After years of a high-low market split, midrange consumers are due more attention.
The demise of the department store — a favored destination of middle-class shoppers — has been illustrative of a broad shift in retail. Stores catering to the low end of the market (think discount “dollar” stores) and those focused on the high end (think RH galleries) have done fairly well, but many of those catering to the middle of the market have struggled.
“I think one of the most important narratives to understand retail over the last five to 10 years has been the bifurcation of retail. … Retail has essentially moved to two points: It’s moved to value and it’s moved to luxury,” says Ethan Chernofsky, senior vice president of marketing for Placer.ai, a marketing intelligence firm with U.S. headquarters in Santa Cruz, California. Chernofsky spoke during an online seminar on retail trends hosted by EMarketer in July.
But Chernofsky sees a shift coming, in part because of a saturation of deep discounters and the rapid loss of retailers appealing to middle-class shoppers.
“You’re going to see efforts made to hit that middle more effectively and get out of the pure, extreme value and go a bit higher (in terms of price points),” Chernofsky says. “And that’s going to be a really significant next wave of where retail is headed.”
If you’ve focused your bedding selection on the high or low ends of the market in recent years, here are some ways to meet the needs of the shoppers looking for something in the middle.
Emulate Target’s Mid-Range Strategy
Chernofsky sees Target as “the standard bearer” of the middle. “Target gets that we want to save money on socks but we’re more willing to spend money on toys (or other categories),” he says. “… That’s what defines the middle. It’s not pure value and it’s not pure luxury. It’s a mix of both.” So, be like Target, offering quality, entry-level beds that are good for second homes or guest rooms and then highlight feature-laden beds that provide clear value at midrange prices.
Educate Customers on Value
Hold a training session or two for retail sales associates, focused on stepping shoppers up from the “good” to the “better” models in your good-better-best lineups. And devote some of your marketing budget specifically to promoting your better beds.
Rethink the Mall Experience
The decline of department stores helped lead to the decline of shopping malls, but some are making a resurgence as centers combining residential, commercial, entertainment, dining and retail. By doing so, they’re becoming destinations again for middle-class consumers. A local mall might be the right spot for your next brick-and-mortar store.
Differentiate with a Private Label
Working with a manufacturer to develop a private-label line is an ideal way to hit price points in the middle while offering shoppers something they can’t get elsewhere. Focus on differentiation and quality.
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