presented by: mary brett whitfield senior vice president apparel webinar series february 14, 2014 a...

Presented by:

Mary Brett WhitfieldSenior Vice President

Apparel Webinar Series

February 14, 2014

A Not-so-Basic Look at Apparel Basics… and other current topics in Apparel Retailing

© Copyright 2014 Kantar Retail

Copyright © 2014 Kantar Retail. All Rights Reserved.

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Disclaimers

The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.

This seminar is not endorsed or otherwise supported by the management of any of the companies covered during the course of the workshop or within the following slides.


Agenda

• Holiday Wrap-Up and a Look Ahead

• A Tour of Apparel Basics

• Shopping Approaches

3


Happy Valentine’s Day!

4


Agenda




5


Holiday 2013: Online Led Sales Growth

6

* Holiday is measured as fourth quarter: October, November and December**Topline measure excludes auto, fuel, & food service channels; includes auto parts stores*** Nonstore sales include catalogs and TV home shopping in addition to online sales

Topline: Holiday 2013 Forecast and Actual*

Prior Year vs. Forecast and Actual Holiday 2013

4.0% 3.5%

10.5%

4.7%3.4%

12.5%

4.1% 3.6%

9.0%

Topline retail sales measure**

Brick & mortar stores

Nonstore Including Online***

2012 Holiday Prior Quarter 2013 Holiday

CHANNEL BREAKOUTS

Source: U.S. Department of Commerce, and Kantar Retail analysis

But nonstore retailing grew slower than 2012


Holiday Spending Steady …

7

… though fewer shoppers participate in holiday gifting

Source: Kantar Retail ShopperScape®. December 2007–2013

Self-Reported Spending on Holiday Gifts(average among all holiday gift shoppers)

Percent of Shoppers Purchasing Holiday Gifts

Note: Arrows indicate significant difference vs. prior year (95% confidence level)


Amazon Becomes the Top Holiday DestinationLeapfrogs Target in 2011, Walmart in 2013

Source: Kantar Retail ShopperScape®, December 2011, December 2012 and December 2013 8

Note: Arrows indicate significant difference from Holiday 2012.


• Data points indicate that “Limiting” is on the agenda

–Fewer retailers shopped for back-to-school

–Fewer retailers shopped for holiday gift giving

–Lower rate of category purchase incidence across myriad discretionary and non-discretionary categories in Q4

Evidence that Shoppers Drawing Boundaries Mounts

9Source: Kantar Retail ShopperScape®, December 2010–2013


Fewer Stores on List, but More Purposeful Conversion rates trended up across most retailers & channels

10

Holiday Gift Shopping: Top Conversion Rates*(among all holiday gift shoppers who shopped retailer)

*Conversion calculated as the percent of retailers’ holiday gift shoppers who also report buying a gift there

Source: Kantar Retail ShopperScape®, December 2012 and December 2013


Holiday Shopping Shifts OnlineProving ground for building online shopping routines

Source: Kantar Retail ShopperScape®, December 2013 11

Budget shifted in favor of online/Cyber Week, away from Black Friday

Budget shifted in favor of online/Cyber Week, away from Black Friday

Holidays set stage for year-round online

shopping

Holidays set stage for year-round online

shopping


Overall, Shoppers Spent More OnlineEven as penetration of online shopping and purchasing stalls

Source: Kantar Retail ShopperScape®, December 2010, 2011, 2012, 2013 12

Average spent online on

holiday gifts:

Average spent online on

holiday gifts:


Online Conversion Rates Lag Conversion in Aggregate for Multi-Channel Players

Source: Kantar Retail ShopperScape®, December 2013 13

Conversion*

*Conversion calculated as percent of shoppers who purchased; arrows indicate significant increase from 2012


Apparel’s Popularity Grows on Amazon Moved into number four gift spot in 2013 holiday

14Source: Kantar Retail ShopperScape®, December 2011, December 2012 and December 2013

Top 5 Gift Purchases on Amazon.com(among all holiday gift shoppers who shopped Amazon.com)


Clothing in Middle of Pack re: Online Penetration

• Consumer electronics/ computers have biggest ramp up

• Softgoods retailers and categories increasingly affected

• Consumables categories just a matter of time

15

18% of clothing sales online by 2018

Online Share of Goods Categories*

Source: U.S. Department of Commerce and Kantar Retail

Clothing

FurnitureToys & sporting goodsBooks, magazines, music & videos

Food & Alcohol**

Computer products, electronics, appliances & office equipment

Drugs & HBC

*Goods categories exclude auto, fuel, and tobacco categories

**Read as: In 2018, 3% of Food & Alcohol spending will be online (and, conversely, 97% of Food & Alcohol spending will remain in stores)


