How US retailers are Trumped by their customers
Donald Trump’s supporters represent a demographic less capable of supporting retail sales than was previously the case
Economic inequality was a major contributor to the recent lacklustre US holiday retail sales, suggests Robert Antoshak, managing director at Olah Inc. He also believes the apparent rise of Donald Trump in the American presidential race goes hand-in-hand with the decline of America's working class – and with it, the ability of a large segment of the public to purchase clothing.
Another holiday shopping season has come and gone. Many stores in the United States reported better sales, yet many more continue to struggle in a rapidly changing economy. Young consumers exerted greater influence on the holiday shopping season while online sales continued to expand at the expense of many brick and mortar stores. Moreover, tech gadgets continued to attract dollars that would have otherwise purchased clothing.
Many of these trends are not new and have gradually gained prominence as changing global economics continue to grind away at the traditional retail business. But a challenge for many sourcing executives is how to determine the real impact of such change. Is it only measured in aggregate retail sales or is there more to the story?
Some segments of the apparel supply chain appear to have recovered from the doldrums of the global recession in 2008, while other continue to struggle. All the while, the retail apparel business continued to function as two distinct entities: one, high-end, the other, low-end. Indeed, this dichotomy not only characterises today's retail apparel market, but it more directly reflects the contemporary social environment.
Of course, there have always been high- and low-ends of the market. But in today's business, this split has taken on new dimensions. In the past, retail always assumed the consumer would often choose between expensive and cheap based on factors such as emotional desire, functionality, fit and finish. Price always played a role, but increasingly for many consumers, the price of a garment is more important than ever and outweighs simple fashion. And many retailers have only been too happy to meet such demand.
At the high-end, though, other forces are at work: environmentalism, local production, and "slow" fashion have gained primacy. For many consumers, it's not enough to just purchase a garment at a good price; they want to know the story behind that garment. Where and how was it made?
Many of my friends from Europe and Asia have voiced concern over the apparent rise of Donald Trump in the American presidential race and what seems to be a coarsening of American political discourse. Trump is shrill, a boor, and an opportunist, but he does act as a populist lightning rod for the disaffected in America. He reflects the frustrations of a significant portion of the American populace: namely, blue-collar workers who have been left behind by the pervasive march of globalisation. Indeed, there was a time when this segment of American society could readily find employment in manufacturing and other low skilled jobs. Today it's different. Those jobs don't exist anymore. The collapse of the American textile industry is a poignant example.
Trump, in short, is a manifestation, a populist born of frustration and failed aspirations. An oxymoron, he's a billionaire, working-class mouthpiece. The rise of Trump goes hand in hand with the decline of America's working class and with it the ability of a large segment of the American consumer market to continue to purchase apparel and textile products like it had in the past. In one sense, Trump is a bellwether of trends in the United States – and that's without taking his politics into consideration!
Economic inequality has been a cost of globalisation. Despite all of the good done because of globalisation, it has forced significant changes in the traditional consuming societies, while also painting an incomplete portrait of developing countries. Another cost has been the rise of Trump and what he represents of failed expectations. It's far from clear that the buying power of the upper economic strata can more than offset the struggles of everyone else. Hence, retail will need to adapt and in so doing change its requirements.
About the author: Robert Antoshak is managing director at Olah Inc, a New York-based global textile and apparel development and marketing firm that supplies US companies with denim, corduroy and piece-dyed fabrics. It is also producer of the Kingpins denim shows.
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