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2PM reports that 13 of the top 20 direct-to-consumer (DTC) brands are in the fashion and apparel
industry. Brands like SHEIN, Chewy, and Gymshark make the shortlist, proving the crushing power
fashion brands hold in the ecommerce space.
Digital innovation, rising globalization, and changes in consumer spending habits have catapulted the
fashion industry into the midst of seismic shifts. But, thanks to rising inflation and supply chain
pressures, the fashion sector is more unpredictable than ever.
This guide shares the statistics, trends, and strategies shaping the ecommerce fashion market in 2023
and beyond, giving you an updated look on where we are and where we’re heading.
Below are some of the latest ecommerce trends that you can work into your long-term fashion sales
strategy.
Secondhand apparel is becoming a global phenomenon. The resale market grew 24% in 2022 alone,
and is expected to reach a $218 billion market valuation by 2026.
Source: ThredUp
Leading the trend is North American consumers, where the secondhand apparel market has grown
eight times faster than the overall apparel market. Technology and online marketplaces are driving
this trend, with 70% of consumers saying it’s easier now to shop secondhand than it was five years
ago.
Secondhand displaced nearly one billion new clothing purchases in 2021 that normally would
have been bought new.
—ThredUp
Secondhand displaced nearly one billion new clothing purchases in 2021 that normally would have
been bought new.
Fashion brands are taking notice. Dôen, a California-based premium fashion brand, is launching a
resale program, called Hand Me Dôen. The program will allow customers to send in pre-owned Dôen
products in exchange for store credit.
Dôen will host flash sales throughout the year when the resold product becomes available. The goal
of not making resale available all the time is to prevent customers from visiting the site and finding it
already picked over.
Shein is also launching a resale platform in the wake of criticism about its labor practices. Some
experts are skeptical about the platform and believe it is simply a way for the company to greenwash
its image.
It remains to be seen whether fast fashion brands will be able to capitalize on the resale market in the
same way luxury and premium brands have. However, one thing is certain: the resale market is here
to stay, and it is only getting bigger.
Personalization has long been hailed as the secret of modern ecommerce. By showing items a
shopper was previously interested in, or retargeting them based on the activity they’ve had with
your ecommerce website, you’re providing a tailored online shopping experience—one that
convinces them to buy.
Shopify research shows that 44% of customers are OK with brands using their personal information
to personalize messaging and improve the customer experiences, such as product recommendations.
But there’s a fine line.
Online shoppers are increasingly concerned about their privacy. Too much personalization can be
creepy, hence why brands that over-personalize are three times more likely to be abandoned by
shoppers.
Culture Kings is the perfect example of how fashion ecommerce brands can balance under- and over-
personalization. Instead of customizing the experience down to “first name” tags on the website, it
built four global storefronts to sell in different currencies. The result? More than half of the fashion
brand’s revenue now comes from its ecommerce business.
I believe we’ll see more local brands branching out and offering customized shopping
experiences for international customers to remain competitive. This will include things like
geo-targeted domain names, pricing in local currency, and local product shipping, with the
help of third-party distribution or company-owned warehouses.”
One type of item that functions both in and out of the metaverse is non-fungible tokens (NFTs)—
unique digital tokens that can only be owned by one person, usually paid for in virtual currency like
crypto. Data shows $87.03 million was spent on NFTs on January 1, 2022, alone.
Celebrities like Reese Witherspoon were mocked for predicting, “In the (near) future, every person
will have a parallel digital identity. Avatars, crypto wallets, [and] digital goods will be the norm.”
“In everything we do, we’re helping the customer imagine. We want them to imagine being the man
in every picture. To imagine us being their stylist. To imagine, ’That could be me wearing those
clothes.’ We’re not so much curating content as curating imagination.”
In reality, fitness apparel brands like Under Armour are experimenting with NFTs in the retail space.
Its Steph Curry collaboration reproduced shoes the basketball star wore when he broke the NBA
record as all-time top three-point shooter.
