Excerpted from BrandChannel “Value Store Brands: High-end Taste for Low Spenders” by Barry Silverstein, September 29, 2008
* * * * *
Arguably, the king of cheap chic is US retailer Target. Faced with intense retail competition years ago, Target chose “to reposition itself as a mass merchandiser of affordable chic goods”…While Kmart was approaching bankruptcy and Wal-Mart was dominating the retail market with low prices, Target “successfully associated its name with a younger, hipper, edgier, and more fun image than its competitors. Target is often pronounced in faux French, ‘Tar-zhay,’ to connote its trendy sensibility.”
Target achieved differentiation…This ‘cheap chic’ strategy enabled Target to become a major brand…Target’s strong sales results over the past several years prove that the strategy has paid off…the chain is doing better than many of its competitors, buffered by well-regarded store brands, clever advertising, and novel merchandising.
…One reason Target’s brands have achieved cheap chic status is Target’s emphasis on design. Fashion designers such as Mossimo, Isaac Mizrahi, Philippe Starck, and Sigerson Morrison have developed exclusive lines for Target…These collections have the cachet of name-brand designer merchandise, but at a price point far less than the typical designer-driven brands sold at more expensive retailers.
Other value stores use this strategy. Kmart, for example, sells Jaclyn Smith-branded fashion and Martha Stewart-branded housewares. Sears is currently featuring the exclusive LL Cool Jay Collection. Retailer Kohls has joined in, exclusively marketing Simply Vera Vera Wang, a premium fashion and lifestyle brand, and a Food Network-branded line of kitchen and home goods.
Price-cutting giant Wal-Mart has tried its hand at designer brands as well…Despite these efforts, however, Wal-Mart has not seen significant financial gains from its designer clothing—nor has Wal-Mart been able to match Target’s trendiness…
* * * * *
Target has exerted its cheap chic strategy in another area: upscale foods. Target markets a premium brand called Archer Farms…Archer Farms uses upscale packaging, often depicting full-color product photography on elegant boxes, bottles and jars. As with Target’s other upscale brands, however, the prices are unusually affordable.
Value-priced upscale food is a growing market in its own right. Chains such as US-based Trader Joe’s supermarkets…trade on the consumer’s desire for affordable gourmet products. Trader Joe’s unique differentiator is that…most of the items on its shelves are actually its own store brands. These products are largely specialty items priced considerably below gourmet food stores…
There is already a fair amount of evidence that store brands, chic or not, are seeing a significant uptick in sales because of the economy. In September 2008, Kroger, one of the largest US supermarket chains, reported that its own store brands accounted for a record 26 percent of its fiscal second quarter sale…
* * * * *
Whether it’s fashion, food, or any other product category, cheap chic is clearly a global trend…Global economic conditions are likely to keep the interest in cheap chic brands high. While the average consumer likes trendy merchandise at bargain prices, the wealthy shopper may find cheap chic increasingly attractive as luxury goods become too pricey…
Retailers like Target, who already know how to create and market cheap chic brands, stand to benefit the most. But adopting a cheap chic strategy could help many other retailers insulate themselves from an economic downturn. That would be a welcome development for consumers who don’t want to sacrifice quality design for price.
Edit by SAC
* * * * *
Full article:
http://www.brandchannel.com/start1.asp?fa_id=442
* * * * *
Want more from the Homa Files?
Click link => The Homa Files Blog
The Homa Files 
Leave a comment