The National Retail Federation’s (NRF) 2009 Back to School Consumer Intentions and Actions Survey conducted by BIGresearch reports that, as a result of the current economy, 56.2 percent of back-to-school shoppers will hunt for sales more often, while 49.6 percent will spend less overall, and 40 percent plan to increase their use of coupons.

At the same time, consumer expectations for how they can interact with brands are changing. A global study conducted by Synovate in conjunction with Microsoft found that consumers regularly engage with brands online. Of the respondents, nearly one-third of 18 to 24 year old consumers talk about brands online and one in five has added branded content to a social media site.

A number of Tier 1 and Tier 2 retailers have responded to these challenges by developing a multi-faceted social media strategy, including working with CheapTweet to extend the reach of their back-to-school deals to CheapTweet’s community of shoppers on Twitter. As a recent AdWeek article states, “Marketers say the stepped-up social-media efforts reflect the fact that the medium is now key to reaching teens, who influence their parents’ purchases.” 1 Leading brands that listen and contribute to these online conversations can leverage valuable opportunities to engage with their customers.

“On Twitter, you live and die by relevance,” said Hayes Davis, Founder and CEO with Appozite, CheapTweet’s parent company. “Brands that are transparent and strategic about how they use social media to communicate with their customers will be the only brands that thrive on Twitter. CheapTweet aligns perfectly with this strategy, since our goal is to help our community save money by engaging with their favorite brands, unlike traditional advertising. Online sellers are recognizing the value of reaching their customers through Twitter and the CheapTweet community, and we look forward to working with many more companies to optimize their Twitter presence.”

For more information, visit: http://www.ismretail.com/index.php?option=com_content&task=view&id=607&Itemid=122

Sixty-four percent of respondents to an online survey that Deloitte conducted earlier this month said they plan to spend less money than last year on back-to-school items. Forty-three percent said they will cut back spending by more than $100, and 81 percent said they specifically plan to pare back clothes-buying.

The results show a slight bit more optimism than last year, when 71 percent of respondents said they would scale back purchases. But considering that consumers are anticipating closing their wallets even more after an already down year, some stores could be hit hard, said Dave Rooney, who leads Deloitte’s consumer business practice in Colorado.

“Folks are going to focus on necessities, necessities sort of being in and niceties being out,” Rooney said. “Discounters and the dollar stores are going to do well. And higher-end retailers and clothing stores will bear the brunt of this (spending decrease).”

Back-to-school sales typically make up about 15 percent of retailers’ total sales, making it the second most important season of every year behind the Christmas season.

Though it is a less discretionary season than in December — school children have to have a certain amount of items to begin the year — many retailers look at it as an indicator of what is to come, Rooney explained.

According to the 1,044 U.S. consumers polled for the survey, 70 percent said that economic conditions will impact their buying behavior. The biggest ways in which that will play out include people looking to buy more items on sale (74 percent), buying only what their family needs (65 percent), buying more lower-priced items (55 percent) and using more store coupons (55 percent).

Almost half of the respondents — 45 percent — also said they plan to shop at less expensive stores than they usually do. Discount stores like Wal-Mart and Target are likely to be the beneficiaries of such consumer down-scaling, Rooney said.

Clothing was by far the item that respondents felt likely to cut back on the most, followed by shoes (49 percent) and supplies (32 percent). However, 41 percent of customers, about the same percentage as last year, said they still will seek out “green” products, which are typically more expensive than other products.

While shoppers last year were cautious in their spending mostly because of the escalating prices of gas and food at the time, this year’s jitters revolve around the unemployment rate, which has hit 7.6 percent in Colorado. Twenty-two percent of survey respondents indicated that someone in their household had lost a job, while an additional 17 percent expressed fears of job loss.

Also, 32 percent of those surveyed said they are saving more money, a boost of 10 percentage points from last year and a figure that Rooney used to argue that the changes in back-to-school buying habits may be permanent rather than temporary.

“To the extent that people have extra money nowadays, they’re saving that money, where in the past they used to tend to spend it,” he said.

The Deloitte survey came six days after the National Retail Federation released a survey predicting that back-to-school spending will decline 7.7 percent this year. The average family is likely to spend $548.72 on school merchandise, compared to $594.24 in 2008, that survey stated.

“The economy has clearly changed the spending habits of American families, which will likely create a difficult back-to-school season for retailers,” NRF President and CEO Tracy Mullin said in a news release. “As people focus primarily on price, strong promotions and deep discounts will ultimately win over back-to-school shoppers this year.”

For further information, visit: http://www.bizjournals.com/denver/stories/2009/07/20/daily14.html

Plano-based J.C. Penney thinks so, as it’s gearing up for the July 31 official opening of its first Manhattan store, just a block from Macy’s towering flagship in Herald Square.

