Will Adversity Yield Diversity?
July 17, 2006,
Throughout the first four years of the current decade, as quotas began peeling away and retailers insisted on ever-lower prices, one question arose repeatedly: How low can they go?
Now that seemingly anything that could be commoditized has been commoditized, the quest is on for better goods at better price points. And it goes beyond Wal-Mart's layer-on-the-luxe initiative.
Fast-fashion apparel retailer Hennes & Mauritz is readying a new concept store that will offer higher fashion at higher prices than its H&M cheap chic boutiques.
At Bloomingdale's flagship Manhattan store, the new and wholly reconceived intimates department has shorn itself of moderately priced stalwarts such as Maidenform and turned its emphasis to sexier, up-market brand names.
Home Depot's relatively new 10 Crescent Lane catalog propels the company into the realm of $675 coverlets, $1,200 rugs and $10,000 barbeque grills– none of which are available in its home centers or even its upscale Expo Design Centers.
I'm not saying chain retail prices have hit bottom, but maybe the idea that constantly lowering prices will forever boost sales has finally hit the wall.
Further, if the fearfully anticipated economic slowdown does materialize late this year or in early 2007, retailers need to be armed with some “wants” to entice shoppers beyond the “needs” departments of the store.
And because well-heeled Americans sail through recessions with their shopping unchecked, it doesn't hurt to have an up-market arrow (like 10 Crescent Lane) in the corporate quiver.
If, in the end, this trend serves to make stores in all channels a bit more diverse, then hallelujah.