- Industry-wide data
Although the world economy is starting to improve, there was a global decline in the fashion industry, specifically with e-commerce, losing over $40 billion in revenue between 2019 and 2020. The CAGR was greatly negative, mostly because of the pandemic. Recovery, however, is thought to be on the way, but it will take until 2023 to see this arise.
Fashion retail sales, for the year 2020, represented nearly 30% of all e-commerce fashion-related sales. There are many that predict that this will increase to $100 billion by 2021.
5 Opportunities to consider regarding growth in this industry:
- Global markets that are continually expanding
- Online access increasing, especially in the West
- The middle class getting more access to disposable income
- Technology that makes e-commerce easier than ever before
- The influence of those online, including celebrities, that use their popularity to improve these markets
There are also threats to consider:
- Many of the most popular brand names are becoming fragmented
- Online returns are increasing significantly
- New styles are always in demand
- Pressure from those that only purchase green products not wanting to buy anything else
- There are ways to deal with these problems which will be discussed later on.
- Let’s now look at how these numbers are represented in sub-verticals.
- The COVID impact
The pandemic has actually made it problematic for the fashion industry in regard to e-commerce predictions. Over 26% of consumers in the United States stated that they were going to not spend as much on these products.
Although this was a correct statistic, retailers that are online have seen massive increases in the amount of money they are able to produce. Online sales for products have seen a growth of well over 30% in 2020. In the UK, a nearly 50% increase has been seen in fashion brands during the same period of time.
Fashion retailers really have not had to adjust their marketing plans because of the pandemic due to these numbers.
Athleisure continues to be very popular. The market value has increased from just over 150 billion dollars in revenue to a much higher level. In fact, CAGR for this industry, over the next five or six years, will reach levels of closer to $250 billion.
Athleisure is the US was also a very popular product, especially since many of the stores that people would frequent, as well as workplaces, were shut down.
But what happened? What was seen is that athleisure was a very strong product, especially from companies like Nike, that’s on massive growth despite the pandemic.
- Clothing and apparel
Selling, as well as fulfilling orders, was much easier because of lower digital barriers which affected the global marketplace. On a worldwide basis, this market is going to continue to grow when looking at ARPU statistics.
Most people in Europe spend about $1000 on fashionable items throughout the year.
Clothing numbers are continuing to climb, yet despite this, the compound annual growth rate is starting to slow down: it has diminished by nearly 8% over the last few years. CAGR for e-commerce has shown a diminishing change in this market of just over 3% looking all the way out to 2024 which is not a good sign for anyone in this industry.
Saturation in the Western market seems to be why this trend is perpetuating and seems to have no end in sight. These growth rates, especially with looking out the countries of China, Europe, and also the United States, seemed to paint a picture that is extremely bleak and dark. If you would like to know more about a slim thick body then see here.
For example, during the years 2017 and 2022, CAGR stats are as follows:
- 8.8% in the US
- 14.1% in China
- 8.7% in Europe
- Shoe segment
It is worth noting that another industry related to fashion, the shoe industry, has seen a rise in this industry. On a global scale, footwear continues to be extremely popular and will see a rise of nearly $200 billion in sales over the next five years.
