of this information, is that retailers and the concept of retail, especially in fashion and footwear, (electronics, beverages, and several other categories have kept up with the curve), no longer match the way this next generation shops.
However there are many areas where success is taking shape including changes in mall concepts, fast-fashion, mobile commerce, the second-tier retail scene (i.e., vintage, thrift, Goodwill), and vending machine shopping. Last week, we ran a story about changes in malls in Japan and I’d like to repeat the first part of that story to start:
Photo of Marui One mall in Shinjuku
“In the past 3 weeks, we’ve noted that many stories revolving around innovative retail in fashion when it comes to youth culture have been coming out of Japan. While the economic news continues to dominate with gloomy forecasts and horrible retail scenarios, there have been some brands and retailers that are still generating a great profit and in many ways, have become beacons of recession-proof strategies. Ranging from American Apparel to Hot Topic to Urban Outfitters, there are various formulas for success. However, it’s also important to see what’s going on in Japanese retail because many new concepts in shopping and retail globally often start in Japan, including the advent of pop-retail, the popularity of fast-fashion “no-brand” stores such as Uniqlo, artist T-shirt boutiques such as Beams, vintage and authentic Americana demands on the backstreets of Shinjuku, and “genderless” boutiques featuring apparel that can cross boundaries, among other concepts. (Hot Topic, some argue, was greatly inspired by the Goth and punk fashion tribes of Tokyo and great demand for such apparel, band merch, and accessories within this subculture.)
In a corresponding story about Fruits Magazine launching their own retail store, it’s interesting to note that this store is located on the second floor of a successful themed mall called Marui One (101). Marui One opened February 20th in Shinjuku, which in our opinion, is becoming one of the best cultural hotspots for finding leading-edge street fashion, from Goth Lolita, to EGL, and even Fairy Kei styles. On opening day, the mall featured Dolly, one of the rising stars of the Visual Kei bands coming out of Japan (see our corresponding stories on Japanese visual kei), second only to Harajuku.
Marui One, similar to La Floret, offers distinctly themed floors that reflect the various fashion tribes of Tokyo, including local brands.”
The story goes on to point out the specific themes of the stores and brands that correspond with the local street fashion tribes. It should go without saying to “stay in touch with your consumer’s preferences,” but many retailers in America have lost touch with this new generation’s preferences in styles, brands, and price points. In Japan, these smaller street fashion tribe stores so know their shoppers because they are the very ones creating the inspiration for the designs and stores themselves. Trends come from the bottom up -not dictated by the designers or stores from the top down. (You can also see this via their avatars, which is also an inspiration for designers and stores.) This is also the case of many new boutiques in Shanghai. In America, it’s amazing how many stores are out of touch with their shoppers and offer brands and styles and prices that no longer resonate, as we’ve noted in our latest Retailer Round-Up for March with Aeropostale, American Eagle, and PacSun.
In our North American Youth Culture Study, when it comes to malls, more people are choosing other areas to shop if possible, even though malls still rank quite high. However malls in America often have a hard time getting people from one area to another and yet in Japan, it’s not uncommon for someone to go to the 7th floor for a specific themed mall because they know a certain store or brand exists there. One reason is because of technology -mcommerce isn’t that unusual. Young people can scan an ad in a magazine and get information about where that item is located. Web phones allow people to compare prices, or even deliver shout-outs when they’re in an area or near a store or brand or style of interest. This capability is already hitting America.
In America, the general thinking from malls and stores within malls, are that they expect people to come visit these massive complexes. It’s an institution. But things are changing. Malls need to make it more convenient for the shopper. We are given no directions or incentives to visit “themed” areas or specific stores that are a part of our local street tribe culture. Instead of providing the information and means to bring the product to the people where it’s convenient, i.e., online, COD delivery, vending machines, location directions, malls are still under the impression that the Great American Mall is the ultimate destination.
A great example of bringing shopping to the people conveniently, is shopping via vending machines. In Japan, this not uncommon. You can get most anything from a vending machine. Beams even showcased an entire vending machine T-shirt concept that went very well, which then Uniqlo, the no-brand brand from Japan that’s invading America, also picked up. You can get a tube of T-shirt in your choice style and color. As we wrote about in Tokyo Girls Collection, a fashion runway event that attracted 40,000 young people from around the country on March 7th, it allowed fans who attended to buy the items on the models directly via their mobile phone. This combination of entertainment and shopping and delivery meets the needs of a new generation of consumers.
