Millennials, athleisure, and e-commerce continue to be the brightest spots in the U.S. apparel industry, though they lost some of their intensity in 2017, according to The NPD Group. The firm reports this slowed momentum among the industry’s key sales drivers, combined with declines in other segments, resulted in $215 billion in U.S. apparel sales in 2017, a 2% decline in from 2016.
The athleisure movement and influence on fashion continue to drive growth:
- Sales of men’s and women’s activewear grew in 2017
- Women’s supplied much of the energy behind the category’s growth
- E-commerce remains a driving force
- Brick-and-mortar still represents more than 3/4 of annual industry dollars
“The apparel industry is being challenged to respond to the latest changes being driven by the broader consumer and retail environment, “says Marshal Cohen, chief industry advisor at The NPD Group, Inc. “The rapid pace of change in Millennial consumption is one major change that points back to the importance of evolving consumer segmentation. The future of the apparel business depends on manufacturers and retailers refocusing on the current needs of each critical consumer segment.”
Millennials, women’s activewear fuel growth
In 2017, Millennials had the highest apparel growth rate of all generations at 4%, representing $2 billion in incremental sales. However, even the growth among this powerhouse has slowed from the double-digit increases seen over the past two years. Despite the slower growth rate among both Millennials and Gen Xers, they were the only generations with increases in apparel dollar sales in 2017. Baby Boomers, who account for nearly 20% of annual apparel dollar sales, and Gen Z, who generated almost a third of total apparel dollar sales, both experienced declines in overall spend for the year, according to NPD.
The athleisure movement and influence on fashion also continue to be a primary driver of growth opportunity for the industry. Non-activewear sales declined while activewear apparel continued on its growth trajectory in 2017, although not making as steep a rise as in past years — dollar sales increased 2% to $48 billion, which amounts to 22% of total industry sales. Sales of both men’s and women’s activewear grew in 2017, but women’s supplied much of the energy behind the category’s growth, reaching $21.9 billion in sales with a 4% increase over 2016, reports NPD.
In-store sales outpace e-commerce
E-commerce also remains a driving force at retail as in-store apparel sales have declined, but brick-and-mortar still represents more than three-quarters of annual industry dollars. E-commerce has had a relatively slow progression in apparel compared to other industries, from 16% of sales in 2014 to 21% in 2017. In 2017, online apparel sales grew just 4% from the prior year, following double-digit growth in the prior two years.
“According to e-commerce insights from NPD’s Checkout, which is based on information collected from more than three million consumers through data provided by our partner Slice Intelligence, the purchase frequency of online apparel consumers increased in the last year, but they spent 5% less per receipt,” the firm states.
Categories like active apparel bottoms, undershirts, and swimwear — which indicate the consumer’s concentration on comfort, the staples, and niche products — are the few sources of consistent, long-term growth in today’s apparel market, Cohen says.
“Retail is changing, the consumer is changing, and every industry must understand where spending habits have moved, and adapt to the shifting market dynamics that are impacting their business,” he adds.