Next Q3 — Missing out on Millennials?

May 4 2016

The consumer — what’s going on?

So the Next Q3 results reveal the management are of the view that ‘the poor performance of the last six weeks may be indicative of weaker underlying demand for clothing and a potentially wider slowdown in consumer spending.’
But attributing a 4.7% slump in NXT Retail sales to a wider consumer slowdown might not tell the whole story.
Unreasonable weather aside, people are still buying clothes — they are just buying them differently.
Enter the shift to smartphones and the post-millennial, on-demand, everything-now attitude of the modern consumer.

Evidence of spillover to the Leisure sector…

People are going less to watch films at retail parks, according to RTN, which is where a no. of its sites are situated.
Perhaps people are going less because they are instead sat at home, with their laptops and smartTVs?
Where everything in the history of cinema is just a click away, from pre-Georges Méliès’ Le Voyage Dans La Lune right up to a bootlegged, piratebay copy of today’s latest blockbuster.
Further evidence can be seen in the widespread migration of betting firms onto mobile platforms (see PPB’s update, covered in our morning email).

Ongoing changes irreversible…

What if:
- Consumer spend is not slowing, it is just changing.
- These trends will only become more pronounced — the gap in tech-smarts between today’s children and young adults is just as big, if not bigger than the gulf in preceding generations.
- Incumbents must evolve or perish. Quality operators cannot rely on reputation alone.