The Retail Middle Shrinks
By George Anderson
The middle of the road was the wrong place to be if you were a retailer in November.
Based on the latest reports, retailers at the luxury end of the spectrum (Saks, Nordstrom) and discounters (Wal-Mart, Target) turned in strong year-over-year sales numbers while
those looking to fill the middle ground (Sears, Kohl’s, J.C. Penney) were performing below expectations.
Total retail sales for the two days following Thanksgiving was $12.4 billion according to ShopperTrak, up 5.4 percent over last year.
Moderator’s Comment: Will consumers’ desires for discounts and affordable luxuries mean an end to retailers looking to take up the middle ground between
Wal-Mart and Nordstrom?
Even when purchasing on the discount side, shoppers are often still acting as the new luxury consumer defined by Michael Silverstein and Neil Fiske in their
book, Trading Up: The New American Luxury.
Neil Fiske, chief executive of Bath & Body Works recently took part in a Forbes CEO Network chat and discussed the new luxury consumer.
“Old luxury was about exclusivity and status,” he said. “If too many people had it, by definition it could not be luxury any more. New luxury is more democratic
and more interesting. If I go to a spa or trade up in wine, it doesn’t diminish anyone else’s chance of doing the same. It’s also based on a more complex set of emotional spaces.
Finally, it is within reach of a broad base of middle-market Americans. Generally premium but attainable price points. Examples: spas, 3.5 series BMWs, wine, travel, American
Girl dolls, Callaway golf clubs, Victoria’s Secret premium lingerie, fast casual food like Panera … it’s a very long list.” [George
Anderson – Moderator]