- Revenue in the fashion segment is projected to show an annual growth rate (CAGR 2023-2027) of 9.99%, making the market volume reach around $1.45 trillion by 2027.
- Secondhand apparel is gradually becoming a global trend. By having grown by 24% in 2022 alone, it will exceed $218 billion in revenue by 2026.
- The average revenue per user (ARPU) is expected to reach $236.90.
- The level of user engagement is expected to reach 52.7% in 2023.
How have your sales changed in the last month? We hope that for the better. We keep writing about the trends of the eCommerce market in the United States, Britain, and Canada. In this review, you will find data from online sales statistics of your competitors and partners in the fashion segment.
Let's go back to the epigraph. The info at the beginning of the text suggests that electronic sales in the field of fashion (clothing, shoes, bags, accessories) are growing rapidly. This product category occupies a leading position in terms of annual revenue and the involvement of users in sales. In order not to be unfounded and to understand why it is like that, let's turn to statistics.
Looking back at the pre-covid times, in 2018, the revenue from online retail trade in clothing and accessories amounted to $102.8 billion, while in 2023, the forecasts tell us about a much higher figure, namely $548.6 billion.
Why? Let's consider the main reasons:
- over the past year, the level of customers' purchasing power has increased as well as the credence of the customers to the store owners;
Compare the percentage of offline and online purchases by the customers.
- most consumers who buy clothes and accessories are prone to emotional purchases because of the information boom and the era of Instagrammers, which “dictate” the canons of luxurious life.
Review of the fashion-goods market
At the moment, the category of fashion goods is one of the most significant segments in the field of global Internet sales. The turnover of the American market in this segment was estimated at $100-112 billion five years ago. According to Statista, the country's revenue in the apparel market can reach up to $343.70 billion in 2023. The local market is expected to grow by 1.96% annually.
In our previous research, we have chosen three countries that interest us, and we are going to analyse their markets. Let's turn to sales statistics in the United States, Britain, and Canada.
The market's largest segment is women's clothing and shoes, with a revenue share of $179.70 billion in 2023, most attributable to non-luxury goods. The US fashion market is increasing, and it's expected to maintain its leading position in the near future.
In the graph below, you can see the statistics that show product revenue growth and signal their popularity. The top 3 products include:
- clothing accessories;
We want to draw yoъur attention to the product category of sportswear. Since 2019, the sales curve has kept rising, steadily growing this market segment. It is expected to reach a revenue worth over $479 billion by 2025, and no solid factors can result in its decline any time soon.
In the post-covid times, people are trying to get back to an everyday, active life — hence the steady growth of the sportswear segment. This means you can actively sell this to others. Mind the seasonal changes in demand and you should be just fine.
Comparing the pre- and post-covid times once again, in 2018, the revenue in the clothing/footwear segment in the UK was $74,942 million. Now, in 2023, it is projected to reach around $56 billion.
In the statistics mentioned above, a large share of sales is taken by women's clothing. For 2018, the revenue from this segment was $32.723 million. Compared to the sales statistics in the US and Canada, in Britain, the ratio of the women's and men's clothing revenue is undoubtedly the highest. The sales of women's clothing products are growing every year, and this rate does not affect men's clothing.
According to revenue growth by 2020, the top 3 products will include:
- women's clothing.
In January 2023 alone, these three product types generated over $3.5 billion in revenue, making the fashion industry highly profitable in the UK. The country doesn't just import almost all of the world's famous brands but also has its own huge production and local clothing brands, and its potential is growing yearly.
After the covid outbreak, the revenue of the Canadian fashion sector keeps growing and is projected to reach at least $16 billion in 2023, with a user penetration level of 50.3%. The positive tendency can increase the revenue to $26 billion by 2027.
In Canada, online sales are huge for the fashion sector. Several local websites generate over 15% of the overall revenue, which will only keep growing.
If we consider the statistics of popular products in this segment, then by 2020 the top-3 most popular products in terms of revenue growth will include:
- women's clothing.
Here we want to draw your attention to the product category of clothing accessories. Sales growth in this segment is growing very slowly, but interest in it is stable, and products are in demand. Revenues are approximately $370.7 m. per year, but as we assume, this is because of the price range, which is much lower than on shoes or clothes.
Also, it is necessary to indicate the lowest interest of buyers in the sportswear product category, which brings the lowest percentage of revenue - $57.6 m.
The primary sources of traffic for any online store are direct organic traffic. The business itself does not have an immediate impact on them; therefore, it is much more important and interesting to look at those traffic sources that require direct, targeted efforts and costs from the business.
In these markets, the average share of traffic channels for online stores in the clothes/shoe category is:
From the table above we can conclude that the priority is still in contextual advertising, which solves several business problems at once.
Contextual advertising is the fastest way to attract the attention of the target audience to your product, as it is already looking for it. Your task is to describe all the features of the product in such a way that the potential buyer would pay his attention to your ad. This is a tool with the help of which you can remind the customers about your online store and motivate them to make a second purchase. Also, this tool contributes to the growth of both customer awareness of the brand and his trust in it.
The second priority is email marketing. This method of communication is designed to keep your customers’ attention, repeat purchases and increase audience loyalty.
The third priority is the channels of display-advertising, social networks, and video advertising. For effective sales and promotion of fashion-goods to the market, these channels are of high importance. The products that you sell and place in different sales and communication channels should be smartly demonstrated. Take time for a high-quality demonstration of your products and use the channels mentioned above.
Globally, the audience in the fashion segment is distributed between men and women in the ratio of 25/75. There may be other estimates of about 30/70 or 35/65. Anyway, if you deal with the fashion segment, then you are more likely to consider women as your audience. As of 2021, the largest segment of the fashion market was womenswear, so you might want to target that group for more effective sales.
