For fashion retail, 2020 was a difficult year: many had to change business processes at lightning speed, revise digital strategies, and look for new sales channels. Have customer expectations and preferences changed over this period? Although we are at the midway point of 2021, let’s look back, analyze the fashion e-commerce market and outline the main trends in the fashion retail market, which we may observe during H2 2021.
Fashion eCommerce: Market Analysis
Fashion is considered the largest B2C eCommerce market segment. According to the report presented by CommonThread, the market is estimated to reach $759.5 billion in 2021. Despite the COVID-19 situation, it is anticipated to rise at a compound annual growth rate (CAGR) of 11.4%. By the end of 2025, this market is expected to exceed $1 trillion.
Source: CommonThread, 2021
By 2024, substantial growth will be seen for eCommerce, apparel and footwear segments – 60.3%, 45.6%, 34.3%, accordingly. By the end of 2021, online channel share is expected to amount to 22% of the fashion market sales worldwide, whilst the eCommerce penetration rate in the fashion industry is expected to hit 50%.
Main Fashion Retail Trends That Will Remain in H2 2021
In early December, The Business of Fashion and consulting agency McKinsey & Company presented a detailed report on the results of 2020 and the upcoming difficulties of the new year. We have analyzed changes in the global economy, consumer behaviour and the fashion system and interpreted them into some main trends that will remain relevant for the fashion retail market in H2 2021.
Online ordering takes the lead.
In 2020, the pandemic set the trend for online shopping. Many brands have gone online as a result of quarantine measures, and enthusiasts are introducing digital innovations. This trend sets the strategy for the development of companies in the market: 71% of retailers expect their online business to grow by 20% or more in 2021. In these conditions, brands strive not only to create convenient online shopping platforms but also to acquire competitive advantages: they create live broadcasts with a demonstration of goods and develop social networks.
A non-standard approach to the presentation of positions is encouraged.
Today, the fashion retail market can be called quite capacious: there are both “oldies” of the industry and new brands fighting for the attention of the end consumer. In this regard, innovative product presentation is of particular importance. In short, any non-standard and creative way of presenting the goods is welcome. For example, our find for the middle price segment is an online meeting with stylists. They demonstrate models and their advantages but, in practice, show possible combinations with other items from the wardrobe. This is more interesting and informative than just showing a thing on a model.
Considering a new way of life.
After the quarantine measures were lifted, many companies switched to a hybrid form of work. In this regard, a new segment of clothing appears at the intersection of home and office. Many brands have already reacted to this trend. For example, some jewellery companies have started making cuts that look great on Zoom. I think this trend will stay with us for a long time. In this regard, designers will need to develop collections that will be not only visually attractive and appropriate for business meetings but also as comfortable as possible.
Shoppers today don’t want to spend a lot of time looking for clothes. It is much easier to find your brand and update certain wardrobe positions as needed. In this regard, multilevel loyalty systems are being developed, and personalization algorithms are being improved based on the purchase history, physical parameters, and financial capabilities. Soon, personalization algorithms will help customers create complete images for a specific task. For example, choose a basic business wardrobe for a woman based on her parameters and a full-length photo.
If just a couple of years ago, the company’s eco-friendly slogans could be called nothing more than a PR move, today it turns out to be a deliberate decision in the struggle for a buyer. Globally, 25% of collections remain unsold.
According to GreenMatch research, 72% of consumers aged 15-20 consciously choose eco-brands and are willing to pay extra for organically produced goods. In addition, they express a negative attitude towards brands whose production does not correspond to the concept of “green”.
The ability to recycle unwanted clothing is more important to consumers today. This is a great chance to get a discount and buy something new from a brand with a closed product cycle and a brand to gain loyalty by changing its DNA and reaching a new audience.
However, sustainable fashion involves not only the use of organic materials and recycling but also the so-called “slow fashion”. It becomes more important for the buyer to buy one good item for several seasons than to buy many low-quality items for several exits.
We are witnessing an exciting time when technologies are being introduced more and more quickly, more processes are moving to digital, and most importantly, users are ready to adapt to new technologies faster. The fashion retail market is not the exception. In 2020, we saw a strengthening trend, and in the next few years, it is logical to expect a wave of new fashion e-commerce. If you need research of market size, trends, market leaders or main competitors in fashion retail and not only, we are here to help. Contact us, and let’s do research.
Your AIDA Research Team