What retailers need to know about the. Holiday FINdex. for 2015

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1 What retailers need to know about the Holiday FINdex for 2015

2 What is FINdex? FINdex, or the Fashion Innovation Index, is a quarterly index used to measure US consumer sentiment toward fashion trends in the apparel, footwear and accessory industry. As the index is tracked over time, the data provides the retailers with a better understanding of the link between consumer sentiment and retail sales. Data is collected from a survey developed through a partnership between Kalypso, Indiana University s Center for Education and Research in Retail at the Kelly School of Business, and CollegeFashionista. The CollegeFashionista members we survey are highly interested in fashion and style and keep a close eye on trends on their college campus and in stores and websites where they shop. They also use the Internet and other sources to stay informed about fashion in the future by watching runway trends from shows around the world. 2

3 Ringing the Bell on Retail Innovation 2015 Holiday FINdex Results by Steve Riordan The 2015 Holiday FINdex indicates the upcoming shopping season may be a strong one, at least for apparel and footwear. Here s what we think retailers should know. Merchandise innovation may end up being every retailer s best friend this holiday season. The main driver behind this season s strong FINdex score is the perceived amount of innovation appearing in color, prints and especially fabrications. Mainstream retailers have been learning how to develop real merchandise innovation by adapting leading practices from top companies in the athletic/ performance apparel and footwear categories. It is critical for retailers to develop highly effective product development capabilities for both merchandise and the underlying materials to create the consistent flow of innovative, fresh product that the women we surveyed and millions more like them demand. 3

4 The FINdex score this season is one of the highest reported. Shoppers intend to spend more than last year and are enthusiastic about the products they see in stores Back to School Holiday Spring Back to School Spring Back to School Holiday Holiday 3.76 The FINdex calculations are based upon current sentiment and a spending index. Spending Index is based on survey question 1, the spending index is calculated by taking consumer perception of whether they have more or less to spend, then weighting and combining the responses. Current Sentiment acts as a multiplier for the Spending Index. Based on survey questions 2, 3 and 5, this multiplier is calculated based upon innovativeness, enthusiasm for current products and willingness to shop early. 4

5 The Spending Index has increased consistently since last holiday season. But the real driver of this season s high FINdex is a strong increase in Current Sentiment, which indicates a positive perception of innovation BTS 2013 Holiday 2014 Spring 2014 BTS 2014 Holiday 2015 Spring 2015 BTS 2015 Holiday Spending Index Current Sentiment 5

6 The fashion gurus we surveyed consider apparel and accessory products this season to be significantly more innovative. They also indicated they are likely to begin shopping earlier. Respondents are asked 3 questions: Considering the apparel and accessory products you have seen offered this season, how excited are you about the items you have seen relative to last year? Enthusiasm Considering the apparel and accessory products you have seen offered this season, how innovative are the items you have seen relative to past years? Innovativeness How likely are you to shop early this year to make sure you get the items you ve seen? 2013 BTS 2013 Holiday 2014 Spring 2014 BTS 2014 Holiday 2015 Spring 2015 BTS 2015 Holiday Willingness to Shop 6

7 When it comes to shaping brand perception, retailers need to pay attention to all their channels. Today s fashion gurus expect a unique and convenient shopping experience both in the store and on line. Interestingly, they don t seem that interested in good mobile apps. Respondents are asked: As you think about your favorite brands rank how important the following factors are in shaping your positive perception of the brand. Well organized products and displays An interesting and informative website A beautiful store Regular discounts Fresh merchandise all the time Fast, efficient checkout Lots of locations Employees that fit the brand A good mobile app Digital Receipts

8 Brand Perception Rankings Fast fashion brands continue to be popular, reinforcing the fact that innovation and fresh product are keys to satisfying this group. Topshop has topped this ranking since last holiday season.u.k. based online fashion retailer, Missguided, is one to watch. They brand themselves as rapid fashion, offering new trends daily at an affordable price. Respondents are asked to review the listing of brands and record their perception of them: 0 TOPSHOP TOPSHOP FREE PEOPLE ZARA ZARA STEVE MADDEN URBAN OUTFITTERS FREE PEOPLE STEVE MADDEN URBAN OUTFITTERS H&M H&M URBAN DECAY URBAN DECAY ANTHROPOLOGIE ANTHROPOLOGIE MADEWELL MARC JACOBS NASTY GAL NASTY GAL MARC JACOBS MADEWELL KATE SPADE KATE SPADE BRANDY MELVILLE FOREVER 21 BURBERRY BRANDY MELVILLE FOREVER 21 J. CREW BURBERRY LULULEMON AMERICAN APPARE MISSGUIDED VERA WANG MICHAEL KORS EOS AMERICAN APPAREL MICHAEL KORS EOS BANANA REPUBLIC BANANA REPUBLIC EXPRESS EXPRESS GAP GAP FOSSIL FOSSIL COACH COACH TRUE RELIGION TRUE RELIGION SPERRY SPERRY 8

9 Visit kalypso.com/findex for previous FINdex results and analysis. Kalypso is a global innovation consulting firm. We work with organizations to deliver better results from innovation. For more information, visit kalypso.com. Follow Kalypso on and on Facebook at Facebook.com/KalypsoLP.

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