- Double-digit sales growth expected over the next decade for the fashion and apparel industry
- Worldwide fashion and apparel ecommerce will increase at a compound annual rate of 10.6% from $408 billion in 2017 to more than $706 billion by 2022
- Developed markets will focus research on machine learning, artificial intelligence, and ecommerce automation tools
- Innovative brands will focus on fitness technology, virtual fitting rooms, and AI-powered virtual shopping assistants
- Voice-powered shopping, visual search, and smart speakers will provide brands intimate touchpoints for customers
Recent research by Shopifyplus show that the fashion & apparel industry will grow at a CAGR of 10.6% over the next four years; this growth will be fueled by an expanding global market. Furthermore, Shopifyplus findings correlate with industry-wide predictions that artificial intelligence and automation tools such as subscription ordering and virtual shopping assistants like Alexa and Google Home Hub will play an important part in how consumers purchase everything from laundry detergent to a new spring dress. However, despite growth projections, there are identified threats to the fashion & apparel retail industry that executives need to address.
Identified Obstacles for Fashion & Apparel Retailers
The Shopifyplus research report identified two major threat indicators for fashion retailers. The first is to understand the competitive landscape of modern retail strategies and how brand loyalty has recently changed. The second threat to fashion & apparel is the rising rate of returns; where some sectors have reported return rates as high as 50%.
Traversing the modern fashion & apparel retail landscape
The apparel & fashion landscape has changed through the years. Consumers are no longer ‘brand loyal’ in the sense that they will only buy, say, Levi’s jeans or Ralph Lauren polo shirts. While a strong brand name does inspire purchasing confidence (especially when it comes to honoring return policies), the modern trend is that brand loyalty can now shift, depending on a retailers ability to manufacture on-demand inventory that stays current with changing styles.
What’s more, to stay relevant with today’s younger consumers, fashion retailers need a strong social media presence that provides a statement on social, political, and sustainability issues. This type of message is the modern ‘branding’ that can help a retailer gain new customers through their social channels.
Combating fashion & apparel retail returns
Clothing and accessories purchases made online have incredibly high return rates. The Shopifyplus research report states that online return rates are as high as 50% in some sectors; while more conservative estimates are closer to one third of all online purchases are returned. Consumer returns is a serious issue that can have a detrimental impact to a companies reverse logistics and supply chain systems. When a retailer or a manufacturer does not have a process in place to quickly remove excess and returned inventory from a warehouse or distribution center, then storage, processing, and labor costs increase; thus depleting already thin margins.
Now that dealing with returns is a recognized part of doing business, it’s time for retailers to rethink their reverse logistics and supply chain operations, especially when it comes to merchandise that can’t go back on store shelves. Plus, with holiday returns a current reality, now more than ever, retailers need to think about a strategic liquidation solution like the one B-Stock provides.
If you’re ready to learn more on what the world’s top retailers are already doing, request a demo today!