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Retail Strategies Evolve as Shoppers Shift Spending Habits

Recession aftershocks. A lack of credit. High unemployment. These are a just few of the major hurdles currently confronting retailers as they try various strategies to turn around businesses after several dreary seasons.

The psychological recession currently underway in the U.S. is affecting consumer behaviors significantly, says Victor Uphaus, a fashion merchandising and fashion design instructor at Miami International University of Art & Design. Lingering consumer fears mean shoppers follow the same cautious spending patterns en masse, he says. Because consumer purchases make up two-thirds of the American economy, those belt-tightening moods have a dire effect on the retail bottom line.

“This is basically a permanent change in consumer minds,” says Uphaus, who also works as a store manager for men’s retailer J. Lindeberg. “Because even when things improve, they will still have this impact that has changed their behavior.”

As Uphaus sees it, election-year politics in 2008 created a sense of economic doom that affected everyone from Wall Street to Main Street.

Fast-forward to 2010, it’s a vicious cycle. Banks can’t or won’t lend to small businesses, meaning those retailers are struggling to buy the inventory they need to sell to consumers and pay back their original debt, Uphaus says.

“In reality, it’s a bigger mess than what people think it is.”

While retail sales for 2010 are improved somewhat over last year, Uphaus points out that 2009 was an abysmal year for retailers. Not until their books reach 2007 levels will retailers be happy, he says.

The hardest hit category of fashion retail has been menswear, Uphaus says. Whereas some women will always shop as a pastime or to fulfill a need to be trendy, and children need clothing as they grow, a man is typically the last to shop for himself when he needs to meet his family’s needs, he says.

“A man is not going to buy a suit when they have to pay the mortgage or buy the car,” Uphaus says. “They have to keep the family happy first.”

Lila Nikole Rivera, a 2005 fashion design graduate of The Art Institute of Fort Lauderdale, launched her own swimwear line as soon as she finished her fashion design degree. Rivera says her swim business, the Lila Nikole Collection, enjoys a boost in sales from February through September, and she’s pushing her international market to keep sales up throughout the year.

For Rivera, providing a durable, high-quality product and meeting the demand from shoppers are the crucial elements to her success. But with economic conditions in a state of flux, purchasing behaviors are changing, and retailers must keep up.

Rivera says she sees today’s shoppers buying what they need rather than splurging, as they would have before the economic downturn.

“The whole fashion industry has felt the effects of the economy,” Rivera says. “Everyone’s sales have been down, but for 2010, you can feel the change and growth coming back.”

As for the future of fashion, Rivera sees retailers learning how to incorporate eco-friendly fabrics and technology into their product offerings. Rivera herself has big plans to make Lila Nikole a household name, by expanding the brand into accessories and men’s and children’s swimwear.

Tom Julian, trend expert and author of Nordstrom Guide to Men’s Everyday Dressing (Chronicle Books, $17.95,, also sees long-term changes in consumer shopping habits due to the financial meltdown.

“As the economy shows signs of recovery, consumers are shopping again but have select criteria to meet before a purchase is made,” Julian says. “Consumers are more in control and cross-shop from high to low, from value to sale as a normal part of their shopping behavior.”

Among the many changes in consumer practices is the trend toward value, which each shopper defines differently, Julian says. Luxury consumers, for example, have moved away from conspicuous consumption to a less-is-more attitude, strongly affecting sales of high-end retailers, he says. Trendsetters are now more likely to mix high- and low-market items to create their own fashion statements, popularizing fast fashion. Julian says he also sees more consumers shopping online before making a purchasing decision.

Like other hard-hit industries, Julian says, the fashion business has addressed its operating inefficiencies and adjusted accordingly. The retail wisdom of attracting customers with the right product at the right price still holds true, he says.

Fashion insiders are predicting opportunities in private-label offerings in department stores, such as the partnership between Tommy Hilfiger and Macy’s, Julian says. Other retail trends include the emergence of lifestyle centers over malls; increased apparel production in China rather than in the United States or Italy; shifts in the buying calendars for retailers and consumers due to global warming; and the expansion of vertical retailers such as Zara into the U. S.

“Retailers are seeing positive numbers now and hope it’s a sign of better, more profitable days to come,” Julian says. “Fine-tuning business models is completed and the new retailer is smarter, with a better focus on the needs and desires of their shopping demographic.”

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