Recent statistics confirm this statement. If we consider a female audience aged 25 to 44 years old, then it generates up to 55% of the income of online sales of fashion-goods, while the male audience in this age category brings only 15% of income.
Why do we have such a situation? Many experts refer to psychological characteristics and argue that women are more inclined to creative styles, emotional involvement, spontaneous shopping, etc. While men are more pragmatic and less prone to make emotional purchases.
However, it is much more critical for a business to know not why it happened but what to do with that.
First of all, when creating an online store and choosing promotion tools, keep in mind that the behavior of these audiences can be completely different. So, if you want to promote your project for both audiences, then you should create two isolated zones in your online store. They should provide a different user experience suitable for each of them. Alternatively, you’d better create a specialized project that will be aimed at only one target audience. We advise the partners to work out the target audience and its needs before building a visual concept for an online store. What for? Each of them has its own requirements, which influence the decision to buy a product.
Why do users prefer to shop in an online store?
The statistics of global online sales indicate that the number of users who prefer to buy clothes, shoes, accessories in the online store is steadily growing. However, why is this statistic growing? Why do users prefer to buy things without leaving home? Let's look at the statistics of the buyers’ feedback.
Thus, the leading indicators why customers buy goods online include: price, large selection of goods, the ability to quickly purchase a product and the availability of reviews. Pay attention to these indicators when starting your project.
What products are online shoppers looking for?
If we talk about search trends, then it is common for buyers from the United States, Britain, and Canada to start purchases not with the requests related to categories, but with requests for brand names. Before buying the sneakers, a user most often searches for goods not by the requests of the product’s name (i.e. sneakers), but by requests of the brand ( i.e. Adidas, Nike).
As you have got from the market statistics, each country has its own characteristics in each category due to different geography and lifestyle differences.
For example, for the US market, a gradual decrease in demand for official clothing style is typical. The most popular items of clothing in the search were women's leggings and sweatshirts, men's T-shirts and sleeveless jackets. As for footwear, sandals and loafers were more preferred.
Whereas in the UK and Canada there are no problems with the demand for official clothing. The demand for sportswear is growing in comparison with the United States, and dresses remain the most popular items in search systems.
Data is retrieved from ecommercedb.com
Competition in the fashion niche is quite high. The sellers of clothing and accessories are divided into several types:
- by products manufacturing: brands that sell original products and those who buy such items on trading floors;
- by a state of recognition (fame): promoted brands and startups that are just entering the market;
- by geography: international and local manufacturer.
Nevertheless, many new online stores start to operate in these categories, up to 2000 eCommerce projects are closed every year. Why does it happen? There are many reasons, and it is impossible to sum them up. One of the main reasons is the rapid change in the product life cycle. It is changing so quickly that the sellers do not have enough time to pack and sell their goods profitably. How to solve this problem? You should build a marketing strategy that includes the stages of pre-order, release of a new collection, end of the season, out-of-season sales.
Competitors review of: what to do that your online store brought high sales
If you want to run a business and stand out among your competitors successfully, you need to know how they run their business and what makes them successful. Check whether you apply all the tools that your competitors might use, i.e.:
- high quality of visual materials. It's not just about product photos, but also about video content. According to Google requests, up to 40% of the audience in the fashion segment visits the site after watching video content or advertising on YouTube;
- selling style, a generalized concept of what status the user buys along with the product;
- personalized recommendations - according to SalesForce, 52% of buyers in the fashion segment tend to refuse those brands that do not attempt to personalize their offers;
- the history of the brand, which positions it and separates from its competitors;
- regular work on the release of new products;
- convenient products filtering in size, color and product options;
- inviting customers to become members of a closed community;
- encouraging customers to distribute company content.
Top 5 Best Shopify Stores to look up to
To know where you are going, you need to know what your competitors are doing. So, in this regard, it is always better to look up to the best. Learn the concepts of these online stores and get the most useful ideas out of them.
- Argentwork argentwork.com
- The Candi factory thecandifactory.com
- Helmboots helmboots.com
- Taylorstitch taylorstitch.com
- Unconditional unconditionalarchive.com
Why do these and other successful brands choose Shopify?
- Easy-to-use and fault tolerance.
- Favorable tariff plans.
- Fast download online store.
- The ability to adjust your online store to the needs of the market.
- Advanced ecosystem.
- High level of security and data protection.
You can read about these and other features of the Shopify platform here.
The statistics show that the category of clothing/footwear in the near future will grow in all markets. We have just described the peculiarities of the development of this niche in the USA, UK and Canada markets. If you are running a business, we advise you to study these statistics and analyze your sales. You will probably find some reasons for changes in trends or new horizons, where you should go.
Also, we advise you to consider a few tips which our customers usually take.
- Personalize your communication with your customers, user experience on the site, recommendations as well as after-sales service. It may sound complicated or seem a bit expensive to someone, but within the Shopify frameworks, there are quite a few tools available for it
- Do not force your customer to make purchases. Offer him options for the status of your clothes, shoes or other goods. What will he get from this? What should he experience at this moment? Ease, envy, routine or strength. Just do it, remember? This is not a direct offer to refuse from product placement, but a way to attract loyal customers.
- Make convenient filtering, search and sizing of goods. The main reason for which the returns may occur in the fashion segment is an error in the choice of size.
- Find any reasons and ways to advertise new products, offer current fashion assortment, quickly update seasonal offers, etc.
Explore the features of your category and market so that your online store does not work for self-sufficiency, but for profit. Sometimes minor modifications can radically change your sales, and entering new markets can several times scale up your business. For the sake of these changes, it is worth exploring statistics. Want to know more? Read our next review on the food/drink product category. Wish you just high sales and loyal customers!