Story of how value brands have transformed the UK clothing market
The UK clothing industry has three markets: the value market, the middle market, and the premium market. Unlike India which is clearly value market driven; the middle market remains the largest market in the UK. However, the value market and the premium market have been increasing their market share at the expense of the middle market in recent years ('Current trends and future opportunities for the UK clothing industry', Verdict Consulting for Barclays, March 2011). My focus is on the shift in the value brand market since 2000, particularly how value brands have managed to shift the label of cheap and nasty to economical and fashion conscious.
In 2000 only '27.9% of clothing consumers regularly shopped' at value brands, however by 2008 the figure had increased to 'well over half of consumers' and continues to grow whilst the UK is still experiencing a recession ('Current trends and future opportunities for the UK clothing industry', Verdict Consulting for Barclays, March 2011).
From my point of view this change has occurred not just through a necessity to save money in an economically challenging environment but also via a change in customer perception.
In my mind there are 4/5 categories to the value brand clothing market in the UK: Supermarket retailers with a general appeal, such as Tesco, Sainsbury's and Asda; shops primarily appealing to a younger market, approximately 16-25 year olds, such as New Look and H&M; shops aimed at larger women/ older women, including Bon Marche and Evans; and finally TKMaxx and Primark, shops that deserve their own categories in my opinion.
With the exclusion of TKMaxx, Primark, New Look and H&M, all of which shall be discussed individually, the value brands have traditionally battled the stigma of being 'value'. So what changed? Total rebranding and clever avoidance of associating their clothes with their parent brand.
Although there do exist exceptions to the rule, primarily the value brand clothes avoid placing their brand name on the clothes and instead opt to have a house of brands not directly connected to the shop's name e.g. Tesco and their F&F clothing line, Sainsbury's have their TU clothing line and Primark has its Atmosphere clothing line. Excluding Primark and TKMaxx who set their own trends and rules, the vast majority of value brands use named designers to add credibility to their lines. For example Evans uses the designer Clements Ribeiro, Sainsburys have Gok Wan and Asda have Moda and Barbara Kulanicki.
The customer perceptions of TKMaxx, New Look and H&M are, in varying ways, unique from the other value brand clothing companies. Although widely accepted as value brands or at least value providing brands, their target markets haven't really had the same negative associations with them that the other brands had to fight off.
I believe that New Look and H&M have managed to avoid the stigma because their target consumers tend to be 16-25 years old, either in education and thus not earning, or working on the lower rungs of the corporate ladder- aka having little money for clothes. Simply put their market neither can nor expect to pay big money to keep up with trends and this is how New Look/H&M price their products and market themselves. Everything about their shops targets this age of consumer- the music (current chart music with varying levels of indie persuasion), the pictures on the walls (include models that are, if not the same age, then a very similar age to the target consumer), as well as the colour scheme/décor of the buildings.
TKMaxx, on the other hand, markets itself as providing popular named premium brands at low cost; 'Big Labels Small Prices'. TKMaxx claim to deal directly with designers and brand owners and then pass their savings on to the consumer. As a result, a consumer doesn't feel like they are wearing a value brand but rather the opposite- as TKMaxx make them believe, they are simply a 'savvy' shopper. For instance, from their website the inference is that TKMaxx consumers are just 'in' on the shopping secrets- there is even a technique to making the most of a TKMaxx store! The unique shopping experience, the unique clothes (TKMaxx boasts that no two shops stock the same clothes) and the unique concept of providing big brands on the high street at outlet pricing ensured that TKMaxx has never really seemed a 'value' brand.
Alongside TKMaxx, Primark should be considered as a unique value brand in the UK. It is hard to put into words how Primark has avoided the pitfall of bring a 'value' brand, especially given that in my experience their products are noticeably inferior to other similar products from competitors. My personal perception of Primark, which given the nature of consumer culture is probably not unique, is that Primark clothes are so cheap that the slight dip in quality is made up by the ease of replacing the item as required. Furthermore, they simply serve the purpose for which they are needed; most of my purchases from Primark have been for a specific purpose and I never expected them to last very long! One such example is when I purchased a black t-shirt specifically to cut it up for a one-off Halloween costume.
In terms of putting this seemingly new mind-set in to practice I would like to draw on my own shopping experiences. Having just recently left full-time education I am well acquainted with the average female university student mind-set and their approach to clothes shopping- only purchasing premium/ middle market branded products predominantly during sale periods (or using their birthday/Christmas money!), and purchasing value products largely as and when desired.
Although there is still an element of prestige associated with premium brands that cannot be replicated by the value brands, there is a shared sense of approval in terms of the value brands. Instead of being a cheap means to an end, many students (myself included) searched for and bought value products that defy their price category; there is a degree of achievement buying something from Tesco that surprises people when they find out where it was purchased- or at the very least when its origin isn't immediately guessable.
Even though reports suggest that the value brand has been growing since the early 21st century and not just during the recent economic downturn, with economic recovery inevitable (hopefully), it will be interesting to see if the value brand maintains its growth or if increased financial prosperity sees consumers turn towards costlier middle/premium products. It is possible that consumers are starting to value the clothes on their quality and less on the prestige of the brand; having experienced value brands for the last decade or so and persistently increasing purchases from that market, perhaps this is a message to middle markets; if they want to maintain their dominance then either the quality or price, needs to become more compe