Value Retailing: It’s chic to be cheap

As reported by WGSN, the consumer is evolving, with clothing purchases revolving around needs rather than wants. Consumers who never previously shopped for value are trading down and shopping at value retailers. These consumers are known as the “frugal fashionistas” who are embracing bargains. Walmart has tried the value-retailer approach by offering a line from Norma Kamali, a women’s apparel designer, at affordable prices. JC Penney is also using the value-retailerstrategywith its I Heart Ronson line, priced between $50 and $65. The value-retailer leader in the United States continues to beTarget with its Go International program, which allows shoppers to have designer styles at an affordable price. Target recently announced its latest designer partnership with Karen Erickson and Vicki Beamon, chic jewelry designers whose line, Erickson Beamon, will be offered through June 26, 2009.

Value retailing is more mature in the United States, with consumers already used to looking for bargains, while European countries are beginning to introduce bargains. The value-fashion area within European markets has an opportunity for growth. One of the key differences between European and American markets is the celebrity and designer endorsement. European retailers use public relations efforts like retailer George at ASDA which has introduced a real-women’s ad campaign, using the funds that would have applied to a designer endorsement to increase the quality of items.

We found it compelling that value retailers’ offerings are including the commodity-basics to affordable-designer ranges. The affordable-designer range is needed to capture the frugal fashionista at the value retailer. However, in Europe, a trend-right product does not need a celebrity designer tie-in. We found it interesting how different the power of celebrity is in two fashion forward cultures.

-Contributed by Natalie Bosler