What will 2017 bring to the retail industry? Accessories caught up with Marshal Cohen, Chief Industry Analyst, The NPD Group, Inc., who puts the past data, current thoughts and future projections into his crystal ball for us. Here, some notes from our chat.
Are you optimistic for women’s accessories in 2017?
I am. I think 2017 represents a year of transition for consumers. And really what’s happening is that they’re spending more than ever. But it doesn’t mean they’re buying more product than ever. They’re spending more on big items and more on little items … and less in between.
Does this represent a new paradigm shift?
A decade ago, we saw that where apparel went, so went accessories. If apparel did well, then accessories did too. But now, accessories are standing on their own, as well as taking the lead. For example, when we look at technically advanced products, look for accessories to take advantage of this. Think of electronics, so much of the innovation came from the accessories as they are more affordable than, say, the 60-inch TV. There’s an opportunity for accessories that doesn’t exist elsewhere…as long as they stay innovative and relevant.
What were the fashion/accessories surprises for you in 2016? Let’s start with what did not do well… What surprised me was that the handbag business just dropped off. It had done so well for so long but what happened was the same thing that happened in footwear and apparel: they didn’t play into hand of consumer but rather decided to create their own looks and trends. Meanwhile, the consumer decided she wanted to do her own thing. She had more athleisure products in mind, dressed more casually and wanted more innovation and technology. The handbag business just stayed the course that brought them success but didn’t evolve with the consumer, and now the industry is playing catch up.
With the minibag?
The minibag was the hot trend for several reasons because of met four criteria: convenience, need, desire and price. It worked out well for the classification, but it challenged the industry because the pricepoints were lower. So now they have to find a way to get bigger, better product into the hands of the consumer. And that means that innovation has to become paramount.
What did well that was a surprise?
I would say the continuation of the small product—the key fob, the change purse, the bag charm, or some of the other compartmental items. The consumer had a desire to keep adding to the collection in the bag … and outside the bag. Bag inside the bag, and the bag outside the bag. Lasted longer than people thought. The fur pom-pom charm lasted longer than we thought it would.
And Black Friday/Cyber Monday… how did they fare compared to last year and what does this signal for 2017?
Well, 2015 was a front-loaded holiday: a lot of the business came early in the holiday season, then fizzled out toward end, then ultimately did ok in the last two days. For 2016, it was front loaded and back loaded. Once again, we pushed the envelope to have her spend earlier but we have that extra weekend to create an opportunity.
Why is retail falling short these days?
It’s a combination of things. First, discounts. Second, consumers are purchasing things besides product. They’re spending but they’re not necessarily buying more product. So the gifts are shifting. Now it’s all about the experience, or the gift card, or just less expensive gifts, or more promotional product. The stores have been on sale for two months now. So she thinks: “Why should I buy anything at full price when I can get it elsewhere for a deal?”
You talk about the stores offering experiences, but do they have the opportunity to sell experiences as well?
Yes, a hundred percent! The stores have to get back to that… be part of the lifestyle of the consumer… not just the product place to buy. That’s what the internet provides. I don’t need to go to the store to buy that. But stores need to sell them the experience as well the product to go along with it.
How would you define that?
I call it omnipresence (not omnichannel!). This is about the before, the during and the after the transaction. I have to sell you on what’s the right thing to buy, and the right thing to do. Want to learn how to live a healthier lifestyle? What do you have to do to start that? Where do you have to go to learn about it? Well the store needs to be that place…then they need to sell you that product. Then in the after, they need to have a dialog so you’re loyal to that store. But it has to match up with what that store represents. If you try to sell everything to everyone, you end up being nothing to everyone. It’s about being authentic, being original and being all encompassing.
Like a sporting goods store selling fitness or sport experiences in addition to product?
Yes, but they’re not doing that…and that’s the point.
Accessories don’t happen in a fashion vacuum, they either relate to apparel or just what’s happening in consumer trends, behavior, etc. What trends are influencing accessories most now?
