Over the past two days in the course of research for a project, I visited two leading upscale retail venues.  What I found was surprising…or maybe it wasn’t.  As a trend watcher, I wanted to learn if people are still shopping in light of our current economic crisis and if so, what are they buying?

 

I visited the Short Hills Mall, a very upscale shopping center not far from Manhattan in a New Jersey suburb inhabited by a lot of Wall Street executives.   And I also spent time at The Crossings Outlet Center in the Pocono Mountain region of Pennsylvania.  The Crossings houses an array of upscale factory outlets like Ralph Lauren, Coach and Burberry.  On Sunday, it was packed and people were shopping like there was no tomorrow.  Why?

 

1. Because there is no tomorrow?
2. Because the economic situation doesn’t affect people outside the New York to Washington corridor?  (Most auto plates were from Pennsylvania)
3. Because outlet centers are where people turn for discounts in an economic downturn?
4. Because it was a holiday weekend and they were running incredible promotions?

 

I spoke with a number of salespeople and they said business was very good, although they were not sure it would be as good as last year.  The promotions were deeper and they were surprised that people were still signing up for new credit cards to get increased discounts.  I was surprised that banks were still letting people sign up for credit???

 

The consumers were buying everything.  Clothing and accessories were every bit as popular as home goods and gourmet food.  At the Coach outlet, I watched one woman buy five handbags.  She did not appear particularly affluent and I asked her why she was buying so many.  Was she perhaps doing some early holiday gift shopping?  No, she just recognized that the prices were very good and she just loves Coach…I asked another young shopper who appeared to be in her Twenties if she was concerned about the economy and she said that her job was “not affected by the economy.”    

 

On the other hand, Short Hills was like a tomb yesterday, despite the Columbus Day holiday and the prevalence of promotions.  I spent a lot of time at Neiman Marcus chatting with one of the department managers.  (He didn’t have anything else to do…)  He said that the store “traffic died when the stock market started plummeting.”  And, despite yesterday’s rise on Wall Street, people had yet to return to the stores. 

 

The high end designer shops at Short Hills like Gucci, Fendi, and Jimmy Choo were particularly empty.  The only action in the mall was at the chains like JCrew, Williams Sonoma, The Gap, and the only department store with traffic was Macy’s. Shoppers at J Crew were snapping up a lot of promotional items, especially sweaters and accessories.  At Williams Sonoma, they were buying gourmet food items and small cooking tools like cookie cutters and bread molds.  (All of these items fall into the category of “small indulgences” and we will examine this trend in a later column.)  The designer shops were begging for business.  Every time I walked in, the sales people were all over me.  

 

Of course, the economic crisis is now over (hah!) so maybe people will start to shop again…OR will upscale/luxury consumers shift their shopping downwards to more affordable retailers and more affordable venues, like outlet centers?  And if the upscale consumer is shifting downward, what will less affluent consumers do?  Shop only at Wal-Mart or stop shopping altogether?  We, at AIM, will be out in the retailers monitoring the situation and will keep you posted… 

 

2 Comments

by Liz on Oct 14 2008 12:17 pm

I think that lots of Americans are in denial. Like the young person in the store, they don't understand that problems in the economy will affect us all. Aren't they doing what Americans always do in a crisis...shop??? Isn't that what Pres Bush told us to do after 9/11?

by Alex on Dec 04 2008 02:27 pm

There are still a lot of people shopping at the Apple store and lots of people are buying Wiis for christmas. Maybe they are just buying specific things that they really want.