In Times of Unpredictability...

Let's face it: the economy is unpredictable.

In one day, we may read from one source that the luxury market is improving; yet another will report news of closeouts and bankruptcies. We are living in difficult times and the future of our economy is as predictable as the weather these days here in New York City.

photo via: NY Times

So in order to stay afloat, everyone, from luxury brands to fast retailers are rethinking their game strategies. Today, the on-going trend among luxury brands is mass appeal branding. Just recently, Dallas-based luxury retailer Neiman Marcus opened a new line of outlet stores called Last Call Studio. Specifically located in suburban areas or strip malls that are not outlet centers, the stores will specialize in moderately priced goods aimed at the value-minded shopper who "may not have the reach level to buy the fine apparel that Neiman Marcus offers," says Wanda Gierhart, Neiman's chief marketing officer.

Instead of selling leftover stock from their department store lines, the store will focus on more affordable pieces from their existing lines that they already carry. In addition, they will also stock more heavily from their lower-end lines, bought directly from vendors. Unlike outlet shops, all of their merchandise will be in season and considered "new." And aware of the increase of online-shopping, they also launched an accompanying website earlier this month.

This new strategy is a clear reflection of the post-recession retail world. With an excess of unoccupied store front real estate and most traditional outlet stores having too little clearance merchandise to sell because retailers have cut inventory, Neiman's concept is one that works around today's financial circumstances. It also feeds into a market for the price-conscious shopper who still wants value and quality for their dollar. As much as it is a financial necessity, Neiman's new store concept is a smart response to today's economic situation.

Kinder Aggugini's moodboard for Macy's

photo via: NY Times

On the other hand, Macy's, a much more mainstream department store, recently joined the bandwagon of designer collaborations with plans to work with London-based designer Kinder Aggugini. The high-low concept is nothing new as H&M, Target, Gap, and Uniqlo have all already been doing such collaborations for years. However, it is a bit surprising that Macy's, a generally conservative department store, is collaborating with Kinder Aggugini, an edgy, rising designer, still relatively unknown in the States.

The collaborative collection plans to be sold at about 250 store locations, with prices ranging from $50 to $300. Attempting to offer more fashionable products, the collaboration hopes to attract more younger and trend-focused customers.

In times like today, brands must be strategic and wise in their decision making process. Even Uniqlo, the Japanese-based fast retailer, which had soaring sales this past year with more than 80 new shop openings since August, are facing financial difficulties. Due to poor product planning and supply chain management and marketing, the company has found itself in a downward slope.

The economy continues to affect the retail industry across all borders, leaving none unscathed. Although there is no bulletproof plan, creativity and smart decision making in a timely fashion proves to be only route for success.

Overcoming Obstacles Through Creative Strategies

To some, the recession may be a distant memory of the past, but to most retailers, the effects of it's sting remains painfully present. As unemployment is still high, house values are low, and banks continue to be less reluctant to lend to consumers, the majority of people are shopping with caution.

And while many retailers in return have slashed their prices for the bargain hungry, a few have risen above the norm and put their creativity at the forefront of their business strategies to bring back their business. Today we highlight three brands that have taken an unordinary approach in response to today's market and show that you don't always need to resort to lower prices in order to stay afloat.

image via: NY Times

1. Luxottica 
The $6.6 billion Italian-based eyewear company with retail outlets including Sunglass Hut and LensCrafters experiments with a concept store that makes eyewear shopping a full on event. Their first store Eye Hub opened three weeks ago in Hawthorne, Australia with hopes of building ten to fifteen more in the United States, China, and Britain, over the next three years.

Costing two to three times as much as a regular LensCrafters store in the US, the Eye Hub functions beyond a traditional retail store and is more like a live research and development lab. Customers are first greeted by the concierge who then gives a short lesson about the store from a Web home page. From there, they are asked how they would like to interact with the store. From the initial entrance at the store to the final purchase, everything is all about having a personal experience.

image via: NY Times

For those who are looking for sporty eyewear, there are wind machines, treadmills, and machines that stimulate glare on snow or water so customers can actually test out the products in specific conditions. There are also 41 touch screens that function as both mirrors and cameras so people can not only just see how they look in photos, but also send them out to Facebook or other websites to ask for a friend's advice before making the final purchase.

