E-commerce sales and luxury sales are both experiencing strong year over year growth

MasterCard released their SpendingPulse macroeconomic report for July 2011, and the findings are a mixed bag for retailers. Luxury good sales are up 11.6% year over year, and e-commerce sales grew for the 24th straight month in every category except electronics. Combine that with the fact that many luxury brands have finally stopped fearing e-commerce, and it’s blue skies and sunshine for luxury good makers. Saks, who had to shutter some stores not so long ago, reports that same-store (stores open at least one year) revenue is up 15.6%, handily beating estimates of an 8.5% increase.

Then there’s Wal-Mart, whose same store traffic is down 2.6% year over year. Though they’ve attempted to up their style credibility, shoppers aren’t buying it and competitors like Target and traditional supermarkets are seeing foot traffic increase.

So what gives? Is the economy that far back on track that everyone’s trading up? Not exactly.

Surveys from Morgan Stanley and WSL Strategic retail found that shoppers actually don’t think Wal-Mart has the lowest prices anymore. Add to that, many are shopping less because they have less money to spend in the first place. {Bloomberg}

On the other side of the spending coin, luxury brands have been bumping up their prices on everything from 4-figure face creams to designer shoes and consumers are opening their wallets. Not at pre-recession levels, mind you, but enough to push sales up significantly for everyone from BMW and Mercedes Benz to Tiffany’s, LVMH and PPR (owner of Gucci and Yves Saint Laurent, whose luxury division recorded 23% sales growth). {NY Times}

Which makes it seem like the US retail sector is becoming a tale of two shoppers. In some ways, we hope that is the case, but aren’t sure that it is.

The recession happened for many reasons, but a significant one was consumers living beyond their means, spending money that they didn’t really have.  While we’d like to believe that all of the luxury sales are dormant affluent consumers reawakening their credit cards after gaining from the overall gains the stock market has made since it hit is recent lows, the reality is that “aspirational shoppers” have long sustained the mass luxury industry.

If those shoppers have been saving and are financially stable, we don’t see a problem with spending $1000 on one item rather than 10 or 20 less expensive items.

While there may be some careful saving and selection behind the jump in luxury sales though, another percentage stood out to us: 33. That’s how much MasterCard’s profit rose year over year. There are undoubtedly some affluent individuals driving the $608 billion in MasterCard/MaestroCard spending, but we’d be remiss to overlook the fact that we’re still largely talking about the spending of borrowed money.

We’re glad to see sales in any industry bounce back, but we’ll wait for more information on who’s leading the shopping recovery before getting too hopeful that it’s truly a sign of the economy getting back on the ball.

Fashion’s Night Out (not to be confused with Victoria, Canada’s fledgling fashion event) is celebrating its second birthday this fall and New York mayor Michael Bloomberg shared the final details of the much-anticipated event.

Last year’s event filled the streets with fashion lovers in nearly every neighborhood where there were events, and this year promises to be even bigger – and hopefully better for retailers who gave mixed reviews on the sales success. September 10th will bring together fashion retailers, celebrities and designers in a celebration of fashion and its importance on our communities and the global economy. Steve Sadove, CEO of Saks Fifth Ave noted at last year’s event, “We started to see a turn in the industry, sales started to stabilize,” he claimed.

If you’re planning to participate, get ready for specialty items offered by many stores who also plan to produce limited-edition merchandise for all FNO shoppers.

The best part of the whole evening is the interactive nature of the event. People shopping out in the streets, sharing, laughing and enjoying the perks of a good cause. Like Marc Jacobs said, “It felt like a block party… it felt like what shopping is all about, the social ritual.” {Stylelist}

We couldn’t agree more. Last year we snagged Carine Roitfeld at the end of Paris’ big night (which is on track for a similar luxury themed evening this year), this year we’ll bring you quick quotes and pictures from as many people as we can catch up with in New York. Let the block party begin!

“I doubt you’re going to see a lot of new stores opening on the full-line side,” said Stephen Sadove, Saks’ Chief Executive. “It’s going to be making the current stores more productive.”

Sadove was speaking about stores that would be closed, which include those that have a lease expiring and those that are losing money. {Wall Street Journal} There’s no specification of which category the Portland Saks stores, announced for closure this year, fall into. But considering both the stand alone men’s store and women’s store are getting the axe, it’s likely they’re in the latter.

Scaling back on extravagant spending is something all too common these days, with some even considering it chic. Online isn’t immune, as wealthy shoppers there turn to mid-market retailers like Macy’s and discounters like Gilt and Bluefly for designer purchases. Other luxury retailers like Neiman Marcus and Tiffany & Co. all saw declines this year in holiday sales, and struggle with clientele affected by the market.

