Everyone loves Julia Roberts in “Pretty Woman”, and one of the most memorable scenes is where she is snubbed by a saleswoman while trying to buy a dress at a fancy store on Rodeo Drive. Rodeo Drive in Beverly Hills has long cultivated an aura of luxury and elegance, home to such stores as Dior, Prada and Cartier. However, all that might change if Eric Schiffer, CEO of 99 Cents Only Stores, is successful in opening a store on Rodeo Drive.
The 99 Cents Only chain has been a business success story during the US downturn. Their best performing store, right outside Beverly Hills, made $12MM in sales last year, compared to average store sales of $5.2MM. The success of that store is due (in part) to Beverly Hills residents driving there to pick up bargains! During the recession, consumer affinity for the dollar channel has increased, with new consumers surprised at the national brand offerings and the dramatically improved in-store experience. The chain has seen a trend of wealthier consumers either coming into the store for the first time or coming more frequently.
This seemingly new shopper behavior that was highlighted by the sluggish economy reveals an important insight — that shopping is about mind-set and we are not comprised of just one mind. There is oftentimes a discount diva inside a wealthy shopper; and, likewise, someone on a tighter budget still has a taste for fine things and finds a way to budget to have them.
So, will the opening of a 99 Cents Only store help drive traffic on Rodeo Drive or degrade the brand value of the other stores on the street? Recent successful openings in West Hollywood and on Santa Barbara’s State Street suggest the former, yet planning commission heads think the store is best located elsewhere in Beverly Hills. It remains to be seen whether or not Schiffer will be successful in piercing the veil of luxury on Rodeo Drive and opening his store. However, if the economy continues to struggle, a mixture of high-price, high-concept retail with more accessible options might be just the trick to drive traffic and keep a mix of consumers shopping and buying!