If it seems like people only shop at discount stores today, that’s because it’s true.
Off-price buyers now represent a whopping two-thirds of all U.S. consumers, according to a new study by Checkout Tracking, The NPD Group’s receipt mining service.
That’s not all: these deal-hunters also account for 75 percent of apparel purchases across all retail channels—a number that’s rapidly rising.
“Off-price retailers are resonating with fashion and cost-conscious consumers alike, and are stealing department store business for good reason,” Marshal Cohen, NPD’s chief industry analyst, stated. “Off-price is second only to the online channel in terms of growth rate.”
It’s no secret that department stores are struggling. Macy’s, Nordstrom, Neiman Marcus and Kohl’s have posted less-than-stellar quarterly results of late, while the likes of T.J. Maxx, Marshall’s and Burlington continued to shine.
So who are these bargain-hungry buyers? More than half are consumers ages 45 and above, Checkout Tracking discovered. Meanwhile, older Millennials (25 to 34) make up about 16 percent. The receipt mining service, which analyzes and follows consumer behavior over time, found that both of these demographics have increased their share of off-price apparel purchases.
“Consumers are clearly looking for better deals and they know if they shop at an off-price retailer they will get them,” Cohen added.
That explains why traffic to off-price stores—whether a consumer bought something or not—increased by 4 percent in the year ended Apr. 30, compared to the same period last year. Furthermore, NPD’s Shopper Insights Service found that off-price retailers converted 50 percent of shopping visits to their brick-and-mortar locations to a purchase.
As Cohen noted, “Apparel shoppers are finding just what they want at off-price retailers at the right time and at the right price, and that isn’t always the case with department stores.”