High-income women covet luxury, still eye bargains
NEW YORK (Reuters) - A bag from Hermes, Jimmy Choo shoes and a T-shirt from... Target.
That's the shopping strategy that well-to-do female shoppers may adopt in 2008 and beyond, according to a panel at the National Retail Federation conference on Tuesday.
Economic troubles such as high energy costs have crept into the lives of women with an annual household income of over $100,000 and their confidence in the U.S. economy's health plunged to a two-year low in December, according to a survey by market research firm BIGresearch released at the conference.
So women are making changes in the way they shop. They are going to stores closer to home and making fewer trips.
And they are turning into serious bargain hunters.
Even those with a love for luxury brands are not hesitating to buy items on sale or are "trading down" and shopping at discount stores like Target Corp.
"They will pay for something if they really want it," said Robin Lewis, head of Retail Vertical at Goldman Sachs' subsidiary Vantage Marketplace. "But they won't pay a penny more than what they can see it is worth."
To that end, almost a third of women who shopped at Bergdorf Goodman, Neiman Marcus or Saks Inc in the last three months also shopped at Target, while 11.6 percent of them went to Wal-Mart Stores Inc, the survey found.
PRICE VS QUALITY
About 71.1 percent of women with household incomes of over $150,000 who were surveyed, felt that price does not make a brand.
That means women, who normally dream of buying a Chanel or Christian Dior product, would not hesitate to buy an item at a discount retailer if the quality and variety appealed to them.
"It's all about the product," said Janet Carr, vice president of Strategy and Consumer Insights at Coach Inc.
Nearly 41 percent of women surveyed said they have become more practical and realistic about their purchases over the last six months.
In that period, several U.S. retailers took hits to sales as higher food and energy costs, a slow housing market and credit issues cornered consumers into spending less.
Luxury retailers have also begun showing signs of stress.
Last week, jeweler Tiffany & Co said its U.S. same-store sales fell 2 percent, citing a cutback in consumer spending.
That data spooked investors and raised fresh doubts about luxury sector's resilience.
Still, high-end retailers have plenty of opportunity for growth and polishing their online presence could be one, the panelists said.
"It is a great way to market to (women)," Coach's Carr said. "You can bring her into the store. Bringing her into the store means you have a chance to sell something. Now you've got her."
(Reporting by Aarthi Sivaraman, editing by Leslie Gevirtz)