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Despite nearly ten years since the market lows of the Great Recession, Americans are still looking for deals when they shop. With a changing landscape, there may never be a return to “normal,” for American retailers. Lauren Thomas reports at CNBC:
“Fundamentally, as prices have come down in retail, that has squeezed out many retailers,” Meyer said. “My sense is that is still true today.” Shoppers still have a higher sense of price value, he said, and apparel is less of a focus when shoppers think about their budgets.
That’s really weighed on apparel companies. Shares of Ralph Lauren have underperformed the industry average by nearly 12 percent during the past five years, according to Factset. Shares of Gap have underperformed by 0.6 percent.
It is unlikely that the next generation will forget the lessons learned by their elders and resort back to prolific spending on products, said Robin Lewis, consultant and author of the Robin Report.
“One of the reasons this country isn’t going to bounce back to what we used to have — we have an aging population that is not being replaced by this younger generation,” said Lewis. “They will be in numbers but not making as much money, not spending as much.”
That permanent impact, said industry experts, means there may be new reckoning to face as the advent of online shopping allowed for a new cohort of retailers to multiply in the years that have followed the recession. These new retail companies launched their businesses online and built their brands unencumbered by costly stores and past debts. Among them, Bonobos, Warby Parker and Allbirds, used the internet to grow their reach. Now established, they are chartering new territory by launching stores slowly and methodically.
“I’m not sure that there is going to be a ‘normal’ again in retail,” Warby Parker co-founder Neil Blumenthal told CNBC earlier this year. “Companies like Warby are lowering prices, making things easier and more fun to shop. Those are the companies that are going to survive.”
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