Last year, at least 1,000 retailers shut down their business. This year, wwd.com reported that just under 10,000 or up to 53% of the of companies closed down because of the 2008 Great Recession. Rising globalization, digital innovation, as well as changes in the spending habit of consumers has propelled the fashion industry into the middle of a seismic shift. To find out where the fashion industry stands today and where it is heading in the future, we will take a closer look at:
The statistics, strategies and trends that can shape the e-commerce of the fashion industry, the clothing and apparel, industry-wide data, jewelry and accessories, personalization, technological innovations, Shoe Segment, and many more.
According to cumulative data gathered within the fashion and clothing industry, the industry’s worldwide revenue is expected to hit $712.9 billion by 2022 from $481.2 billion in 2018. What drives the growth in the sector are the expansion of the global market outside the western world, the increase in online access and smartphone use, the emergence of worldwide middle-class individuals with disposable income, the rise of innovative technologies that create innovative e-commerce, and the opportunities presented by e-commerce in the fashion industry.
The fashion consumers also have more buying powers, since the potential customers are projected to reach at least 1 billion by the year 2020. The good news for the fashion industry is that almost all of the new customers and consumers are within the age ranging 16 to 34 years old. Since these consumers are going to visit a fashion news website, clothing line sites, and even a modeling agency website to see what’s new in the fashion world, manufacturers and sellers are going to benefit from this rise. Everything that is connected with the fashion industry will gain something from it.
The biggest threats established brands will be facing include:
- The demise of brand loyalty due to market saturation and fragmentation.
- Combating the return rate will cost at least 50% of the brand’s sales.
- Fashion’s ability to manufacture trends on-demand quickly.
- The increased pressure from the paying public or the consumer to use green manufactured and ethically sourced materials.
Apparel and clothing
The lower barrier to join for clothing manufacturers and sellers offer a significant opportunity to sell, fulfil orders, and market automatically and globally. Because of these, revenue per user and the worldwide revenue are both projected to increase.
The western market saturation is one of the sources of this fashion trend. When the growth rates of the United States, Europe, and China are compared, the reality becomes even more apparent. Between the year 2017 to 2022, the compound annual growth rate is expected to settle between 8.8% in the United States, 8.7$ in Europe, and 14.1% in China.
As a segment of fashion e-commerce, shoes, shows the same pattern of expansion year with shrinking revenues. From double-digit revenues in 2017-2019 (13.6% and 10.8%, respectively) the shoe industry is expected to grow 6.6% in 2022. The shoe industry will experience an increase in sales from $96 billion to $135 billion (2018-2022).
Bags and accessories
Not surprisingly, the accessories and bags department are still going strong despite the projected double-digit dive into the single digits by the year 2022. From a 16.4% growth rate in 2017, it will be expected to dip in single digits (8.7%) by the end of 2022. These projections make bags as well as accessories one of the healthiest segments of fashion e-commerce, despite having the lowest number of sales.
Luxury and jewelry
The worldwide jewelry market is snowballing at 5% to 6% annual growth. China tops when it comes to spending on luxury items and jewelry, followed closely by the United States ($2.7 billion). The Jewelry industry stems mostly on wholesalers, directly selling to the customers and consumers pressuring the jewelry manufacturers to be more straightforward about their pricing.
Not only that, the jewelry industry is expected to be dominated by major global brands by 2022, stealing market sales from local artisans and small business owners. While e-commerce is presently comprised at least 4% to 5% of the total jewelry sales, the numbers are expected to rise by 2022 towards 10% to 15%.
That is almost doubled or tripled the current growth rate. Studies indicate that the best way for mono-brand retailers is to use an e-commerce multi-strategy or an Omni-channel approach when doing retail. Multi-brand shops can win the market shares by organizing jewelry collections for certain segments, a strategy that works perfectly for apparel and cloth retailers as well.
The increase in wealth among the people in Asia-Pacific as well as in the Middle East are helping increase the average revenue growth of luxury items and jewelry for $313 billion by the end of 2020. Despite the slow increase of sales growth at 3.4% annually, it is projected to double or triple in sales by the next decade.
One of the biggest threats in the luxury items and jewelry industry is the affordable market. Should the sector offer items at multiple prices to grow their overall market? Or, will affordable market erode or dilute the high-end market, discouraging a lot of consumers to buy luxury items because the items they are buying is not so “luxury” anymore?
If you want to see the statistics on jewelry market growth in the United States, you can read it here.
According to Nosto’s data presented at a recent webinar on “Growing Your Online Funnel”, personalization is one of the leading factors in e-commerce in general.
More or less 40% of the sales are influenced by promotions or personalized recommendations.
At least 70% of customers prefer to personalize brand offering, experience, and messaging.
At least 90% of the companies view personalization as an essential factor in their present and future success.
By following the behavior of the users using a session-by-session or using the account, sellers can create a personalization, just like what Netflix is doing, into their website experience. Although you may start with products that are recommended, correct customization extends to the very basic and are used to present the seller or manufacturers’ products.
In the future, consumers will start to expect some personalization in the e-commerce fashion business. For example, consumers who visited the seller’s website, that browsed or bought certain clothes recently, should experience a quality experience catered to that history. Situational targeting is based on the data points of the user like the location and the weather. It is being promoted by experts as a way to solve the erosion of cookie tracking.