Digital-focused fashion brands set to profit the most in 2022
Who stands to benefit the most from post-pandemic revenge spending? We take a look at why digital-focused fashion brands should prevail.
Like many industries, growth in the street fashion sector has stalled at 4.1% over the past 5 years as the pandemic, travel restrictions and store closures have hurt overall apparel spending (and putting the physical street in danger)!
However, with “revenge spending” post-pandemic, travel back on the cards and hospitality reopening, the sector rebounded with 34.3% growth in 21/22, leading to a market valuation of £36.5 billion.
But which brands are doing best in this return to the old normal?
How many fashion buyers shop online?
Not surprisingly, the percentage of shoppers looking exclusively online or in-store for their fashion purchases varies across age groups.
While the number of those who shop exclusively for fashion online remains relatively stable across all age groups, varying between 25-35%, the number of those who only want to spend in-store increases with age. . Only 14% of 16-25 year olds will exclusively buy clothes in-store (of which 61% buy both online and in-store), although this figure is steadily rising to 33% at 65+, with a further 34% buying the two. Online and in-store. While brands can expect online customers of all ages, those that cater to older age groups must be able to advertise effectively through non-digital means or risk losing up to a third of their clientele.
Of these online customers, 60% of transactions were made via mobile rather than desktopwhich means a fast mobile site is key to driving conversions.
Downward pressure on prices
For high street fashion retailers, downward pressures on prices and the race to offer the best value are challenging profit margins and meeting rising expectations for sustainability.
As fashion becomes increasingly digital, online-only fast fashion retail has created challenging operating conditions. Online retailers such as Pretty Little Thing, ASOS and BooHoo have long had a digital approach to their overall strategy, helping them easily commandeer large organic voice shares for the entire fashion industry, among higher retailers upscale such as Marks and Spencer’s, John Lewis and House of Fraser.
Source: Pi Datametrics, via Statista
With no physical retail spaces, they weren’t impacted by the store closure aspect of the lockdown and weren’t forced to maintain overhead for physical locations that weren’t actively generating of profits. This helps digital-centric brands deliver compelling offers, extensive product lines, and a convenient shopping experience. With Pretty Little Thing, ASOS and Boohoo each offering a delivery service “first class” (next day delivery for a full year at a cost of around £10) they are able to attract customers by being both affordable and convenient.
Men’s fashion has the highest growth potential
Although womenswear remains the highest revenue driver in the mainstream fashion industry, accounting for £11.5bn of annual clothing spend and 50% of the entire sector, menswear represents the sector’s highest growth category with revenues expected to grow by 8.4% to generate £2.9 billion in sales in 2022, particularly in casualwear, which accounts for 44.4% of men’s clothing products.
Source: IBISWorld, UK online menswear retail/IPA Insight Centre, December 2021
Additionally, ONS research suggests that men are more likely to shop exclusively online, highlighting the need for brands to have a strong digital strategy in order to be a key player in this space. Although far from being a new emerging sub-category, menswear brands should put themselves in a prime position to compete with their rivals in the space in this period of rapid growth, and should invest in a digital strategy to ensure strong visibility.
Alternatively, brands that serve both men and women and have traditionally focused on their womenswear lines could consider increasing or reallocating some of the budget to high-yielding menswear campaigns. they are currently leading, ensuring they can stay ahead of the curve in this growth. sector.
Looking for more information on the current state of mainstream fashion brands? Contact us for your free copy of our High Street Fashion industry insight report.
How Indian Fashion Brands D2C Seize The $ 43 Billion Opportunity