The Best of BoF 2023: A New Consumer Economy

Within the face of relentless inflation, sky-high rates of interest, and ever-gloomy client sentiment, a transparent image of what’s working in retail — and what isn’t — emerged in 2023.

The winners? Energetic and out of doors manufacturers equivalent to Alo Yoga and Salomon-owner Amer Sports activities, benefitting from thousands and thousands who adopted a extra health-conscious lifestyle after the pandemic; e-commerce gamers agile sufficient to pivot to wholesale and retail as customers returned to shops; and the savvy retailers who’ve efficiently conveyed a sense of value to the cash-strapped client. All of the whereas, luxurious has stalled immensely because the so-called aspirational customers ran out of disposable savings. Effectively-capitalised direct-to-consumer firms reckoned with a damaged enterprise mannequin that favoured progress over revenue — the results of which have finally caught up.

Sadly, dismal market situations are right here to remain. Whereas economists doubt the probability of a recession in 2024, discretionary spending will proceed to be challenged as we enter the brand new yr.

Even so, the buyer has confirmed to be resilient time after time. Regardless of unfavourable circumstances, manufacturers and retailers will shine once they present their greatest aspect: comfort, service, and a differentiated product.

Prime Tales

Where US Consumers Are Shopping and What They’re Buying: Luxurious spending could also be flagging, and Miami has misplaced a few of its pandemic-era warmth. However there are many alternatives for vogue manufacturers in the event that they know the place to look.

What Parade’s Sale Says About the State of DTC: The Gen-Z intimates model’s sale to a little-known strategic is the most recent in an ongoing sequence of less-than-desirable exits for unprofitable digitally-native start-ups.

Farfetch Found Its White Knight. What’s Next?: The South Korean e-commerce agency Coupang has saved Farfetch from potential chapter, and will use its logistical and advertising would possibly to unravel among the luxurious e-tailer’s seemingly intractable issues. However “all the things shops” have a spotty observe document in terms of high-end retail.

Hyper Growth Is Over for Sneakers. What’s Next?: As incumbents like Adidas and Nike grapple with a cooling market, area of interest gamers and newcomers have a chance to flourish.

Why Some Brands Are Thriving in a Tough Economy – and Others Aren’t: BoF evaluation of dozens of publicly traded vogue and wonder retailers’ newest earnings reveals firms that may take advantage of compelling case for worth have been essentially the most profitable.

How Uniqlo Finally Won Over Gen-Z: Its viral cross-body bag and different TikTok favourites have helped the model be a focus for youthful shoppers. Now, the retailer needs to open extra shops within the US and Europe.