>The decline of the "aspirational consumer" and rise of predictive software

November 16, 2009

>Tom Madigan, a Roulston Research Consumer expert, recently attended the WWD (Women’s Wear Daily) conference in NY and reported back to us some points that came up. The overwhelming consensus at the conference is that the “asprational consumer”, the consumer with the “leased car and rented suit”, is gone. As a result, for example, Neiman Marcus’s business went from 5 Billion to 4 Billion overnight. These retailers that catered to this psychographic have to restructure their businesses to find a model that will be sustainable without them.

Most retailers claim that they’ve taken a lot of cost out of system. But the challenge now is how do they appeal to a larger share of the wallet of their now smaller customer base? They believe the answer lies in better aligning their inventory with demand. It’s a combination of selling “wear now” clothing, which means smaller runs with more frequent deliveries and “fast fashion” clothing which can be worn year round.

“Wear now” is about better matching the weight, color and quantity of their stock to demand. Stocking items that consumers believe that need to buy now, before the store sells out of the item. It’s about getting better at localization, literally taking retail back to where it was 50 years ago. Better knowing the attributes of the customer, so that the store can make a better stocking decision.

Some stores still base the stocking decision on employee opinions, but many have moved this function over to software. Computers crunching the demographics and buying habits for an individual store produces more accurate results.

Retailers hope that these changes will get their customers off of their “addiction to sales”. If the customer sees something in the store they need immediately, and understand that it may not be in the store the next day, they (the retailers hope) will be more likely to buy it based on need rather than based on price.

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