Newswise — BLOOMINGTON, Ind. -- This holiday shopping season figures to be a strong one for the nation’s fashion apparel retailers, according to new results of the FINdex survey released by Indiana University's Kelley School of Business.
“Some retailers reported some headwinds during the third quarter, including Macy’s and Nordstrom, but our findings suggest that they’ll see a bit of an improvement in this quarter,” said John Talbott, associate director of the Kelley School’s Center for Education and Research in Retailing.
According to the FINdex -- the Fashion Innovation Index -- the survey audience, mostly college-age women, said they intend to spend more this holiday season than a year ago and are enthusiastic about what they're seeing in stores.
The index is based on survey data obtained from a sample of the most engaged "style gurus" of the more than 800 who are part of CollegeFashionista.com. Style gurus are a curated group of college-age students who possess a keen eye for new style trends in all realms of the fashion industry.
Produced in collaboration with Kalypso and CollegeFashionista.com, the index measures consumer sentiment toward fashion trends in the apparel, footwear and accessory industry. Its purpose is to help retailers better track and understand consumer sentiment toward the innovativeness of merchandise and more quickly identify and adopt emerging fashion trends.
“Our FINdex is a composite measure of perceived spending capability along with a perception of the product they’re seeing in the stores, and in both cases, for this particular survey, we saw an uptick in spending capability relative to last year and an uptick in overall product enthusiasm,” Talbott said.
What they’ll be buying
Most of their holiday spending will be on apparel, but survey results indicate it also will be a strong year for footwear. Boots or booties were the single most important “must have” item for those in the survey -- but not Ugg boots, frequently cited as a brand respondents viewed as overexposed. Among the popular footwear brands mentioned were Sam Edelman and Stuart Weitzman.
“This group tends to sniff out brands at the early stages of overexposure,” Talbott said. “With this population, things go stale quickly, and you have to keep products fresh. If the product is overexposed, then these women tend to run away from it pretty quickly. We also think that they tend to lead the rest of the population.”
They also seemed to be sensitive to overexposure of any brand. Only a year ago, the survey indicated that Brandy Melville was an up-and-coming brand. Though still generally a well-liked brand, the percentage of those who said they are tired of Brandy Melville has increased, including one respondent who said, “I still love her styles but everyone wears them and they are no longer unique.”
H&M and Zara continue to be favorites of this population because of their ability to consistently deliver “new and fresh product into their stores.” Urban Outfitters and Free People were frequently mentioned as well-liked and likely benefit from their many physical locations in college towns.
Accessories are also important, but technology and home furnishings were much less desirable to this audience.
“I’m not sure that the right technology wearable has come through for this group,” Talbott said. “There may be some intermediate ground of an appropriate level of connectivity, but not at the expense of beauty and aesthetic. If you look at successful watch companies such as Swatch or Fossil, they have thousands of different styles. Imagine if all those styles had some sort of wearable technology capability.”Looking for product innovation
More than 80 percent of respondents said the products they were seeing in stores were more innovative than a year ago.
“Merchandise innovation may end up being every retailer’s best friend this holiday season,” said Steve Riordan, a Kalypso partner. “The main driver behind this season’s strong FINdex score is the perceived amount of innovation appearing in color, prints and especially fabrications.
“Mainstream retailers have been learning how to develop real merchandise innovation by adapting leading practices from top companies in the athletic/performance apparel and footwear categories,” Riordan added.
“It is critical for retailers to develop highly effective product development capabilities for both merchandise and the underlying materials to create the consistent flow of innovative, fresh product that the women we surveyed -- and millions more like them -- demand.”
Value placed on physical stores and online retail
Much has been written about competition between traditional brick-and-mortar stores and online retailers. The FINdex survey supports what others are saying: Customers today like using both, especially when traditional retailers effectively use the Internet.
“Clearly these women embrace the evolving nature of retail today and are channel agnostic in terms of their choice of shopping destinations,” Talbott said. “The type of product or the particular purpose of the shopping trip likely drives the selection of store versus web.
“We need to quit saying ‘e-commerce’; it’s ‘commerce,’” he added. “Whether they’re buying online from that brand or they’re going to the store that brand owns, the beginning of their journey toward that purchase often starts with an interaction through a browser.”
Traditional retailers are embracing this reality and, in fact, physical brick-and-mortar stores remained the most important shopping destination of the young women surveyed. There, they expect to see well-organized products, beautiful displays and an overall fresh vibe. This also indicates that price discounts won’t be what these young women are looking for. They may appreciate price value, but they aren’t driven by sales.
Interestingly, a good mobile app and employees who “fit” the brand were not important drivers of brand engagement.
After the Internet, the second biggest source of information about fashion was friends, likely mediated through a social media platform such as Instagram, Twitter or Snapchat. But traditional fashion magazines come in third and remain relevant -- perhaps further indication that this holiday shopping season is about the blending of digital and physical mechanisms to engage customers and a drive sales.
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