Marshal Cohen
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In today's most challenging of times for the apparel business, there is a glimmer of hope. Hope that brands and licensed products
have a better road to recovery than non-branded and private label products.
When you compare the performance of branded vs. private label product over the past decade, it is evident that it has been
a challenging time for brands and licensed products as retailers made significant investments into private label. Private
label apparel product reached a peak of 4 percent of merchandise in stores. The good news here is that retailers are finally
beginning to recognize that private label merchandise isn't necessarily the safest bet in challenging times.
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As consumers reign in their spending, they have become more discriminating and expect more for their dollar. Brand power does
have its place in the spending equation during recessionary times. Just take a look at the past year and you will see that
consumers were more likely to have spent on branded product than on private label product. Sales for the private label market
share dropped 1 percent during the 12 months ended May 2009. While that may not sound like a lot, consider that the dollar
amount is $2 billion in lost private label sales. Those sales have shifted over to branded and licensed products.
Here's what's happening. In the past decade, retailers have made such a significant investment developing proprietary brands
and private label programs that they have gotten things out of balance. Too much of their own merchandise and it is owned
from start to finish. Longer lead times and less consumer acceptance all add up, over time, to maximizing the risk retailers
take. There is no margin for error. But with consumers looking for products that offer greater value these days, brands and
licensed products that also bring passion into the equation have a huge advantage. 
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Sales of branded product are actually fairing better than those of private label. While total apparel is down 4.8 percent,
the good news is that branded product is doing better. Branded product is down only 3.5 percent compared with private label
product, which is down 7.2 percent. That reflects a performance that is twice as challenging for private label products.
So timing is everything in apparel, and the time is now to take licensed and branded products to market with confidence and
realize that retailers are beginning to get the message. That message being consumers prefer known and trusted products and
are not willing to experiment or just settle for the lowest-priced product. They expect more from the products they buy and
are willing to reward those retailers that carry the right mix of brands and licensed products. Passion and brand recognition
play a huge role in purchasing in a down economy. Licensors are in a position to take advantage of the fact that timing is
on their side now. Therefore, showcase your brand and help the retailer remember what the consumer wants and why your brand
and product resonates better than the lesser known or unknown product.
Marshal Cohen will be presenting at MAGIC and Sourcing at MAGIC. His sessions are "The New Economy, The New Consumer" and
"The New Rules—Are You Ready?" In these sessions, audiences will be challenged to look at their businesses in a unique way,
identify opportunities and be encouraged to change the way they think about their business. Visit http://www.magiconline.com/ for more information.
