DALLAS — For moderate apparel stores, the supposed solutions to surviving and prospering are deceptively simple: Offer value, assortment and a fast, easy shopping experience.
This is achieved by staying focused on the target customer and not forgetting the season’s to-die-for fashion items, which are sure bets to have strong sell-throughs if they hit the selling floor at just the right time.
Those merchandising mantras have reverberated through consumer focus groups, off the walls of tension-wrought board rooms, down the aisles of Kohl’s and Target Stores and past the ever-shrinking profits of other retailers who refuse to listen.
It seems textbook easy, and as they head into the first half, more moderate retailers are turning to the keep-it-simple and know-thy-customer schools of thought.
The stores that successfully translate theory into practice have also learned the importance of reinforcing their own brand identities.
With creative marketing and advertising campaigns, moderate stores are also taking steps to take back market share from savvy mass merchants or powerful better department stores that promote and deeply discount their offerings in order to lure in moderate shoppers.
Frederick Mershad, chairman and chief executive officer of Elder-Beerman Stores, the Dayton, Ohio-based moderate chain with 64 stores across eight Midwest and Eastern states, believes that offering a value-based and quick-and-easy shopping experience to a highly defined target consumer is the key to long-term growth.
The chain is now showcasing its philosophy in a new-store prototype that’s being rolled out over the next few years.
Five of the new models, which average 55,000 square feet, compared to 75,000 square feet at pre-existing Elder-Beerman units, are already open and moving ahead of the curve in sales gains.
“How do you grow a moderate retail business? By listening to what the customer wants,” reasoned Mershad.
“We recently completed a very intense customer research process. We did interviews with 9,200 customers across eight states. The resounding response is that moderate female shoppers demand value with every purchase.”
Mershad said that straying from moderate price points toward the better niche or trying to convince the moderate shopper to trade up is a mistake and only confuses consumers.
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“As an industry, moderate retailers have turned over too much floor space to better merchandise. And a lot of the discount and mass stores have subsequently keyed in on moderate and taken the business away from traditional moderate department stores,” said Mershad.
To prevent or stem the erosion, in February Elder-Beerman plans to convert more floor space to moderate merchandise. Moderate now accounts for about 60 percent of the chain’s mix, and it will rise to 66 percent during the first half.
Better merchandise will shrink from 40 to 36 percent of the mix.
“The moderate business has always been more profitable than better,” said Mershad. “We plan to grow moderate at Elder-Beerman. The next phase of retailing will demand consistent value. Our women’s moderate business is growing by high single digits. The category has had the best sales trends over the last four months than we’ve had in the last three years. We’re planning on high-single-digit gains for the first half, as well.”
Elder-Beerman opened five new stores this year and will open five more next year.
The chain is spotlighting customer service centers in all its stores and new point-of-sale systems that slash transaction times by 66 percent.
At the Proffitt’s/McRae’s divisions of Saks Inc., growing the moderate business means “having the right product at the right place at the right time,” said Toni Browning, president of Proffitt’s/McRae’s.
“Our primary challenges are to assure a value-price equation that meets our customers’ expectations, assure newness for our customers and assure that our key items are properly positioned,” Browning said.
She said the mid-tier chains are using private brands and a better selection of key items to entice customers into stores and create sales-floor excitement.
Browning believes the highly promotional overall retail environment that’s defining the holiday scene can be somewhat confusing to consumers.
“We will certainly remain competitive, but our primary focus is to have great offerings that provide our customers with quality, value and newness,” she said.
For early spring, which is already checking in certain geographic regions, the chains’ moderate trend focus will highlight softly embellished, more feminine styles, including career selections.
At Bealls Department Stores, the 70-store moderate chain based in Bradenton, Fla., is staying true to its moderate roots and expanding its lifestyle offerings as its customer base becomes more diverse, said Conrad Szymanski, president.
“The moderate market is built on volume and on making and selling a lot of something,” Szymanski said. “So our buyers have expanded the number of departments in which we merchandise casual sportswear and are trying to focus on certain lifestyles.”
Bestsellers for early spring, which hit stores in early November because of the year-round warm weather, include lightweight and comfortable items with a subtle fashion edge, including silk bottoms, shorts cut from luxury fabrics and retro junior styles.
Bealls is slowly expanding its outreach to the junior market with much success.
Its stores merchandise junior lines near the main entrance by using vivid visual displays and by highlighting hot fashion trends appropriate for the laid-back Florida lifestyle. But it is moderate misses’ sportswear that remains the star at Bealls, according to Szymanski.
“Moderate sportswear was one of the brightest spots at Bealls for holiday and is trending ahead on a comp-store basis,” he said. “We’re planning mid-single-digit gains for the first half. We feel pretty positive about the category for spring.”
Moderate specialty retailers are building their businesses by keeping styles fresh and inventories tight and playing up value through marketing and adverstising. The ultimate goal is to lure shoppers away from big department stores or mass merchants.
Kaplan’s, a 110-year-old moderate business with two stores in Alexandria, La., is experiencing single-digit sales gains this holiday season, and is expecting about the same for early spring, according to A. Brent Kaplan, owner.
“One of our strategies for spring is to improve inventory production,” Kaplan said. “We plan to do this by having better margins and with promotions. We still need to promote to generate business.”
Kaplan has recently installed a new computer system that he hopes will help increase business in a variety of ways. The system includes a personalized marketing feature that helps keep track of customers’ purchases.