Similar to the Apple stores, the Eye Hub has something like the Genius Bar where a section is designated as a center for eye problems and prescriptions. There are also salespeople walking around the store who can make your final transactions so you don't necessarily need to wait in line at a cash register to make a purchase.

Experimenting with new ideas during today's economic state is rare, making Luxottica stand out against the crowd. But will this new shop encourage customers to buy a product and not just visit for the experience? Only time will tell. (source: NY Times)

photo via: Financial Times

2. Hermès
Famed for its Kelly and Birkin bags, the Hermès brand takes an unusual move with a launch of a new brand in China in September. Shang Xia, translated as "up and down" in English, would remain completely separate from the main Hermès line and would be branded as completely Chinese.
Florian Craen, the Hermès managing director in North Asia, describes, "it is developed in China with the Chinese team, based on Chinese craftsmanship and broadly made in China."

This is an interesting approach to getting into the Chinese market. According to Shaun Rein of China Market Research group in Shanghai, most Chinese consumers do not want made-for-China products. Studies have shown that shoes, handbags, and jewellery that are of foreign design sell much better than local market products. Perhaps for these reasons, Shang Xia will start by selling home products such as tableware and furniture with a traditional Chinese theme. Whether or not they will expand to fashion remains unknown. The growth of the company will be determined by how it sells in the market. (source: FT.com)

3. Nike+
With the technological innovations of today, many brands have began interacting more with the web to promote new marketing campaigns and advertisements. Facebook, Twitter, and other forms of social media have been the biggest influencers of change for brands today. However, Nike has taken this idea to a whole new level with Nike+, integrating digital technology into their actual products. Nike+ uses digital sensors integrated into running shoes to measure, analyze, and share performance data. It also has a program for iPods made especially for runners who like to listen to music during their workout. Since its launch, it has sold 2.5 million Nike+ kits. Not only has this been a financial asset to Nike, but has created a deeper relationship between its brand and their consumers.

                     

video via: YouTube

More recently, at the start of the last World Cup, Nike also launched a new football boot called the Mercurial Vapor SuperFly II. It came with an access code for Nike Soccer+, a digital coaching program available via web or any smart phone. Players can log in and watch instructions given by world-class players and coaches. As the Nike Soccer general manager states, "you are not just buying a boot, you are buying a total game improvement package." Nike represents the new, modern product of today. The brand is no longer just about the product, but the total experience, and incorporating the experience into a wider community. Nike is already way ahead of the game and their success is a lesson for all brands seeking ways to adapt to the changing times. (source: Business of Fashion)

News flash: Openings and closings

The tab for Topshop's opening bonanza last week, rife with celebrities, cocktail parties in-store and at The Box, and two nights of dinners at Balthazar, is estimated at a hefty $1.8 million (and please, did they count the cost of construction -- including moving stairways around -- on that huge space, not to mention renting it for over a year without selling anything?). A much-needed infusion into the New York economy, for sure. And they're not the only new kids on the block: French chain Zadig et Voltaire is officially opening their Meatpacking District shop, and -- any day now! -- Derek Lam is opening a surprisingly huge store in Soho, designed by star Japanese architects SANAA. 

Meanwhile, restoring our faith somewhat in the taste of the American public, Kira Plastinina's last sparkly, pink US store closed last month after the Russian teen's company declared bankruptcy in January, an event reduced to a footnote in a Forbes article about how US customers are choosing H&M and Zara over Gap and Ann Taylor. Sorry, Forbes, but that's not how it works; we seriously doubt that 40-something professional women have suddenly decided they'd like to stop wearing their preppy weekend basics and conservative suits, and stepping out in an XXXL shirt and comfy sneakers, as H&M recommends this spring. Not mentioned in the article was Liz Claiborne, currently resurgent on the charm and design skills of Isaac Mizrahi; let's face it, folks, it's just not all doom and gloom out there.

Photo via WWD