The dynamics of the ruble exchange rate, as well as the dynamics of the GDP exchange rate, depends on the dynamics of oil prices. If 2012-2013 years. were a stable period, then 2014-2015 years. - became a negative period for the economy in general and fashion retail in particular. But in 2016, positive changes were outlined, despite continued economic sanctions, partly due to the import substitution policy.
In general, the incomes of the population decreased, while the official subsistence minimum rose by 2,2% (from 9673 rubles in 2015 to 9889 rubles in 2016). According to Rosstat and the Ministry of Economic Development of the Russian Federation, the average monthly salary of Russians in November 2016 amounted to 36 rubles, having decreased by 195% since January.
There were more poor over the past year: if every seventh Russian lived in 2015, below the poverty line, then every sixth in 2016. In total, 13,9% of Russians live below the poverty line, this is 20,3 million people.
The share of the poor is 30%, about 85% of the population does not have sufficient income (buying household appliances is difficult for them), about 40% of the population have difficulty buying clothes, even the cheapest.
The situation has hardly changed since the 2015 year.
The policy of employers in the 2016 year, alas, did not contribute to improving the situation on the labor market. 24% of Russian companies carried out staff reductions (Romir data), 18% - salaries reduction, 10% - social benefits reduction (cut or completely canceled).
Changes in consumer preferences and patterns
In 2014-2016 consumer behavior patterns and priorities have changed dramatically under the influence of economic factors. 45% of the population have either already seen or are expecting a decrease in wages in the next six months. The assessment of changes in one's wealth in 2016 has been consistently low since the crisis began.
The majority of respondents are pessimistic and believe that there will be no significant changes over the next year: neither the conditions of the existing lending (59%), nor difficulties in obtaining it (57%), nor the transition to official wages (56%), nor layoffs (54%). Among the categories of goods that began to be bought less often / in a smaller volume / cheaper brands / in a cheaper place - clothes and shoes, car tires. These two categories are most sensitive to the deterioration of the economic well-being of the population.
Foreign networks are developing more actively than Russian
The volume of the fashion market in 2016 amounted to 2295 billion rubles (34,3 billion US dollars). Market dynamics in 2016 year: 1% to 2015 year in rubles (10,2% in dollars).
In 2014-2015 global brands maintained their positions with a favorable money supply, while Russian companies raised the price of their products. In 2016, there was an equalization of the price growth rate.
An obvious trend is that the number of global chain stores has increased and the number of Russian stores has decreased. Marks & Spenser, Massimo Dutti, Oysho, Stradivarius, Pull & Bear, ZARA, Bershka, H&M Group, Mango, represented on the Russian market, increased the number of their stores in 2016. Only Motivi showed negative dynamics. Only Baon, Gloria Jeans, Sportmaster and O'stin have grown out of Russian chains with new retail stores.
The growth rate of foreign leaders is significantly higher than the growth rate of even two leaders of the Russian market
Our waiting for the "flowering" of multi-brands
The main changes in consumer behavior that contribute to the "heyday" of multi-brands are as follows:
The choice of goods at lower prices:
- outflow to cheaper brands;
- waiting for sales.
Buyers seek information verification:
- acquire goods after a thorough study of the information. Learn price alternatives;
- refuse impulsive purchases;
- refuse from “intrusive” purchases and from purchases “for future use”.
3. Speed and convenience
- interest in the latest gadgets.
According to surveys of Euromonitor International and RBC, most people are now looking for discounts and are waiting for sales. So, 38% of respondents said that they tried to buy clothes and shoes at discounts or on promotions. 31% paid attention to special offers, but made a purchase only if the item was liked. 18% deliberately waited for discounts and promotions for the purchase of clothes / shoes, and only 10% said they did not pay attention to discounts and promotions.
The number of Russians for whom quality was the main criterion in their choice (from 61% in 2013 to 50% in 2016) is much more important today: the number of people for whom price is the main criterion has increased (from 13 % in 2013-m to 16% in 2016-m).
Savings Consumption Model
1. Consumers will try to get the maximum benefit from the seller (rational consumption, buying at a discounted price). Buyers began to study price tags more carefully, try to buy at discounts and react more actively to promotions and bonuses.