Digital NFTs were released alongside the physical product launch. Owners of the NTFs could
virtually wear the shoes in three metaverses: Decentraland, The Sandbox, and Gala Games.
Retailer Forever 21 partnered with Roblox to create virtual fashion ecommerce stores in its
metaverse, appropriately named the Forever 21 Shop City. Players run the virtual store as if it was
their own, and purchase merchandise for their avatar through the game.
With Forever 21 Shop City, our goal is to expand how we engage with customers, extending
our presence and product in new ways.”
Fast-fashion retailer PrettyLittleThing also recently began showcasing products on virtual models.
The brand posted the news to its Instagram page, turning its new “avatar in the metaverse” concept
into a competition to spark conversation.
“Just like Fortnite community inspired Balenciaga’s designs, fashion companies can move towards
becoming creative collectives. Each collection can have its own identity within the brand universe,
reputation, and community. Collectives can focus on the actual product designs and/or on content
creation, with associated royalties based on item/content performance, delivering returns to creators
in perpetuity and ensuring that a brand attracts the very top talent.”
Fashion brands are using Roblox to create immersive experiences for users and reach Gen Z
audiences. This is just the beginning for fashion brands in the metaverse. As our world becomes
more and more digitized, it’s likely that we’ll see even more brands experiment with NFTs and other
virtual reality experiences. It’s an exciting time to be a fashion fan, and we can’t wait to see what
brands come up with next.
The fashion industry is no stranger to criticism. Fast-fashion brands especially are (sometimes
rightly) chastised for the methods they use to manufacture and produce inventory.
In light of these criticisms making mainstream news, plus consumers’ increasing commitment to
eradicate climate change, some 52% of shoppers say they’re more likely to purchase from a company
with shared values.
An important value for modern fashion consumers? Sustainability. Statista’s research shows 42% of
global customers purchase eco-friendly and sustainable products. Certain countries are leading the
trend—online shoppers in Vietnam, India, and the Philippines purchase sustainable products more
often.
With people spending more time online, it is going to facilitate faster exchange of that information
[about suppliers]. We’ve become more aware of how things that happen in far flung places affect us
and the planet. That’s been a real key change we’ve seen.”
Purchasing habits are also shifting off the back of the pandemic. Some 65% of customers plan to
purchase more durable fashion items, with 71% planning to keep the items they already have for
longer. The fashion resale market is booming for this reason—growing 11 times faster than
traditional retail and tipped to reach a $77 billion valuation in the next five years.
Patagonia is one apparel brand with sustainability rooted in its brand values. The retailer actively
campaigns for environmental causes, and demonstrates its commitment to sustainability with its
Worn Wear program. Shoppers are encouraged to buy and sell used items instead of buying new.
We’re proud to offer our customers a conscious shopping choice with sustainable, affordable
pieces that are all handpicked and on trend, but we believe every brand needs to take
responsibility, and push themselves to become more circular.”
But the truth is: social media is no longer a place for shoppers to consume new fashion trends. Many
social media platforms are evolving their business models to facilitate in-app shopping, helping
online retailers reach customers actively in the purchasing frame of mind.
Social commerce sales are expected to nearly triple by 2025, with more than one-third of Facebook
users planning to make a purchase directly through the platform in 2022.
Unfortunately, most brands are plagued by a single sin. Andy Crestodina, co-founder of Orbit Media,
describes the situation perfectly: “Most branded content is advertising under a thin layer of
information or entertainment. Scratch the paint, find an ad. It’s the brand putting itself first.”
Thankfully, fashion and social media are a match made in ecommerce heaven. Even when it comes
to explicitly “branded” content, and especially on Instagram.
Social media engagement rates for global fashion brands are abysmal:
Instagram: 0.68%
Facebook: 0.03%
Twitter: 0.03%
So, what types of content is working for fashion brands? Some 46% of consumers want to watch
product videos before they buy. Platforms like TikTok and Instagram are praised for driving sales for
large fashion brands since shoppers can visualize the product on a real person. Bonus points if it’s a
social media influencer they already trust.
