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Growth Slows in Key Fashion Categories
Business driven by millennials, athleisure styles and e-commerce resulted in $215 billion in U.S. apparel sales in 2017, according to market-research firm The NPD Group.
The buying power of millennials, or those born between 1982 and 2004; skyrocketing e-commerce sales; and the continued cool of athleisure were bright spots for the fashion business in the past year. However, Marshal Cohen, NPD’s chief industry adviser, said it wasn’t enough to stop a dip in U.S. apparel sales in 2017, which were down 2 percent from 2016.
“The apparel industry is being challenged to respond to the latest changes being driven by the broader consumer and retail environment,” Cohen said. “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.”
Last year, business driven by millennials grew at a 4 percent rate. It represented $2 billion in incremental sales. In previous years, business from this generation grew at double-digit increases. However, millennials and Gen Xers, or those born from 1961 to 1981, demonstrated increases in spending in the last year. Baby boomers and Generation Z, the group born after the millennials, showed declines in spending.
Athleisure made up 22 percent of total industry sales. In 2017, athleisure sales climbed 2 percent to $48 billion. But the category’s growth was not as robust as it has been in past years, according to The NPD Group.
While physical stores compose more than three-quarters of total industry sales, e-commerce continues to gain market share. In 2017, online apparel sales grew just 4 percent over the previous year. But in the past two years, the category experienced double-digit growth.
“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 noted. “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.”
