Rag Trade 101: Targeting the unemployed

From ages 16-23 you could find me on any given day walking lazily through my local mall spending my parents’ hard earned cash and pushing my credit cards to the limit all for the sake of picking up more disposable clothes. As a child born during the height of the “me” focused 80s and an adolescent during the prosperity of the 90s, being brand conscious had been hardwired into my very soul the moment my mom slipped me into my first pair of Oshkosh B’Gosh overalls. At that tender age, my love affair with quality over quantity began and like most of my peers I soon associated certain brands not only with quality but with my social status and ultimately my self-worth.


Fast forward a few years and the very age range that has been retailers’ bread and butter for the past 10 years is now experiencing a record high of unemployment. With 18% of high school drop outs, college grads, newly minted lawyers and MBAs unable to become productive members of society, the mid priced brands that they learned to rely on are now out of their price range with student loans, credit card debt, and things like rent constantly looming above their heads. For retailers this means that with their core customer now unable or unwilling to purchase merchandise at full price that they would have bought a few years ago, they must either shape up or ship out as they watch former loyal customers shop at lower price points. While brands like French Connection and American Apparel, both targeted at very hip and very unemployed 18-24 year olds, flounder to reconnect with their core customer while maintaining profitability, brands like Forever 21, with their fast fashion and low prices, are busy exploiting not only their usual teen and tween markets but the unemployed and underemployed recent college grads. This has forced mid-priced brands, which once placed a premium on selling quality goods for a reasonable price, to ride the trend wave like their lower priced counterparts without having the means firmly established to do so. Not only are mid-priced brands suffering from a supply chain not set up to quickly turn out trends at a fraction of their current costs, they have also began to alienate their core customer by changing their product offering in an effort to make up for some of the losses they have incurred.

American Apparel, once operating primarily as a wholesaler selling blank t-shirts to screen printers, uniform companies, and retail brands, has gone from a hipster haven of affordable basics to a parody of itself that none of their former diehards would set foot in. With ads on every blog showcasing their costume like full body lace leotards on barely legal practically nude models, and stores filled with out of print gay porn magazines, Mr. T starter kits, and overpriced vintage sunglasses American Apparel has gone from ironic to sad in the past three years in an effort to keep up with the hipstering of America (I’ll do a post on that soon I promise, as it is one of the banes of my existence). By overreacting to what they thought their loyal customer wanted and filling their store to the brim with overpriced vintage and vintage inspired goods, American Apparel has not only alienated their customers but overestimated their loyalty. Why would anyone buy a $200 pair of vintage frames when they could go to any thrift store and pick up the same pair for $5?

Eventually the recession will pick up and the once jobless Millennials will get hired and start spending that hard earned grown up money. However, due to their experiences with chronic unemployment no one knows if they will spend the way they did back in 1999.