2018 was not a good year for fashion retailers as more than 1,875 of them shut down. A report by Women’s Wear Daily (WWD) shows that they are less than 10,000 currently operating. There are a lot of shifts occurring within the fashion industry, and our article will take a look at the trends and statistics that are playing a significant role in the fashion industry.
Data from the Industry
The fashion and apparel industry is optimistic that the industry will achieve $712.9 billion by 2022. When you compare it to the 480.2 billion dollars the industry managed to generate in 2018, it is a substantive growth projection. The Apparel sector takes up to 65% of the market share. Footwear takes 25%, and bags and accessories 10%. According to the report, four significant areas have a lot of opportunities, and these include:
- Internet and smartphone penetration
- Access to Experiential e-commerce through the use of innovative technology
- The global markets outside the West that are continuing to expand
- An emerging middle class that has a significant amount of disposable income
The report further shows that there could be 1.2 billion consumers by 2020. The age target ranges from 16 to 24 and 25 to 34 years. Up to 65% of shoppers use their mobile accounts. The majority of shoppers will buy from Amazon, which is ironic if you consider the fact that the platform is not best known for selling fashion items.
There are however significant threats that some of the established pranks face including:
- Market fragmentation leading to the death of brand loyalty
- Online return rates as high as 50% that the merchants will have to combat
- The ability of the industry to create and release Style on demand
- Green manufacturing and ethically sourced material due to the pressure from consumers
· Clothing and Apparel Industry
There is considerable potential for the clothing industry. There are fewer digital barrier formations, thereby allowing you to sell, market, and fulfill the orders globally. Due to technology, there is high efficiency due to automation. Industry experts are optimistic that revenue growth will be on an upward trajectory. However, despite their optimism, there could be a drop in the compound annual growth rate (CAGR), which as of 2018, stood at 15.3% billion. The experts estimate that by 2022, it will be at 7.6%. The decline in numbers could be due to market saturation in the West. If you want to segment the numbers by region, the CAGR in the USA, Europe, and China will settle at 8.8%, 8.7%, and 14.1% respectively by 2022.
· Shoe Segment
The shoe segment is showing a worrying trend if the numbers are anything to go by. The revenue expansion seems to be reducing on a year-to-year basis. From 2017 to 2019, figures show that the numbers dropped from 13.6% to 10.8%, respectively. Industry experts place the growth rate at a mere 6.6% by 2022. There is, however, some good news with regard to market size. We can expect to see an increase from $96 billion to $135 million from 2018 to 2022
· Jewelry and Luxury Items
The jewelry sectors have shown an upward growth trajectory with a 5.6% annual growth. China is leading, closely followed by the US, which brings in $2.7 billion annually. The main threat for the segment is that wholesalers are starting to sell directly to customers who are now demanding more transparent pricing. Local artisans will face a lot of competition from major global brands by 2020. E-Commerce is responsible for about 5% of the total sales, but we expect to see a rise of up to 15% by 2020. Retailers must, therefore, embrace multi or omnichannel strategies to reach more consumers. There is also a need for curated collections that target specific segments to reach more customers.
The luxury item segment is doing well in the Middle East and Asia Pacific due to increasing affluence. However, with regards to growth, the rate is at best sluggish and may experience a mere 3.4% annual growth. Those operating within the industry may have to think about ways to generate more income. It could, for example, come from offering multiple price points to reach a broader market. The other option is to provide affordable luxury items, but this could, in the long run, erode the high-end luxury market. With affordable luxury items, those who have been purchasing the higher-end ones may question whether they are genuinely buying pure luxury or not.
· Bags and Accessories
The bags and accessories category maybe doing a bit better than the other groups. But there could still be a significant drop from the years 2018- 2022. Experts estimate that the decline could be from 15.6% to 8.7%.
· Cosmetic Industry
The emerging global markets provide the massive potential for the cosmetic industry. Experts estimate that by 2020, the industry will generate over $675 billion. The Beauty industry, as a whole, is currently worth approximately $532 billion. The use of social media and influences has been key to the growth of the sector.
The largest consumers fall within the ages of 18 to 34, and most will buy more than ten products annually. The e-commerce platform has been instrumental in the growth of the sector because of the use of technology that makes it easy for people to shop.
Augmented and virtual reality has eliminated the need for a customer actually to have to go and try out a product. By simply uploading a picture, the customers can test out different makeup, until they get the one they like.
The fashion industry is truly an exciting one to watch. Anyone who is operating in the sector has several opportunities that they can take advantage of. The social media platforms have given access to a broad customer base. You also have the opportunity to employ different marketing tactics so that you are always present within the consumer’s mind. With the right ecommerce platform, you also get access to multichannel sales Avenues for your business. You must, however, be careful about the threats and employ the right strategies to overcome them.
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