It’s no secret that the COVID-19 pandemic has changed the face of apparel retail in a myriad of ways. As 2020 draws to a close, many retailers are wondering what to expect moving forward. What will happen to the apparel industry in 2021? Which COVID-induced changes will stick? And what will it take to succeed?
A 2021 outlook report from Moody’s Investors Service aims to answer many of these questions. The bottom line is, the apparel industry is going to make a comeback, but it won’t all be smooth sailing. Trends in apparel and accessories continue to point to a recovery. Tiffany & Co. released positive preliminary August and September results last week, with preliminary net sales down slightly QTD, as the US sequentially improved and mainland China remained strong.
COVID-19 Changed the Face of Retail
COVID-19 affected the apparel industry in many ways this year. As consumers stayed at home for months on end, casualization became more popular, with sales of work and formal attire declining as customers chose yoga pants and athleisure wear instead. Online sales also soared in popularity: on average, people are spending 10 to 30 percent more online. Healthy living started to trend, too.
See Also
3-Year CAGR Definition | Law InsiderFast Fashion Market Size, Share [2022-2028] | Global Industry Future Growth, Market Dynamics, Trends, Drivers, Challenges, Restraints, Key Players, Recent Developments and Revenue Analysis | Industry Research BizCAGR Calculator - What is CAGR, How to Calculate CAGR, Compound Annual Growth Rate Calculator OnlineProfitability Ratio: Definition, Types, Formula, ExampleAll these changes had a negative impact on the apparel industry, with industry profit sinking 50 to 60 percent in 2020. The year is now drawing to a close, but the pandemic isn’t over. What can retailers expect to happen next?
Changing Apparel Trends
According to the Moody’s report, the trends we saw this year will continue in 2021. And companies that can adapt to these changes by expanding their merchandise selection will prosper. The apparel industry’s profit is expected to grow 70 to 90 percent in 2021, especially during the second half of the year. The apparel industry is poised for a comeback—but there will still be risks.
The pandemic brought about a lot of economic uncertainty. With millions of Americans and Canadians out of work, many consumers simply don’t have the disposable income to spend on clothes. Retailers need to be committed for the long haul, as this issue might not be an easy fix.
It’s essential for apparel retailers to tweak both their product selection and their sales channels to align with the “new normal.” They also need to be mindful of issues such as sustainability and ethics, which are becoming more and more important to consumers.
Succeed in 2021 and Beyond
To succeed in 2021, apparel retailers need to be agile and flexible, keeping an eye on the state of the market and evolving with changes in consumer behaviour. Moody’s also reported that omnichannel services that have become popular during the pandemic—such as curbside pickup—will continue to be valuable in the future. Retailers can succeed by doubling down on efforts to make these services as streamlined as possible.
Digital acceleration is also picking up speed. Online sales as a percentage of total retail sales are expected to exceed 25 percent over the next five years. Investing in the automation of product data and EDI is a smart decision to help prepare for this change.
The COVID-19 pandemic has changed the apparel industry in numerous ways. With many of these changes likely to outlast the virus, smart retailers will adjust their strategies now to be prepared. Looking forward, our base case is cautiously optimistic, with the virus more effectively controlled over the coming year, thanks to a strong public health response.
Find out how you can tackle your supply chain integration challenges by speaking with one of our experts at InterTrade. Test our supply chain integration or EDI software demo today.
FAQs
Global apparel market size growth: 2018–2024
The latest global apparel industry statistics show that revenue from the apparel market is expected to hit $1.79 trillion in 2024, a 3.47% year-over-year increase from 2023's $1.73 trillion. This marks significant growth over the past six years.
What is the growth rate of apparel ecommerce? ›
According to Statista, the ecommerce fashion industry's compound annual growth rate (CAGR) is tipped to grow 14.2% between 2017 and 2025, with the industry hitting a $1 trillion valuation by 2024. Sales of apparel, footwear, and accessories continue to rise, hitting $204.9 billion in the US alone.