Chart and slide by Label Networks
Ecommerce in general is the way of the future, which like “knowing your consumer” should go without saying. But even in our last MAGIC presentation on “Global Youth and Street Culture Fashion Trends” in Las Vegas February 18th, we were asked by many retailers and brands if having an ecommerce component was absolutely necessary. Yes. In this chart, when asked have you shopped and bought something online in the last 6 months, younger demographics said they have purchased more online in the past 6 months than less. Shopping online is increasing and it’s a vital way to bring product and access to product, as well as branding and marketing messages to a larger audience. Which is why things like pack and ship, and distribution, will play a more vital roll in North America in the near future than ever before.
Meanwhile, malls across America are becoming empty warehouses as stores are pulling out. This sort of movement already happened in places such as Nairobi, India, South Korea, and China. For some “malls” in various countries, they never even had so-called traditional stores in them to begin with, but they were busy with shoppers and farmer’s market-style pop-up shops that rent spaces for a day or a week only. In these cases, “informal” retail became the “formal” retail. This is another solution for malls in America losing their stores and traffic. They could rent these giant spaces that once housed only one store to a variety of smaller pop-up shops, or mixed boutiques, combined with local events to attract this new type of shopper and new type of brand -one that often caters to a niche, local subculture. (This movement is already happening with various craft fairs.)
Another aspect to note is how fast-fashion retailers from Japan such as Uniqlo, and Europe such as Zara and H&M, are entering into these empty mall spaces, or setting up locations on their own, in America. Our version of fast-fashion is American Apparel, which is probably the only brand and retailer that can stay ahead of trends -and create trends -at a similar speed as say, H&M. But that’s about it. There’s a growing fast-fashion movement that corresponds with the speed of technology and this new generation wanting new styles at a faster pace. This means that stores that receive orders some 6 months out, must be innovative in ways to attract new customers.
Slide from Label Networks
Some ideas, as we’ve noted in the past, include multi-concept stores such as Space15Twenty by Urban Outfitters, or boutiques that combine vintage finds and a cross section of merchandise such as footwear, books, urban vinyl toys, and music within a store. Or like Hot Topic that combines music-inspired accessories and music with apparel towards appealing to this new generation of shopper. This also corresponds with the growing pop-up shop movement whereby retail is becoming a limited-time event. Masstige also fits into this category where by top designers are creating limited-edition collections at lower price point for the masses, thus keeping the designer relevant to a new consumer group and creating excitement in shopping for the chain store (i.e. Target, H&M, Topshop).
Finally, there’s the underground 2nd tier retail scene that’s growing fast and this includes vintage, thrift -even Goodwill shopping. A quick stroll down Melrose in Los Angeles and you can see that in just the last 6 months, many stores have closed, but vintage stores have resurfaced in their place. As one long-time retailer on Melrose explained, “This used to be the area of cool vintage and thrift, especially in the last recession, and now it’s coming back again and look -the street’s packed with shoppers.”
As we noted in our North American Youth Culture Studies and European Youth Culture Studies, among 13-25-year-olds, preferences for Thrift/Vintage shopping surpassed preferences for Wal-Mart and Target. Why? Because it allows for diversity, to live in different eras, and it’s cheap. This trend is especially strong among 16-25-year-old females, and it’s very high among young people in the UK. Goodwill in America posted almost $2 billion in sales and is clearly being a leading thrift shopping location for a broad range of shoppers.
On a final note, we are often asked these days, “When will things go back to normal?” when it comes to retail and shopping patterns among global youth culture. The answer is that things won’t ever go “back to normal” because the sense of normal has changed. There’s been a significant paradigm shift in consumer spending and value. Shopping at discount is cool and necessary. This is actually something that the youth and street markets are inherently knowledgeable about. It also means that between the cracks, there are new opportunities for retail. Japan is a great source for how things will work in the future, as are the fast-fashion giants from Europe. There’s still a strong attraction to authentic Americana, and therein, combined with these other elements, lies market opportunities. Mixing and matching these concepts together will be what’s necessary for success on the other side of the retail revolution.
For more information about Label Networks’ North American, European, and Japan Youth Culture Studies, which come with a Premium subscription, email email@example.com; (323) 630-4000. Stay tuned for Label Networks%uFFFD upcoming Spring Study 2009!