UNDERSTANDING THE U.S. MARKET   Presentation to Peruvian Exporters             June 12, 2012       Presented by Ilse Metch...
Outline• U.S. Retail Marketing Channels• Distribution & Shopping Patterns• Requirements for Successful Brand Entry• Peru’s...
U.S. Retail Distribution & Shopping Patterns
U.S. DISTRIBUTION METHODS          FOR APPARELDepartment Stores – inventory includes ‘hard      Macy’s JCPenney, Searsgood...
SPECIALTY            WEB        VERTICAL   STORES                          STORECATALOG                   Mastering the   ...
Total Apparel Sales by Retail Channel                                                 Market Share of Total Channels      ...
Total Apparel Sales                      $32.3 billion                                             $107.61 billion        ...
US: Retailers’ May 2009                                   Sales                                            Same-Store     ...
US: Retailers’ May 2010                                   Sales                                            Same-Store     ...
US: Retailers’ May 2011                                   Sales                                            Same-Store     ...
US: Retailers’ May 2012                                 Sales    Same-Store Sales                   Retailer              ...
E-Commerce Share of Specialty Apparel Sales                                           20%                                 ...
Required for Successful Brand Entry
Brand Entry ReviewTo develop ‘brands’ for entry into the U.S. market, an    international fashion producer should:•   Esta...
U.S. RETAIL CHANNELSTo Get the Product to the Consumer...• Limited Marketing Channel (Branded & Private Label)   Manufactu...
Fashion Marketing Options For       BRAND IDENTITY• National ad campaign to establish an image.• Regional sales campaign w...
Innovation & Good Design          Is Not Enough!• Sizing - not standardized. Some retailers have clear  specifications.• L...
Financial Realities…● ‘Style’, Marketing, and Delivery will  determine success. There is intense  global competition for d...
Peru’s Entry into U.S. Market              &   Global Competitiveness
Peru’s Exports to the U.S.                  Apparel & Textiles                            YTDTextiles                    2...
U.S. Exports to Peru                  Apparel &Textiles                            YTDTextiles                    2012    ...
Peru’s Global Competitiveness      “Peru continues to move upward in the ratings”• Top Tier: “Business Sophistication”    ...
Going Forward...
Global Realities for Apparel• U.S. Trends are crossing borders, creating  a ‘transnational’ media culture – due to  media ...
Retailing in 2013• Clients (Retailers and Manufacturers) will  rely on technology and computers for  purchases, but still ...
The Landscape for Major           U.S. Retailers in 2014                                            Present   FutureRetail...
Los Angeles:Where Trends Happen
Los Angeles is #1 or #2 in Major‘Design-Based’ Industries (By Employment)Apparel & Textiles                            1) ...
Southern California Apparel:        The Global Content ProviderThe West Coast is much less conservative when viewing‘new’ ...
Fashion Industry Value to  the L.A. Region’s Economy                                             2010             1997  Ap...
Democracy of DesignElle Magazine - Brazil                   Marie Claire - US                         Vogue - China
The California Fashion Association (CFA) is the Business-to-business forum for Californias        Apparel and Textile Indu...
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Understanding the US Fashion Market

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Presented by Ilse Metchek, President of the California Fashion Association.