The new store is key to Penney’s campaign to boost sales by shedding its reputation for dowdiness. That effort in recent years has included adding exclusive affordable collections from designer Nicole Miller, home furnishings from home maven Chris Madden and trendy in-store Sephora cosmetics shops.

Penney expects the store to be its largest sales generator. It believes even New York fashionistas are looking for affordable options as the recession maintains its grip. But Wall Street is taking note of the changing Manhattan retail landscape and will watch who shops at Penney and whether they are defecting from rivals like Macy’s. That Herald Square fixture since 1902 was made world famous by the annual Thanksgiving Day parade and the Christmas movie “Miracle on 34th Street.”

“Penney’s has been around for a long time, but it hasn’t had the visibility of its competitors,” said Faith Hope Consolo, chairman of real estate firm Prudential Douglas Elliman’s retail leasing sales division.

Consolo said higher-priced Macy’s and even the neighborhood’s Victoria’s Secret store, have “reason to be concerned” because Penney is likely to draw a full cross-section of the 250,000 shoppers who store officials say visit the area daily.

Penney, which usually sticks to staid radio and print ads to promote store openings, seems to be having fun ruffling feathers in the historic retail Mecca.

“We hear Herald Square needed a good department store,” one bus shelter proclaims. And another: “The real miracle is now on 33rd Street.”

But Macy’s spokesman Jim Sluzewski declined to comment, pointing out only that the 2.2 million-square-foot flagship is the world’s largest store and one of New York’s biggest tourist attractions. That compares with the much smaller Penney store, with about 150,000 square feet.

Sales at Plano, Texas-based Penney, which has 1,000 stores across the U.S., have stalled and profits dropped since the recession began in late 2007 and shoppers started cutting back on discretionary items like fashion. But competitors like Macy’s have suffered more, slashing its work force and closing stores. Penney’s has only slowed store expansion and cut inventory.

The average 7.8 percent sales decline since February at Penney stores open at least a year compares with 7 percent at Kohl’s Corp. and 9 percent at Macy’s.

Competitively priced trendy merchandise has been Penney’s strong suit in the recession, said Chief Marketing Officer Mike Boylson, while mid-priced basics and big-ticket items like furniture and jewelry have been weak.

Penney already operates stores in the Bronx, Staten Island and Queens, but Boylson believes the Manhattan store “is going to have a halo effect on the entire brand.”

When Penney’s opened a temporary store in Times Square in spring 2006, sales immediately rose in its borough locations and Jersey City and stayed higher until the recession began, Boylson said.

Given the recession - and how expensive it is to live in Manhattan - Boylson believes customers will appreciate Penney’s lower prices, like dresses that top at about $90.

For further information, visit: http://www.klewtv.com/news/business/51223737.html

But now, by all accounts, those days are over — maybe forever. And high-end brands have to figure out where they fit into the new order of consumerism.

One thing’s for sure: simply slashing prices isn’t an option. “Putting a sale sign on the same old product leaves the customer feeling compromised,” Paul Raffin, CEO of Frette — the Italian linen maker famous for $1,500 sheets — told me in an interview. “Playing it safe is a sure path to failure.”

So what are they doing instead? Well, instead of summering contentedly in St. Tropez this year, luxury executives are hunkered down in their offices, studying, for the first time, strategies better known to mass retail brands. Such as:

Launch an economy line

A diffusion line makes sense for every luxury retailer right now — after all, why should a department store that teams up with a designer reap all the profits from budget-friendly fashion?

Still, there are some companies — most of them with long luxury lineages — for which a lower-priced collection seemed inconceivable, fatal to their cachet. Frette, which has been charging top dollar for their fine bedding since 1860, is one such company.

But this fall, the linen maker will introduce U.S. customers to Edmond Frette, a line of sheets that will start at $500 per set (current prices start at $1500) and will allow customers to buy pieces separately, rather than as a complete set, for the first time. Coach, too, is defying their long history by launching Poppy, a lower-priced line of bright metallic and graphic-emblazoned accessories that start at $48.

Pop up wherever you can

Realtors have been trying for years to coax Hermes to come to the Hamptons — the summer getaway for New York’s well-heeled set. For years, the company resisted.

But with the recession pummeling seaside real estate prices, one broker came up with a new proposal that was music to the company’s ears: a summer rental.

“The answer, in these times, was ‘why not?’” Hermes CEO Bob Chavez told me. “We’ve always shipped an extraordinary amount of product to our retailers in the Hamptons during those months - we have a built-in business there.”

Now through September 20, East Hampton shoppers will be able to buy Hermes items like a $295 scarf or a $530 beach towel at what’s called a pop-up shop — a temporary store format that bigger retailers like Target and Gap have used to create buzz. The East Hampton pop-up will be the first in Hermes’s 160-year history.

