Consumers search for a balance of “cheap” and “luxury” to fight looming inflation

Faced with increasing financial uncertainty, consumers worldwide are searching for ways to maximize the reach of their disposable income. For retailers wanting to meet and overcome consumer needs, this means a renewed investment in digital marketing to promote “cheap” “luxury” items and a great opportunity to start servicing customers in the run to the main holiday shopping season of the year.

In this regard data confirms the historical pattern of price realization in the apparel industry: “It has lagged well behind inflation rates and household income growth,” per a recent analysis by McKinsey. Assessing how apparel brands can adapt to the current inflationary environment, the consultancy firm recalls that “From 2010–19, for instance, US apparel prices rose at a CAGR of just 0.4 percent, lagging both the total consumer price index (CPI; CAGR 1.8 percent) and median household income (CAGR 3.8 percent) That gap has recently narrowed, but in the United States, price gains are still trailing CPI growth by about one percentage point”.