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  • CFA
  • CFA
  • Understanding the US Fashion Market

    1. 1. UNDERSTANDING THE U.S. MARKET Presentation to Peruvian Exporters June 12, 2012 Presented by Ilse Metchek, President
    2. 2. Outline• U.S. Retail Marketing Channels• Distribution & Shopping Patterns• Requirements for Successful Brand Entry• Peru’s Global Competitiveness• Going Forward• Los Angeles: Where Trends Happen
    3. 3. U.S. Retail Distribution & Shopping Patterns
    4. 4. U.S. DISTRIBUTION METHODS FOR APPARELDepartment Stores – inventory includes ‘hard Macy’s JCPenney, Searsgoods’, i.e., furniture, cookware, etc…………………Specialty Chains – just apparel and accessories Saks, Nordstroms, Neimans, BarneysMass Merchants……………………………………… Walmart, TargetDiscount Chains...…………………………………… T.J. Maxx, Ross, SteinMart,Catalogs – Direct Mail….……………………………. J. Crew, Boston ProperIndependent Specialty Stores ….………………….. Fred Segal, Ron Herman, Kitson, BergdorfsDesign-to-Consumer ………………………………… Gap, Forever 21Online – Internet ……………………………………… Gilt Groupe, Bluefly, AmazonHome Shopping Networks…………..……………… QVC, HSNDistributors / Jobbers……………..………………… Independent Outlets & Distribution Companies
    5. 5. SPECIALTY WEB VERTICAL STORES STORECATALOG Mastering the TV Multi-Channel World KIOSK DEPARTMENT STORE POP-UP STORE MOBILE
    6. 6. Total Apparel Sales by Retail Channel Market Share of Total Channels May 2010 – April 2011 8.5% 1.0% 12.4%Source: The NPD Group, Inc. based on projections from consumer panelist data via Women’s Wear Daily, July 2011
    7. 7. Total Apparel Sales $32.3 billion $107.61 billion Women $52.82 billion Men Children Total Sales: $192.73 billionSource: The NPD Group, April 2011
    8. 8. US: Retailers’ May 2009 Sales Same-Store Retailer Sales (+/-)% (+/-)% Macy’s -9.4% -9.1% Nordstrom -8.8% -13.1% Kohl’s 4.1% -0.4% Saks -25.9% -26.6% Limited Brands -6.4% -7.0%Source: RetailSails, June 2009
    9. 9. US: Retailers’ May 2010 Sales Same-Store Retailer Sales (+/-)% (+/-)% Macy’s 2.6% 1.4% Nordstrom 7.8% 3.7% Kohl’s 6.6% 3.5% Saks 6.9% 5.8% Limited Brands 6.2% 5.0%Source: RetailSails, June 2010
    10. 10. US: Retailers’ May 2011 Sales Same-Store Retailer Sales (+/-)% (+/-)% Macy’s 8.50% 7.40% Nordstrom 12.90% 7.40% Kohl’s 2.50% 0.80% Saks 17.30% 20.20% Limited Brands 6.00% 9.00%Source: RetailSails, June 2011
    11. 11. US: Retailers’ May 2012 Sales Same-Store Sales Retailer (+/-)% (+/-)% Macy’s 4.0% 4.2% Nordstrom 9.3% 5.3% Kohl’s -2.6% -4.2% Saks 3.7% 4.0% Limited Brands -6.3% 6.0%Source: RetailSails, June 2012
    12. 12. E-Commerce Share of Specialty Apparel Sales 20% 18.1% 16.4% 10.1%Source: NPD January 2012
    13. 13. Required for Successful Brand Entry
    14. 14. Brand Entry ReviewTo develop ‘brands’ for entry into the U.S. market, an international fashion producer should:• Establish a U.S. corporation.• Quote prices as ‘landed, duty-paid in U.S.’• Customer Service office in the U.S.
    15. 15. U.S. RETAIL CHANNELSTo Get the Product to the Consumer...• Limited Marketing Channel (Branded & Private Label) Manufacturer ____ to Retailer ____ to Consumer• Extended Marketing Channel Manufacturer ____ to Wholesaler ____ to Retailer ____ to Consumer• Direct Marketing Channel (Vertical Retailing) Manufacturer ____ to ____ Consumer
    16. 16. Fashion Marketing Options For BRAND IDENTITY• National ad campaign to establish an image.• Regional sales campaign with in-store promotions.• Product Placement – ‘celebrity’ sightings are the key for some trend setting categories - requiring appropriate ‘public relations’ specialists.• SOCIAL MEDIA !!!!
    17. 17. Innovation & Good Design Is Not Enough!• Sizing - not standardized. Some retailers have clear specifications.• Labeling Requirements - Chemical testing is required for all merchandise by some states.• Shipping costs should be factored in the wholesale selling price, not ‘FOB Callao’. (Don Nunnari)• US Customs - Current requirements are being fully enforced. (Tom Gould)• Intellectual Property - Confirmation of valid trademarks must be established. (Crystal Zarpas)
    18. 18. Financial Realities…● ‘Style’, Marketing, and Delivery will determine success. There is intense global competition for decisions based on price without profit!● Be aware of regional preferences for global brand development and marketing strategies. One strategy does NOT fit all markets.
