I recently walked through Target’s athletic section. Not gonna lie, pretty impressed. Workout clothes get beat to hell and for the price of one Lululemon or Vuori shirt, I could get almost five from Target.
Why do I bring this up? I was doing the millennial thing and watching news clips on my phone when I saw a report from NBC’s Sam Brock on TODAY. It was about how Gen Z and millennials are spending more money at discount stores in efforts to change their spending habits while still getting quality, fashionable clothing. It’s no secret that clothes are expensive, inflation is high AF, and we in the younger generation have resorted to finding creative ways to look good.
But this whole discount spending trend got me thinking—has the long-term brand loyalty play of discount retailers over the last two decades finally paid off?
Brand Loyalty and Discount Stores Through the Years
There have been some pretty notable partnerships throughout the years between designers and discount retailers. We could look at Kohl’s and Vera Wang, Isaac Mizrahi and Target, and more recently, Law Roach with TJ Maxx. As Brock acknowledges in the TODAY piece, these stores have and continue to develop brand loyalty for consumers at a young age, despite these partnerships costing them more upfront. The overall goal is for these younger demographics to see discount stores as their go-to’s when they have more money.
Let’s say a Gen-Z’er is now 24-years old. They’re now in the workforce, living an adult life, and seeing how expensive things truly are. For the past 10 years, there’s a good chance they’ve stepped foot into a Kohl’s, TJ, Ross, Target, or any other discount store. What have they seen? Vera Wang, Isaac Mizrahi, and the other designers typically starting in the hundreds. But they’ve landed a nice piece of clothing for what? $20? $30?
Getting these younger demographics into their stores to see that luxury is attainable has likely driven to the success of this trend.
So, Where Does This Brand Loyalty Lead?
Well, that answer remains unclear. Wall Street has an eye on this trend with investors keeping tabs on TJX Companies (the parent company of TJ Maxx), for example. While spending is high now and the idea of brand loyalty seems to have worked, one must wonder where this trend will go when things get better. What happens when inflation goes down? What happens when Gen Z and millennial shoppers get more buying confidence? What will happen to the future of these discount stores with luxury designer partnerships?
An answer to be seen.