How much money is in the clothing industry? ›
Fashion is a highly competitive industry, currently worth over 1.7 trillion dollars.
How big is the clothing retail market? ›
According to Zion Market Research, the global fashion retail market size was valued at approximately USD 91.25 billion in 2023. Experts predict that it will reach around USD 157.88 billion by 2032, with a compound annual growth rate (CAGR) of about 7.09% during the period from 2024 to 2032.
What is the problem with the apparel industry? ›
... Besides, inflexible labour markets and competition from emerging garment procedures have made the apparel industry face major issues that need urgent attention for survival in the global market. Those issues are insufficient product diversification is one of the problems in the industry [Dheerasinghe, 2015] .
What is the apparel outlook for 2024? ›
In 2024, global sales of apparel and footwear are set to experience moderate growth of approximately 2% in constant terms, and expected to recover to pre-pandemic levels by late 2025/early 2026.
What is the economic outlook for apparel? ›
In terms of per capita revenue, the Apparel market is predicted to generate US$230.90 per person in 2024, considering Worldwidewide population. Looking ahead to 2028, the volume in the Apparel market is projected to reach 196.1bn pieces. Additionally, there is an expected volume growth of 1.3% in 2025.
Is demand for clothing increasing? ›
By 2028, the volume in the Apparel market is expected to reach 32.2bn pieces. Additionally, the market is expected to show a volume growth of 1.5% in 2025. The average volume per person in the Apparel market is projected to be 89.0pieces in 2024.
Which age group buys the most clothes? ›
At least 82 percent of shoppers worldwide between 26 and 35 years old had purchased fashion online in the previous 12 months, according to an August 2022 survey. This was the age range showing the highest fashion e-commerce usage rate.
What type of clothing sells the most? ›
10 Best Selling Fashion Products in the US
- Boiler suits:
- Jeans:
- Denim jackets:
- Bucket hats/beanie:
- Sneakers:
- Wrap dress:
- Hair accessories:
- Trench coats:
Apparel Market Analysis
The Apparel Market size is estimated at USD 1.36 trillion in 2024, and is expected to reach USD 1.78 trillion by 2029, growing at a CAGR of 4.63% during the forecast period (2024-2029). In the apparel market, growth is expected to be aided by increased online shopping.
What is the most successful clothing brand? ›
1. Nike – United States ($31.3 Billion USD) Fun Fact: Nike's famous “swoosh” logo was designed by a graphic design student for just $35 in 1971!
Is the clothing industry growing? ›
Revenue in the Fashion Market is projected to reach US$770.90bn in 2024. Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.94%, resulting in a projected market volume of US$1,183.00bn by 2029.
Who is the largest online clothing retailer? ›
Walmart.com is leading the fashion e-commerce market in the U.S. in 2023, with e-commerce net sales of 11 million U.S. dollars generated in the country. Walmart was followed by amazon.com with 8.9 million, and third place is taken by shein.com with net sales of 8.1 million U.S. dollars.
What is the largest clothing retailer? ›
Inditex had the highest sales among the selected major apparel retailers and manufacturers, with revenues of approximately 34.5 billion U.S. dollars in fiscal year 2022. Hennes and Mauritz (H&M), and Fast Retailing were ranked second and third, respectively.
Is the fashion industry still growing? ›
Revenue in the Fashion Market is projected to reach US$770.90bn in 2024. Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.94%, resulting in a projected market volume of US$1,183.00bn by 2029.
Is there a future in the fashion industry? ›
According to McKinsey's analysis of fashion forecasts, the global industry will post top-line growth of 2 to 4 percent in 2024 (exhibit), with regional and country-level variations. Once again, the luxury segment is expected to generate the biggest share of economic profit.
Is fast fashion declining? ›
Factors such as rising production costs, stricter environmental regulations, and changes in consumer preferences are making fast fashion less profitable. This article will explore in detail the challenges the industry faces and possible solutions.