    19. 19. Peru’s Entry into U.S. Market & Global Competitiveness
    20. 20. Peru’s Exports to the U.S. Apparel & Textiles YTDTextiles 2012 2011 2010 2009 All US Ports 6,064,000 22,916,000 21,840,000 16,686,000 L.A. District Ports 103,000 500,900 892,600 806,700Apparel All US Ports 161,550,000 711,900,000 661,650,000 598,960,000 L.A. District Ports 12,640,000 37,193,000 44,154,000 52,656,000Source: LAEDC 06/07/2012
    21. 21. U.S. Exports to Peru Apparel &Textiles YTDTextiles 2012 2011 2010 2009 All Peru Ports 6,167,900 23,417,700 22,733,000 17,492,000Apparel All Peru Ports 174,199,800 749,095,000 705,808,000 651,616,000 Source: LAEDC 06/07/2012
    22. 22. Peru’s Global Competitiveness “Peru continues to move upward in the ratings”• Top Tier: “Business Sophistication” o Economic stability – control of inflation o Friendly environment for entrepreneurship o Less time needed to begin a business o Efficiency gains in labor and financial markets• Bottom Tier: “Global Market Efficiency” o Low level of innovation o Insufficient transport infrastructure network o Higher quality of educated employees required o Costs of organized crime and violence to BusinessSource: “Global Competitive Index” of 142 Countries
    23. 23. Going Forward...
    24. 24. Global Realities for Apparel• U.S. Trends are crossing borders, creating a ‘transnational’ media culture – due to media and internet exposure.• Hollywood ‘star power’ creates runway fashion and consumer interest....not Paris!• The “democracy of consumption” – one does not have to be rich to be fashionable anymore.
    25. 25. Retailing in 2013• Clients (Retailers and Manufacturers) will rely on technology and computers for purchases, but still need personal interaction and service!• Brand Owners develop their own ‘specialty stores’ as a hedge against larger retailers and the internet.
    26. 26. The Landscape for Major U.S. Retailers in 2014 Present FutureRetailers design and source 30% 45%for themselvesLow recognition brands 30% 15%Major brand ‘giants’, ie: 40% 40%Jockey, Ralph Lauren, etc.Source: Weintraub Associates, Inc., August 2011
    27. 27. Los Angeles:Where Trends Happen
    28. 28. Los Angeles is #1 or #2 in Major‘Design-Based’ Industries (By Employment)Apparel & Textiles 1) Los Angeles 2) New YorkArchitecture/Engineering 1) Los Angeles 2) New YorkFood Manufacturing 1) Chicago 2) Los AngelesFurniture 1) Los Angeles 2) New YorkHealth Services & Bio-med 1) New York 2) Los AngelesMotion Picture/TV Production 1) Los Angeles 2) New YorkTechnology (including Aerospace) 1) San Jose 2) Los AngelesToys 1) Los Angeles 2) New YorkSource: County Business Patterns - Los Angeles Economic Development Corp 2009
    29. 29. Southern California Apparel: The Global Content ProviderThe West Coast is much less conservative when viewing‘new’ trends. There are no rules here….and no seasons.Hollywood style dictates US street-scene fashion – notEuropean or New York runways.The multi-ethnic mix creates a unique environment forcreative consumer product development.Use of global sourcing, licensing, design services,technology and strategic alliances contribute to L.A.’sincreased gross sales.
    30. 30. Fashion Industry Value to the L.A. Region’s Economy 2010 1997 Apparel & Textile $40.3 billion $22.8 billion Industry Sales/Value of Shipments Total # Employed 128,148 207,318 Apparel & TextilesSource: Calif. EDD: Bureau of Census, LAEDC October 2011
    31. 31. Democracy of DesignElle Magazine - Brazil Marie Claire - US Vogue - China
    32. 32. The California Fashion Association (CFA) is the Business-to-business forum for Californias Apparel and Textile Industries. Please visit our website: www.CaliforniaFashionAssociation.org Email: info@calfashion.org
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