Tagging along on the company’s summer vacation is couture brand Temperley London. The company, known for its floaty dresses, will operate a store through December in East Hampton. So will girly designer Cynthia Rowley, who is out on her own on Main Street this year after testing the waters with a section in the Montauk boutique Haven last year.

Stage an Asian invasion

It’s hard to fathom a luxury jeweler opening 30 new stores across the U.S. this year-which is why Cartier is planning to do it in Asia, where it already has 28 boutiques.

Faced with waning sales among their Western clientele, Cartier is trying to make up losses by driving hard and fast into the continent where an appetite for luxury still lingers. “In the United States, sales among our aspirational clients have slowed down,” Cartier CEO Bernard Fornas explained to me in an interview. “But sales in China are up by 50 to 100 percent, year after year. We see Asia as an opportunity to break through the crisis.”

They won’t be alone in the region. Tory Burch recently inked distribution deals in Japan and South Korea, and Jimmy Choo will have opened three stores in Hong Kong by the end of the year. And upscale California boutique Kitson, after enjoying $1.5 million in sales from their first store in Japan, which opened in March, has announced that they’ll open two more in the coming months — and they’re also scouting locations in China, South Korea and Singapore.

“Each day in Asia sees the emergence of a new millionaire,” says Fornas. “Even if this is only 0.1 percent of the population, it’s still an overwhelming reservoir of potential customers.”

Of course, not every high-end designer is taking pages from the mass retail playbook. Some maintain that the safest thing to do is to continue to push aspirational styles that come with four-digit price tags.

Consider Derek Lam, a fashion-set darling. Not only is the company not pulling back–they’re launching their biggest ad campaign to date, with print buys in the August editions of Vogue, Elle and Harper’s Bazaar.

But that doesn’t mean they’re not realistic about their customers’ current finances. “It’s not that we don’t respect the values of the recession,” says Jan Schlottman, CEO of Derek Lam. “We are as scared as everybody else. But we want to say: we know you don’t feel like shopping right now, but we’re here, and we’re going to be here in five years.”

For further information, visit: http://www.walletpop.com/blog/2009/07/10/fancy-brands-look-to-mass-retail-for-lessons-in-survival/

Sales at stores open at least a year, or same-store sales, fell 4.9 percent in June according to the Thomson Reuters index. But a handful of companies posted stronger sales, including TJX Cos Inc, which runs discount-oriented chains such as T.J. Maxx.

The Standard & Poor’s retail index is already up 11 percent this year and rose less than 1 percent on Thursday, while the S&P 500 has fallen nearly 3 percent in 2009.

Have investors made all of the money they can betting on retail’s rebound following a rough 2008? Is there more room for growth?

KEEP BUYING

“I would say look at value, look at consumables and those are really the two major themes,” said Sarah Henry, a retail analyst at MFC Global Investment Management. “I think there’s some more opportunity there left this year.”

“There are clear market share beneficiaries, the big one this morning, by far, was T.J. Maxx, you can see how powerful it is. And of course yesterday we saw Family Dollar really performing very well in this environment,” Henry said.

Retailers with better balance sheets and cash flow have been able to squeeze some concessions on costs from vendors, a move mentioned by Family Dollar and alluded to by Target Corp, she said.

“There’s a meaningful earnings driver here in companies that are more flexible with their cash flow,” she said, adding that others such as TJX and Wal-Mart Stores Inc could see similar benefits.

NO REAL DEALS FOR NOW

“Is this the best time to buy retail stock? Probably not. The consumer remains very weak. There are still limited signals there will be a return to growth,” said Eric Beder, an analyst with Brean Murray Carret, noting that investors need to judge on a company-by-company basis.

Short-term traders have to be particularly careful, he said.

“If you’re trying to trade these names you’ve got to have a really tight trigger finger. If you’re looking for longer plays there are a lot of strong companies trading near their low … they have potential to drive upside when the consumer comes back,” Beder said.

Short-term investors need to look at sectors that provide good value, Beder said, citing Aeropostale Inc and Family Dollar as two stocks that benefit from consumers’ focus on affordable goods.

Longer-term investors need to look at the concept and quality of management, he said, citing Urban Outfitters Inc, Warnaco, True Religion and Guess? Inc as companies with “significant potential growth” once the downturn is over and “lots of cash.”

HOLD ON

“People always say if you are looking to buy stocks, if you are an investor in the industry, sometimes the best time to buy is in the worst of times. (You) say, ‘how low can it go?’ Problem is, it could stay still for a long time,” said Al Ferrara, director of the retail practice at BDO Seidman.

“I would be neutral on the retail sector. I wouldn’t be an aggressive buyer. Whatever you have, hold. I wouldn’t be putting more money into the sector now. I don’t think the worst is over for it.”

For further information, visit: http://www.reuters.com/article/pressReleasesMolt/idUSTRE56861K20090709?pageNumber=2&virtualBrandChannel=0