Goods Category* CAGR ‘08–’13

CAGR ‘13–’18FC

2.7% 3.6%

4.6% 5.9%

2.6% 3.7%

1.8% 4.4%

1.8% 4.1%

3.2% 4.1%

3.0% 4.6%

Goods Category Totals* 2.9% 4.3%

Five-Year Category Spending Outlook Improves

16

USD Billions


*Excludes Autos, Fuel, and Tobacco**Includes prescriptions, OTC drugs, & health & beauty categories***Includes miscellaneous other durable & non-durable goods categories

$2,568

$2,965

$3,661

Growth lifted by incomes, inflation, spending intentions

Clothing & Footwear

Furniture & Home FurnishingsMedia, Sporting Goods & ToysOther Miscellaneous Goods***

Food & Alcohol

Electronics, Appliances & Office Equipment

Drugs, Health & Beauty Care**

• Drugs/HBC propped up further by health care reform impact

Consumer Spending and Growth Rates by Goods Category


Goods Category* CAGR ‘08–’13

CAGR ‘13–’18FC

OnlineImpact

’13-’18FC

14.5% 14.7%

2.3% 3.3% -1.0 PPT

2.6% 3.2% -0.4 PPT

4.2% 5.3% -0.6PPT

1.4% 2.1% -1.6 PPT

-0.6% 0.7% -3.7 PPT

1.2% 3.0% -1.1 PPT

1.7% 1.5% -2.6 PPT

2.3% 4.1% -0.5 PPT

Goods Category Totals* 2.9% 4.3%

Online Impact on Store Sales Moderate for Clothing

17

USD Billions


Clothing & Footwear

Furniture & Home FurnishingsMedia, Sporting Goods & ToysOther Miscellaneous Goods***

Food & Alcohol

Electronics, Appliances & Office Equipment

Drugs, Health & Beauty Care**

Categories Online

Categories In Store

*Excludes Autos, Fuel, and Tobacco**Includes prescriptions, OTC drugs, & health & beauty categories***Includes miscellaneous other durable & non-durable goods categories

$2,568

$2,965

$3,661

Consumer Spending and Growth Rates by Goods Category


Apparel & Footwear Sales Growth: Online vs. StoreGrowth Forecast vs. Current and Prior Year

Apparel & Footwear: Improving Topline Growth

• Pickup in 2014 will be held back by weaker pricing compared with recent years

• Gains will remain skewed online, forecast to reach18% of sales in 2018

• Online impact will limit category growth in stores to between 1% to 2% annually

18

But strong online gains will keep in-store gains weak

Source: U.S. Department of Commerce, and Kantar Retail analysis

FORMAT BREAKOUT

Online Penetration2003 2008 2013E 2018F2% 6% 12% 18%


Shoppers More Optimistic about Apparel Spending than They’ve Been in Years

Source: Kantar Retail ShopperScape®, December 2012 and December 2013 19

All Female Shoppers

Gen Y Gen X Boomers SeniorsDown Market

Middle Market

UpMarket

Spend More

Spend About the

Same

By Generational Cohort By Income Market

Plans for Spending on Wardrobe in Coming Year(among female primary Household shoppers)


Despite Macro-Economic Uncertainty, Spending Intentions Steady

Source: Kantar Retail ShopperScape®. June 2008–December 2013 20

Spend Much/Somewhat More

Spend about the Same

Spend Much/Somewhat Less

Retail Spending Intentions in Coming Month Compared with the Same Period Last Year (three-month moving average)


Agenda




21


Basic Styles Are Everyday Go-To for More than 4 in 10 ShoppersBasics even more prevalent everyday wear for men

22

Everyday Style

Source: Kantar Retail ShopperScape®. September 2013


Basics Are Perennially at the Top of the List

23

Plans for Adding to Wardrobe in Coming Year(among female primary household shoppers)

Source: Kantar Retail ShopperScape®. December 2013


40% of Kohl’s Assortment Features “Classic” Styling

Source: Kohl’s Fact Book 24


Apparel Has Been a Relative Bright Spot for WMT

Source: Company reports, Kantar Retail analysis 25

Walmart US Performance by Department, Quarterly


UNIQLO: Coming Soon to a Market Near You?