Long gone are the days of celebrities being only someone you’d see on TV. Today, anyone with a
passion can become a celebrity in the social media niche—partly due to the rise of entertainment
platforms like Instagram, LinkedIn, and Twitch.
Beyond influencer marketing on social media, multichannel ecommerce integrates native selling off
site to build direct buying paths in the places your audience spends their time. Social media platforms
are creating their own commerce features—like Shopping on Instagram, Facebook Shops, buyable
pins on Pinterest, and more.
Livestream shopping is also in its heyday. Nordstrom launched its own livestream shopping channel
last year. It’s in good company: 81% of companies plan to increase or maintain their investment in
livestream selling to drive sales over the coming year.
Why? Because online brands are seeing conversion rates of up to 30% through Facebook and
Instagram livestreams, along with lower product return rates.
“My prediction is that in a couple years, the hottest role for a brand to hire is going to be a head of
live shopping.”
“The future is neither ecommerce nor retail. It’s just commerce. So the question becomes, ‘How do
you symbiotically integrate both channels?’”
Data compiled in Shopify’s Future of Commerce report proves omnichannel commerce isn’t
disappearing anytime soon. Modern consumers want both online and offline sales channels—and
synergy between the two:
Brands investing in brick-and-mortar retail include Canadian fashion brand SMYTHE, which opened
its store in Toronto. After years of experimenting with pop-up shops, Gymshark also opened its first
permanent flagship store in central London.
“A children’s wear retailer I spoke to pivoted from in-store events to virtual shopping events via
Zoom during COVID,” says Kyle Monk, Director of Insight for British Retail Consortium.
“Suddenly, they were having one member of staff walking around the store selling products to two to
300 people per call every week, instead of just a few in person. Retailers who thought innovatively
and pivoted thrived over the last period.”
It’s no wonder 53% of brands are investing in tools that allow them to sell anywhere.
Iconic streetwear retailer Culture Kings opened an experiential, 14,000-square-foot store in Caesars
Palace on the Las Vegas Strip in October 2022. Culture Kings is prioritizing a "retail-tainment"
approach to physical retail, featuring a recording studio, Secret Room, and other immersive
experiences. The company plans to open additional experiential stores in key US cities.
Move over TikTok: Short-form video platform YouTube Shorts is gaining traction among fashion
brands and creators. According to social media leads, YouTube Shorts offers a first-mover advantage
similar to early TikTok adopters.
Brands like Nike, Skims, and American Eagle have already added Shorts to their marketing mix.
Luxury brands like Gucci, Christian Dior, and Louis Vuitton are also getting on board.
Shorts see more than 30 billion daily views and attract 1.5 billion monthly users, according to
YouTube. With these numbers, fashion brands can gain YouTube subscribers without investing in
long-form video, receive high engagement rates, and boost sales.
Shopify and YouTube are teaming up to give merchants and creators a powerful new way to connect
to consumers, build their businesses, and share their stories. With the launch of YouTube Shopping
on Shopify, merchants can easily integrate their online store with one of the world’s biggest
entertainment platforms.
Fixing items rather than throwing them away is becoming a trend for fashion brands. Bottega
Veneta recently announced that it’s giving all customers a lifetime warranty on their handbags. Louis
Vuitton will also repair any bag for a price, depending on the item and type of repair.
The expansion into repair services comes at the helm of sustainability. The fashion industry is
becoming more aware of its environmental impact, and repairs are a cost-effective way to keep
clothes in good condition longer.
Brands like Patagonia and Arc’teryx have opened repair centers, as have fast fashion retailers like
Zara and Uniqlo. Repair-focused startups like The Restory have raised millions to date as interest in
sustainable fashion and resale boosts demand to extend the life of garments.