It’s hair and this whole shift in hair style…this lift in the hair. And the casualization of fashion and the continuation of the athleisure movement.
So how will athleisure evolve?
It’s going to be about the transformation of athleisure. It’s going to get a bit more sporty, and the sporty business will get a bit more athletic. Then you have the propensity for discovery. Give me a product that makes my life better. And give me a product that’s unique and new and different, so I feel there’s a reason why I should buy it.
So that’s lifestyle…
Well to me that’s what the trend is all about. We’re killing ourselves if we think the flower print will be the determining factor in why to buy that product. We don’t buy that way anymore.
Are accessories getting more “seasonless”? The weather is unpredictable, consumers want longevity in what they purchase, and stores are always struggling to deliver what consumers want, when they want it? That said, do items with more longevity mean less urgency to buy?
The customers told us…demanded… that they be able to get what they want, when they want it, where they want it, and at whatever price they want it. What does that mean? She’s not buying 6 months in advance. She’s not looking at the trends that are likely to occur. She’s asking, ‘what is the trend now?’ She’s not going to buy something hoping it comes into style. She’s done that. Now we’re in a place where the brands/retailers have to be much more nimble. And much more in tune with what the consumer is driving. It’s a foreign place for the retailers. They’re not used to that. They’re used to driving the trend but now the consumer is dictating.
Timing of fashion has always been an issue. Do you think 2017 will finally see it aligning better?
Look [at press time], we’re just getting cold weather outside now but the stores are already discounting the merchandise. And the consumer hasn’t even bought it yet! I’ve been talking to retailers for 5 years about this, and this is the first year that retailers are beginning to ask the question: ‘Are we in the right place at the right time with the right product?’ It’s a 126 year old trend—the Merchandise Calendar—that says Spring [at retail] happens in February and Fall happens in August. Why would you do that? Why would you bring in fall in the warmest month and spring in the coldest month? It doesn’t make sense any more. She doesn’t care what season the calendar says, but what the weather says.
Retail has been disconnected…
They have to change the paradigm. They have to break through. It’s not about the product, but it’s about the type of product. Before the consumer had no choice but now she can go online and buy that seasonal item elsewhere from someone who has it when she want and needs it.
What about technology? Augmented Reality, Virtual Reality, Artificial Intelligence… We’re just at the beginnings. How will brands and stores start using these in 2017?
I think some stores will use it. The fashion industry will lag behind. The accessories has the opportunity to take the lead on it. That will serve them well if they get ahead of the industry. Accessories will be the place where they can do it. Think of how the tech industry used accessories for their technologies…they’re the more affordable side of the equation. That’s what really worked well (tablets, etc… now you can buy a 60-inch TV). But it took 5 years to get there. Accessories have the biggest opportunity to bring in intelligence and the next generation of technology to the consumer. They need to take the lead on that rather than follow the trends.
From a data gathering side or from a usage side?
Both… From a gathering side, retailers and brands need to be more intelligent about your needs. Before you even know you need a new wallet. I’m going to tell you that you need a new wallet. Or that your bag won’t be big enough for the next trend. I need to tell you that. It all needs to be understood and communicated to the consumer. But it also has to be technologically advanced enough that the consumer wants it. Instead of playing catch up. And it has to be innovative.
What about wearables?
It’s in the second generation. Take fitbit. It’s not different enough so now it’s the late adopters that are now driving that trend. Until they innovate it to the next level, it will remain stagnant. That’s why innovation is so critical. The tablet hasn’t changed in five years, which is why it’s virtually nonexistent. And a phone has to do something different. Unless your contract has expired or it’s “crapping out,” you don’t need a new phone. So now it’s about things that power up your gadgets. The accessories side of the equation is the biggest growth in that. Instead of trying to acquire more, you just make what you have better. Accessories are the biggest part of tech.