In Retail, Middle Can't Compete With High OR Low


natalie-portman-in-hm-dress

The latest trend in retail could be called “shopper extremism” — consumers are shopping for high-priced luxury goods and lower-end deals for everyday items, to the exclusion of the middle, or mid-priced, tier.  In other words, Gucci is doing well, TJ Maxx is fine, but Ann Taylor is struggling, as Ed Jay, the head of American Express Business Insights, told Consumerist.  All of which would certainly explain the news that the Gap is shuttering 200 of its 900 stores worldwide.

Natalie Portman is wearing a $49.95 dress from H&M.

Of course, the recession is partly cited for the shift away from the middle — either consumers want unique, high-quality goods that will last, or they want the most inexpensive deals available.  Both points make perfect sense.

A third reason to consider, however, might be the mass proliferation of flash sale sites like Gilt Groupe (which is also doing just fine).  Besides moving in on the market, these sites may have changed consumer expectations, and made people used to shopping…differently.   Gilt and its ilk have certainly made it easier to purchase high-end goods, while also training shoppers not to pay full price — for anything.  And while many of Gilt’s prices still make H&M’s look like a bargain, they do make the middle tier look less appealing.  After all, why would someone buy an $80 coat from Express when they could spend a similar amount for Michael Kors at a flash sale?


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