What if the American consumer never comes back and we never want to pay full price again? If history tells us anything, this isn’t the case, but I also don’t think we have seen anything like this before. There is a rapid expansion in the off price retail market with stores like Nordstrom Rack, Loehmanns and Off Fifth popping up all around the country. In the past these stores stayed in the deep suburbs or in “outlet malls”, now they are showing up in dense metro areas of Los Angeles, New York & Boston right across from iconic full price malls like the Beverly Center in Los Angeles. Not only do these retailers have great prices, they have the same exact brands and almost the same product that sits in the full price stores. The consumer does not want to get ripped off anymore and they are exercising their power and treasure hunting for brand name products in the new frontier of retail.
The other thing I want consumers to know, is that the goods you are buying at stores like Nordstrom Rack are actually cut up specifically for these stores because the demand is so high right now. Please don’t think its excess inventory because no one has excess anymore due to reduced production. The reality is that this is a new and large revenue generator for brands, and in some cases it could be up to 40% of a brands sales are generated by off price cut ups. I am not going to name names but EVERYONE is doing this right now. So if you are consumer enjoy the great prices, and if you are brand get hip to the game or get out!
Dee Murthy: My Life 