A reflection of this subdued shopping mood is seen on the runways of some of the top designers who are using more basic colors and prints, {All Business} simpler silhouettes and the use of layering and interchangeable pieces to emphasize making the most of what you buy.

Advertising costs may also have something to do with company sales loss. Advertising pages are scarce among the most influential fashion magazines like Vogue, whose ad pages were down 36 percent last year, even though the magazine had a 6.3% increase in circulation during the first half of the year. With luxury fashion houses still so heavily reliant on magazine advertisements as their primary communication method, the decreased exposure there coupled with consumers severely tightening their purse strings make it clear that companies looking to regain momentum still have a long road ahead.

Spring/Summer 2010 Jewelry from Lanvin (L), Vera Wang (Center) and Dolce & Gabbana (R)

Whether you fancy long, bold necklaces or eye-catching rings, there is a statement piece with your name on it. Designers like Vera Wang, Lanvin and Dolce & Gabbana all sent their models down the catwalk with bold, yet beautiful and intricate, accessories for spring and the trend will continue for a few months. The clothes of FW2010 may have lost their rock chic edge in favor of minimalist silhouettes, but that can  offer the perfect backdrop to strong jewelry choices.

Fall/Winter 2010 statement jewelry from Vera Wang (L), Lanvin (Center) and Dolce & Gabbana (R)

The beauty of costume jewelry is that it’s an easy way to flaunt your fashion interests when you can’t do so with your clothes (hello, corporate uniform), or help transition an outfit from day to night. Here are 9 statement pieces that let your jewelry do the talking without leaving your wallet screaming.

1. Check Embossed Degrade Bangle {Burberry}
Burberry Prorsum
$195

2. Gold Armour Knuckle Ring {My Wardrobe}
Low Luv by Erin Wasson
$113.85

3. Multi Chain and Bead Necklace {Saks Fifth Avenue}
Kenneth Jay Lane
$175

4. Multi Chunky Crystal Necklace {Bloomingdale’s}
Aqua
$60

5. Blue Glass Ring {Max & Chloe}
Noir
$62

6. Mixed Chain and Pearl Bracelet {Arden B}
$19

7. Amethyst Cocktail Ring {My Wardrobe}
Kenneth Jay Lane
$123.75

8. Golden Shadow Swarovski Vitale Bracelet {Max & Chloe}
Janna Conner
$163

9. Ruby Dream Cocktail Ring {Max & Chloe}
Kenneth Jay Lane
$165

Want to know where the wealthy shop online in the UK? Visit Signature9 UK for a look at the UK shopping sites popular with high earners.

It’s impossible to break out apparel shoppers for department store sites (many of which also sell home and garden items), so it should be noted than not every visitor browsing macys.com is there for clothing, beauty or jewelry items. But even if half of the visitors are there for dresses instead of dishes, Macy’s is attracting one of the largest (and richest) online shopping audiences.

Our data is from Google’s Ad Planner, which only offers visitor and demographic information going back one year. We can’t say if the economy has played a role in shifting online shopping preferences, but presently, wealthy online shoppers aren’t visiting luxury destinations in the same volume as they visit e-commerce sites with mid-level pricing. A possible silver lining for sites specializing in luxury sales: while they may not get the same volume of traffic, it’s quite possible that high end e-commerce sites earn more per sale and visitor.

Of the top 20 apparel e-commerce sites attracting the largest number of wealthy online shoppers, 6 (30%) are sites specializing in discount sales. Gilt and Rue La La are neck and neck for the title of the invitation sale site with the wealthiest visitors. Allowing for a small sampling error, the two sites could even reach the same number of wealthy visitors. The advantage, however, goes to Gilt Groupe, who attracts a combined 1.2 million visitors across the main Gilt site, and recently launched sister (and brother) sites Gilt Fuse and Gilt Man. Combined, Gilt Groupe attracts more visitors earning $100,000 or more than any other online only e-commerce apparel site besides Zappos. Pretty impressive for a company that’s not even 3 years old.

When it comes to visitors earning $100k or more per year, invitation sale sites may not have as many visitors as department stores, but as a percentage of visitors, a sizable portion are in this desirable online shopper demographic.

Infographics may be copied or reproduced online with a live, followed link to this page. Please contact us for high-resolution images suitable for print.

More pictures of shoes from the H Williams Spring/Summer 2010 collection

We’re certainly surprised by the preview of the 60-piece line; rather than being a “Zac for less” or a “sister collection,” Z Spoke is meant to speak to a different consumer entirely and is comprised of breezy American sportswear basics in cheery, optimistic colors and prints, which would look right at home in the closet of a Lower East Side fashionista.

Read the full story {WWD}