Last year, more than 1,875 fashion retailers shut down. This year, projections reported by WWD place the number at just under 10,000, “up 53 percent from the number of doors that went dark amidst the Great Recession in 2008.”
Digital innovation, rising globalization, and changes in consumer spending habits have catapulted the fashion industry into the midst of seismic shifts. To explore where we are and where we’re heading, this article takes a detailed look at … the statistics, trends, and strategies shaping the e commerce fashion industry in 2019 and beyond:
- Industry-Wide Data
- Clothing and Apparel
- Anywhere Ecommerce
Cumulative data compiled within The Fashion and Apparel Industry Report paints a bright portrait with worldwide revenue expected to rise from $481.2 billion in 2018 to $712.9 billion by 2022:
Driving this growth are four notable opportunities:
- Expanding global markets outside the West
- Increasing online access and smartphone penetration
- Emerging worldwide middle-classes with disposable income
- Innovating technologies to create experiential ecommerce
Fashion consumers will also have more buying power, as the number of potential customers is projected to grow to more than 1.2 billion by 2020. The good news for fashion is that the majority of these new consumers are within the 16 to 24 and 25 to 34 age groups.
The biggest threats to established brands include the:
- Death of brand loyalty due to market fragmentation
- Cost of combating online return rates as high as 50%
- Fast fashion’s ability to create and release styles on-demand
- Pressure from consumers to use ethically sourced and green manufacturing materials
We’ll get into strategies to combat these issues later. For now, let’s examine how these big numbers play out in industry sub-verticals.
Clothing and Apparel
Lower digital barriers to entry for all clothing merchants offer the opportunity to market, sell, and fulfill orders globally and automatically. As a result, worldwide revenue and revenue per user (ARPU) are both projected to grow:
However, while clothing’s absolute numbers are steadily climbing, worldwide revenue growth — as represented by compound annual growth rate (CAGR) — is slowing: down from 15.3% in 2018 to 7.6% by 2022. Western-market saturation is the most likely source of this trend. When growth rates are compared between the US, Europe, and China, that reality becomes even starker.
Between 2017 and 2022, CAGR is expected to settle in at …
- 8.8% in the US
- 8.7% in Europe
- 14.1% in China
Anywhere E commerce
It goes without saying that social media has been a driving force in the fashion market. Unfortunately, most brands are plagued by a single sin. Andy Crestodina describes the situation perfectly: “Most branded content is advertising under a thin layer of information or entertainment. Scratch the paint, find an ad. It’s the brand putting itself first.”
Thankfully, fashion and social media are a match made in ecommerce heaven. Even when it comes to explicitly “branded” content, and especially on Instagram:
Particularly powerful on this front is mixing product-centric content, mainstream influencer marketing, and micro-influencers. As a model (pun intended), Fashion Nova excels on all three fronts.
With 10 million followers on Instagram, partnerships with celebrity accounts like Sarcasm Only, Cardi B, and Kylie Jenner, plus an army of over 3,000 micro-influencers, Fashion Nova pairs social-media dominance with a unique approach to fast fashion. CEO Richard Saghian’s claim that Fashion Nova is “the fastest-growing women’s apparel company” is no exaggeration.
And yet, the real power for social comes from integrating multi-channel ecommerce to create anywhere commerce. Beyond simply sharing or advertising on social, multi-channel ecommerce integrates native selling off-site to build direct buying paths in the places your audience spends their time. Shopping on Instagram, Facebook Shops, Buyable Pins, and more all take advantage of this strategy.
Just remember the words of Kevin Dao, co-founder and CEO/CCO at ORO LA: “In everything we do, we’re helping the customer imagine. We want them to imagine being the man in every picture. To imagine us being their stylist. To imagine, ‘That could be me wearing those clothes.’ We’re not so much curating content as curating imagination.”