When Primark, the next-gen’s fast-fashion retailer of choice, opened its first U.S. store in Boston’s Downtown Crossing in October of 2015, I said, “Primark’s value proposition sets the pricing bar so low that it will be almost impossible for competitors to crawl under it. And they’ve set the experience and trendy merchandise bar so high, relative to their pricing, that competitors will find it an enormous challenge to simply match it, much less beat it. They own this space.”

And indeed, Primark’s value proposition did own its space as it rapidly expanded since the 2015 Boston launch. Dublin, Ireland based Primark has opened 11 more stores in the U.S. (including one launched recently in Philadelphia). Except for one store in Chicago, they are all on the East Coast. All told, there are roughly 392 Primark stores in 14 different countries.

[callout]Even before the pandemic, next-gens were getting anxious about climate change, and began to think twice about the wonders of discardable fast-fashion and a new frock for every occasion.[/callout]

While they struggled through the pandemic, along with the rest of the retail industry, its quarter ending June 19 was up by 207 percent YOY, and three percent over same quarter sales in 2019. I am not blown away by these numbers, however they reflect the same unique value proposition I lauded them for. The question is: did they expand fast enough prior to the pandemic to reach some level of dominance across the U.S.? And, did Primark’s value proposition pivot to align the brand with next-gen’s shifting values?

A New Zeitgeist?

Primark launched into the 2015 zeitgeist of the moment. The brand was “fast- fashion-cycled” trendy merchandise, albeit (commensurate with pricing) of lesser quality, with a fun, tech augmented shopping experience. While this value proposition was not strategically unique, Primark’s execution of it was. It was like the Goldilocks recipe of getting it “just right.” In fact, the combination was so right that consumers’ perception of the value they were getting, for prices they found unbelievable, were well…unbelievable and potentially unbeatable. Anecdotally, one comparison shopper in the Boston store said that apparel and shoes are about 40 percent cheaper than at TJ Maxx and Marshall’s. Close on their heels, however, is another new darling of next-gens, Shein headquartered in Nanjing, China with more unbelievably low prices offered online to U.S. customers.

Another piece of Primark’s unique value proposition is an upscale in-store experience. Strategically, the experience focuses on next-gens, but more significant is the fact that anybody who enters that store would perceive they are in an up-market shopping experience as opposed to an off-price or outlet experience. This perception adds value to everything in the store, which makes Primark’s incredulously low prices an even more unbelievable deal. The term “great value” immediately usurps “cheap.”

So, yes, Primark’s timing hit the sweet spot of young consumers’ fast-fashion desires, and fun shopping experiences, all for practically nothing. However, has the zeitgeist shifted after six years? I believe it has. And it’s being driven by Primark’s very own next-gen core.

Technology

In my opinion, the first strategic mistake Primark made when it launched in the U.S. was not recognizing the importance of ecommerce to its young consumer target. It viewed ecommerce as a huge cost which would not allow the brand to offer its rock bottom prices. My note to them is that ecommerce as well as marketing, should not be placed under the cost column. It’s an investment that over time, can exponentially increase sales. So, everyone bite the bullet and shave some short-term numbers off the top and bottom lines.

In retrospect, launching online along with physical stores would have accelerated Primark’s expansion in the U.S. and it would have increased combined digital and store basket size per customer.

Climate Change and Sustainability

Even before the pandemic, next-gens were getting anxious about climate change and began to think twice about the wonders of discardable fast-fashion and a new frock for every occasion. Suddenly an increasing number of new business models were created: renting; swapping; preowned; repair and return; BNPL; and likely many other options I’m not yet aware of.

And leading the charge, next-gens are learning about all of the things we must do to slow the effects of climate change. In Primark’s space, sustainability and reducing the effects of apparel materials and manufacturing — to say nothing of the global wastage in its wake is a big issue. Do I hear fast fashion becoming a bad word? Primark has gone assertive and public on its site with its positions on people, the planet and processes – responding to what their young customers demand. But saying it is one thing, actually doing is another.

Covid-19

Whammo, we are experiencing a pandemic. As has been said many times, Covid just accelerated everything: the good and the bad, and the urgency to address the transformation of old business models to align with the shifts in consumers values and desires going forward. This includes climate change, sustainability, social justice and the use of technology that can accelerate the positive realignments.

Primark’s business in the U.S. is still doing well, and their East Coast expansion, while relatively slow, seems to anticipate that growing just the way they have, with the brand’s unique value proposition, is the way they should continue.

Maybe, just maybe. But I wouldn’t bet against a young consumer culture with a totally new set of values. I believe next-gens are shifting away from compulsive consumption to conscious consumption. At the end of the day, Primark’s attraction of tons of stuff for (almost) free, may be less of an attraction and more of a turnoff.

The jury is still out.