In the dynamic world of fashion retail, staying ahead of trends and consumer behaviors is essential for success. As we embark on the journey through 2024 and beyond, the apparel, footwear, and accessories category continues to show promising growth prospects. However, amidst this growth, challenges and opportunities abound, requiring a keen understanding of consumer preferences and market dynamics.
The latest research from Emarketer delves deep into the evolving path to purchase for fashion consumers, shedding light on the pivotal role of physical stores and digital channels.
Apparel, footwear and accessories will continue to be popular
In 2024, U.S. apparel, footwear, and accessories retail sales are projected to soar to $616.37 billion, marking a notable year-over-year growth of 3.9%. This growth outpaces the overall US retail sales growth of 2.8%, indicating a healthy margin of success. Looking ahead to 2025, this category is poised to become the second-fastest-growing in U.S. retail, boasting a 5.3% year-over-year increase according to our forecasts.
The digital realm is becoming increasingly pivotal for this mature category, with online sales growth aligning closely with overall retail ecommerce. Apparel, footwear, and accessories stand as the largest category in ecommerce, raking in $234.77 billion in sales, accounting for nearly 20% of total US retail ecommerce sales. By 2024, ecommerce is expected to command a 38.1% share of the category’s retail sales, with growth rates surpassing overall ecommerce trends before stabilizing in line with the average throughout our forecast period.
As we look further into the future, ecommerce is set to dominate, with more than half of apparel sales projected to occur online by 2027. This shift is driven by the rising popularity of online clothing purchases, propelling the category’s digital growth. Apparel ecommerce penetration is expected to surge to 54.4% by the end of our forecast period, with footwear and accessories also experiencing modest gains.
In terms of product segments, menswear is carving out a larger slice of the apparel pie, outpacing overall apparel sales growth. This growth trajectory is anticipated to continue through 2028, with menswear eclipsing other segments in ecommerce growth by more than 8 percentage points. Conversely, kidswear is expected to experience slower growth due to declining birth rates and an inclination towards adult apparel among younger demographics.
Amidst this landscape of growth, individual brands and retailers face heightened uncertainty in the fiercely competitive fashion industry. Market share is increasingly concentrated among dominant players, spanning from luxury conglomerates to budget-friendly online retailers. Additionally, consumer shopping behaviors are evolving, with more in-store traffic gravitating towards value-oriented channels like off-price and secondhand stores. To thrive in this environment, fashion brands must prioritize building a robust marketing presence across channels where consumers are most likely to engage, ensuring their relevance and longevity in the market.
How marketers and CMOs can take advantage of the market
Below are some key takeaways tailored specifically for retail marketers and CMOs.
1. Understanding the Path to Purchase
- Physical stores remain paramount for fashion discovery, with nearly 40% of clothing buyers discovering new brands or products through in-store browsing.
- Brand websites and apps are significant influencers, underscoring the importance of an integrated omnichannel approach.
- Discounts and price competitiveness continue to drive purchase decisions, highlighting the need for strategic pricing strategies.
2. Embracing Digital Transformation
- Online retailers, led by giants like Amazon, are driving new purchases across generations, signaling the increasing importance of ecommerce in fashion retail.
- Ecommerce penetration is on the rise, particularly in apparel, paving the way for innovative digital marketing initiatives.
- Gen Z and millennials are leading the charge in online fashion shopping, emphasizing the importance of targeted digital strategies for these demographics.
3. Balancing Brick-and-Mortar with Digital Strategies
- Physical stores offer unparalleled opportunities for brand discovery and engagement, but digital channels play a complementary role, especially among younger consumers.
- Brands should leverage the power of physical retail experiences while investing in personalized digital marketing to drive engagement and conversions.
4. Maximizing Brand Impact
- Differentiated value propositions beyond price, such as quality, design innovation, and sustainability, are key to standing out in a competitive market.
- Brand marketing should prioritize upper-funnel initiatives that enhance visibility and cultural relevance, leveraging partnerships with influencers and cultural icons.
5. Leveraging Retail Partnerships and Emerging Channels
- Third-party online retailers serve as crucial platforms for reaching fashion consumers, necessitating strategic partnerships and retail media investments.
- Emerging channels like connected TV (CTV) advertising present unique opportunities to engage millennials and drive brand discovery.
6. Meeting Consumer Expectations
- Understanding consumer preferences, particularly among younger demographics, is essential for crafting tailored marketing strategies that resonate.
- Authenticity and relatability are key drivers of engagement, with endorsements by influencers and creators playing a significant role in influencing purchase decisions.
Don’t forget the importance of identification
As eCommerce and retailers continue to capitalize on customer hunger for new products, don’t forget that 95% of your web traffic is unidentified. With an identity resolution solution like Wunderkind, we can help you identify more of your website traffic and help you retarget that traffic, increasing your revenue and growing relationships with your customers. Learn more about identity resolution in our latest ebook, Demystifying the Value of Identity in Performance Marketing.