2. Now the consumer has learned the preliminary planning of purchases and has become very sensitive to promotions: people will learn about them in advance and, accordingly, plan their purchases. Over the year, the share of retail chain revenue from promotions increased from 30% to 35%, and in hypermarkets to 45%.
3. People are looking for alternative options (either they are switching to cheaper brands, or they are looking for their brand among other distribution channels). 76% of respondents said they would look for alternatives to familiar shopping centers to save on clothing / shoes.
65% of Russians expressed their willingness to buy more with a wider range of products. One of the ways to provide consumers with a choice and the ability to compare prices is a multi-brand store, which presents a wide range of products.
Multi-brand stores are the second most popular among Russian women (24%). Multi-brands are slightly ahead of retail chains (23%). This is partly due to the inheritance of the Soviet consumption model, when the department store was the main place of shopping.
Reasons for the popularity of multi-brand format
Multi-brand format allows you to:
- ensure the offer of clothes / shoes in the price segments “medium plus” and “premium” in the regions.
The limited volume of demand in the regions for women's clothing and footwear in the upper price segment makes multibrands virtually the only sales channel for “expensive” brands.
- reduce the risks of retailersarising when working with one brand;
- create an offer in one store for different target audiencesatisfying the various functional and style requirements of the audience.
Cities where consumers prefer multi-brands:
St. Petersburg, Kaliningrad, Kazan, Perm, Yekaterinburg, Irkutsk and Krasnodar.
Source: INFOline, FCG
In 2017, according to FCG estimates, serious openings of offline multi-brand stores are expected. So, in Moscow in the spring of 2017, the PODIUM Market multi-brand department store will open its doors, it will be located immediately on two floors of the Golden Babylon shopping center on Mira Avenue.
In St. Petersburg, Gold Union will open a multi-brand boutique on Staro-Nevsky Prospekt.
In Voronezh, TSUM Voronezh will provide consumers with the opportunity to receive offers from the latest collections of leading world brands - Brunello Cucinelli, Kiton, Roberto Cavalli, Sonia Rykiel, Emanuel Ungaro, Blumarine, Canali, Malo and others - in their hometown. The project also provides for more democratic brands - Mango, S'Oliver, Superdry, Cortefiel and others, focused on a young, educated and fashionable CA.
In Perm, a new format store Rada will sell clothes and shoes of Russian and foreign manufacturers.
The second-largest European network of footwear, bags and leather goods department stores, the Polish company CCC, plans to come to Nizhny Novgorod. This network comes in for the first time and immediately opens stores in two shopping centers of the city - “Lower Capital” and “ZharPtitsa”.
Meanwhile, according to market experts, the most successful channel for a multi-brand format is an online channel. Online sales are in line with consumer trends. The economic downturn has become a catalyst for the development of the online commerce segment. 44% of buyers think that shopping on the Internet is a good way to find an interesting thing; 39% - a way to save money; 34% - a way to save time; 22% of Russians surveyed do not buy clothes / shoes on the Internet at all.
The time spent by users on the network has increased. Today, 57% of Russians go online every day (+ 9,3% compared to the 2015 year).
The popularity of "Made in Russia" is the second most important consequence of the crisis in the fashion market. This was facilitated by: - an active campaign to popularize the Made in Russia brand;
- in a situation of aggravating economic crisis among local consumers, the demand for goods that are produced in our country increases.
Polar Russian brands: Unichel, IVANOVA, A La Russe, 1001 dress, Mir stores, Oh, my, TVOE, Kotofey, MARI AXEL, Two-Ta, GLZN by Galina Zhondorova, OZOZO.
In the wake of Made in Russia, Russian fashion designers (Ulyana Sergienko, Alena Akhmadullina, Alexander Terekhov and others) are actively developing a “Russian” theme in their collections. The “Russian” theme is actively used in children's collections of clothes and shoes. One of the important trends - large multi-brand retailers (TSUM, KupiVip, PODIUM Market) and niche / design projects (Dressone.ru) are increasingly representing local brands of clothes and shoes, as well as models of Russian designers. The PODIUM Market portfolio includes more than 15 Russian designers, the first in Nizhny Novgorod a full-fledged store of domestic brands of street clothes and accessories "Rodina" also more than 15 of Russian brands, Aizel.ru represents more than 60 of Russian brands.
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