Mayhem in the Middle
Warren Shoulberg -- Home Textiles Today, April 13, 2013
NEW YORK - As the home textiles industry gathers here this week for market, it finds itself in yet another counterintuitive situation: While the consuming public becomes increasingly polarized into the Haves and the Have-nots, more and more of the retailers in the space are focusing on those in the middle: The Have-somes.
The battle for the middle of the market is heating up as never before, with stores aggressively courting the shopper who wants more than the bottom of the market but can't afford the top.
Stores like Target, Bed Bath & Beyond, Kohl's and JCP are the ones zeroing in on this customer, but add in Macy's, the TJX trio of brands and the Sears/Kmart conglomeration from the bottom and an assortment of other players from Costco to Amazon to Bon-Ton Stores and you have a crowded market space.
All or most of them will be shopping the market this week looking for just the right mix of product and price to appeal to a consumer group battered by higher gas prices, increased medical expenses and payroll tax hikes.
These are the not the people benefiting from the run-up on Wall Street: These are the ones who usually don't stray very far from Main Street.
The move to the middle comes as the bottom of the marketplace feels the pressure more than ever from tightening purse strings. Walmart is still the 800-pound retailer in this space and is aggressively fighting off any incursions. Dollar store chains, which took some market share during the height of the Great Recession, have largely given most of that back as they continue to shift their emphasis from discretionary products to disposables and food.
That helps explain the move to the middle. Here's how some of the bigger players in this segment stack up as they come to market with their shopping lists.
JCP: Certainly the retailer getting the most headlines, the retailer-formerly- known-as-JCPenney is also the operation most in flux. Its well-reported move to make Martha Stewart the centerpiece of its home assortment is on hold thanks to legal procedures, so it has scrambled to roll-out a mix of products under the JCP Home, Studio and Everyday labels, layering them on top of names like Royal Velvet, Liz Claiborne and the soon-to-arrive Jonathan Adler Happy Chic and Design by Conran brands.
Penney will come to market this week with several scenarios in mind since it won't have an answer to its Martha riddle until April at the earliest.
Macy's: Win, lose or draw, the folks on 34th Street will be in control of their Martha programs at least for a few more years. What they choose to do with them is another matter. They, too, are likely to have a Column A and a Column B shopping list depending on how they merchandise their selling floor. And with rumors circulating of a shift in the Lauren business strategy coming from Polo, that could also impact buying decisions being made this week.
Kohl's: Despite the confusion at arch-rival Penney, this store has struggled to put together solid numbers over the past several quarters. Whether that signals a change in merchandising philosophy away from store-wide private labels to something else remains to be seen. What is clear is that the store is doubling down on its promotional strategy of heavy sales, couponing and discounts.
Bed Bath & Beyond: Still recovering from what most in the trade would characterize as a disastrous down-market path in its core bedding business, Bed Bath is rebuilding the department with new additions, including a major Wamsutta roll-out this spring following its still-unreported purchase of the brand from Springs Global. Other brands including Nautica, DKNY and Croscill figure prominently in its bedding strategy while over in bath, the store continues to rebrand what had been a Royal Velvet-centric towel department.
Target: We're getting a clear picture of the new spring set at Target with last week's debut of the Threshold program, which gets prime real estate both in the store and in the retailer's advertising. Dubbed "Update Classics," the new program take a casual approach to design and runs across both soft and hard home categories. Target buyers coming into market will have some initial numbers on how the new products are doing and are likely to alter their shopping lists accordingly.
While these are the stores most focused on the mid-market shopper, there are plenty of others, making for an increasingly crowded segment - especially in light of a shrinking middle class. But such strategies can be fraught with drawbacks.
One of society's greatest contemporary philosophers may have summed up best the dangers of playing the middle: "You either love or you hate. You live in the middle, you get nothing." Charlie Sheen said that.
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