Source: Company website and Kantar Retail analysis 26

The offer: “Our clothes are functional, designed with innovative features, and are available in a wide range of colors and styles … “.

© Copyright 2014 Kantar RetailSource: Kantar Retail store visits 27

UNIQLO’s “Life Wear”:Clothing to improve everyday life …

© Copyright 2014 Kantar Retail 28

… with a layer of capsule and specialty collections

Source: Kantar Retail store visits


• Strengths:–Sharp price points

–Cross-generational/family appeal

–Technology and fabrication adds utility

• Weaknesses:–Shopping experience

• “Sea of sameness”• Engagement

–Assortment sameness

The UNIQLO Concept: “Made for All”

29Source: Kantar Retail store visits, Kantar Retail analysis


Keeping Shoppers Interested in Basics

• Show versatility

Source: Company Web sites, Kantar Retail analysis 30

TOPSHOP




• “Not-so-Basic”: A Modern Refresh


FOREVER 21





• Be “Best”


H & M





• Be “Best”

• Educate and inform


Target





• Be “Best”


• Call to Action


American Eagle Outfitters





• Be “Best”


• Call to Action

• Evolve


Banana Republic





• Be “Best”


• Call to Action

• Evolve

• Demonstrate End Use


H&M, Old Navy





• Be “Best”


• Call to Action

• Evolve

• Demonstrate End Use

• “Mass Out”


H&M, Old Navy


Agenda




38


Convenience Most Important to Mass Apparel Shoppers

Source: Kantar Retail ShopperScape®,September 2013 39

Among Shopper Who Spent Most on Casual Apparel at …

Which Statement Best Describes Attitude toward Apparel Shopping(among female primary household shoppers)


All Shoppers Favor “Bite-Size” Shopping

40


Source: Kantar Retail ShopperScape®,September 2013



Value Department Store Shoppers Most Likely to Make Special Trip

41





Mass Shoppers Are Truly “One-Stop” Shoppers … Apparel Specialty Shoppers Have Bigger Store Set

42





Department Store Shoppers Are Most Likely to Buy on Impulse

43





Shoppers Who Think Shopping Is Fun Most Likely to Be on the Mall

44





Specialty Stores Attract Treasure Hunters

45





Specialty Store Shoppers Most Likely to Have Done Pre-Trip Research Online

46





Specialty Store Shoppers Also Most Likely to Buy Online

47





Value Department Stores

48





Prevailing Approaches to Apparel Shopping

• Usually shop at few retailers that are conveniently located

• Tend to shop for clothing “one item at a time”

• Shop for clothing on trips specifically for clothing

• Look forward to shopping for clothes

• Like a predictable assortment (vs. treasure hunt) …

• … but like to see what’s in stores vs. researching online in advance

• In-store vs. online

• Buy at the end of the season

Draws:

• One or two regular retailers vs. Several different based on needs

• Buy against plan for the season vs. Buy on impulse

49Source: Kantar Retail ShopperScape®,September 2013


Channels Where Shoppers Diverge from Average

MassValue

Department Store

Apparel Specialty

Store

Traditional Department

Store

Will Go Out of Way to Favorites

X X

“Big” Trips X

Shop When Out for Other Things

X

Broad Store Set X X

Impulse Purchasing X X

Shopping for Clothes Is Fun

X X

Want a Treasure Hunt X

Pre-trip Online Research X

Online Shopping/Buying Saves Time

X

50Source: Kantar Retail ShopperScape®,September 2013


Digital Shopper Forum | February 25–26, 2014 | Chicago, IL

Participate in interactive, thought-provoking

discussions.

Network with the who's who of your peers and the experts

in the industry.

Learn from Kantar Retail experts' on the subjects of

digital, shopper, omni-channel, and big data.

Mention this webinar to save $100 off of your event ticket …

*if your company doesn’t already have a block of pre-

paid event seats

For more info on this event, visit our website

http://www.kantarretail.com/digitalshopper2014/

Or, email us [email protected]


Questions?


• Not-so-Basic Look at Basics


Submit questions on Q&A panel on right side of screen

52


Contact:

Mary Brett WhitfieldSenior Vice [email protected]

T:+ 1 614 355 4010www.kantarretailiQ.com

presented by: mary brett whitfield senior vice president apparel webinar series february 14, 2014 a...

Documents

kantar retail copyright

kantar retail shopperscape

kantar retail amazon

kantar retail analysis

opinions of kantar retail

kantar retail fewer

actual holiday

kantar retail data points