Inflation, supply chain issues, and lack of consumer spending is pushing DTC brands toward
wholesale. A recent Glossy and Modern Retail survey shows that DTC brands are investing in other
types of sales partnerships to diversify income.
When asked about performance over the past 12 months, 62% of respondents said wholesale revenue
increased the most, even compared to direct sales. Brands see wholesale as a major business
component moving forward too, with 80% predicting wholesale revenue will go up over the next
year.
Source: Glossy
Digitally-native-seeking retail partnerships isn’t a new thing. Harry’s entered Target in 2016. DTC
brands like Quip and Native followed suit into big-box retailers shortly after.
But 2023 marks a turning point for DTC brands rushing into wholesale. Sales are up at mass retailers
like Target and Walmart. Ongoing supply chain disruptions are making direct channel fulfillment
increasingly harder, harming profits.
So while the pressure to grow may be intense, there are still opportunities for DTC brands to find
success. Wholesale partnerships may become essential for survival in coming years as DTC brands
navigate the turbulent economic landscape.
Ecommerce fashion statistics
According to Statista, the ecommerce fashion industry’s compound annual growth rate (CAGR) is
tipped to reach 14.2% between 2017 and 2025, with the industry hitting a $1 trillion valuation by
2024.
Sales of apparel, footwear, and accessories continue to rise, hitting $204.9 billion in the US alone.
That’s tipped to grow by 13% this year, with consumers set to spend $204.9 billion on fashion items
online.
We’ll get into strategies to combat these issues later. For now, let’s examine how these big numbers
play out in industry sub-verticals.
The COVID-19 pandemic wreaked havoc on the last few years’ fashion ecommerce predictions.
When lockdowns were enforced globally in March 2020, 27% of US consumers said they planned to
spend “somewhat” or “a lot” less on luxury and fashion items than they had budgeted prior.
Despite this, McKinsey named it the “perfect storm for fashion marketplaces.” Brands
like Zalando reported a 32% to 34% growth in gross merchandise value (GMV) during the second
quarter of 2020. Fast-fashion brand Shein saw its valuation double, to $30 billion, making it the
world’s largest online-only fashion retailer.
One branch of fashion retail that has taken off is athleisure. Athleisure’s market size was valued at
$155.2 billion in 2018—a figure that’s set only to rise.
Casualwear remains dominant on Amazon, with athleisure predicted to have a CAGR of 6.7% from
2019 to 2026 and reach $257.1 billion. The loungewear and sleepwear market shows similar signs of
growth, poised to increase by $19.5 billion between 2020 to 2024.
The result? Fashion brands with an ecommerce store maintain a stronghold in athleisure style goods,
like Nike and Lululemon, have reported incredible growth over the course of the pandemic.
Lower digital barriers to entry for all clothing merchants offer the opportunity to market, sell, and
fulfill orders globally and automatically. As a result, worldwide revenue and revenue per user
(ARPU) are both projected to grow.
In the US alone, the apparel and accessory industries accounted for 29.5% of all ecommerce sales in
2021. In Europe, it’s expected that by 2025, each consumer will spend $999 on fashion-related items
over the course of a year.
3. Shoes segment
As a segment of ecommerce fashion, the shoe industry saw similar peaks in market value. In global
market size, the footwear segment will increase from $365.5 billion in 2022 to $530.3 billion in
2027.
Asia is dominating this segment, holding 54% of the global footwear market (compared to just
14.8% for Europe and North America, respectively).
Athletic footwear is also a growing segment, tipped to generate $63.5 billion in 2023—a 23%
increase from the $51.4 billion valuation in 2020.
Not surprising, the bags and accessories segment—although still growing at a stronger rate—will
likewise see double-digit growth. The fashion accessory segment will have a CAGR of
12.3% between 2016 and 2026, with Asia-Pacific being the fastest growing market.
Those projections actually make bags and accessories one of the healthiest segments of ecommerce
fashion, despite its absolute numbers being the smallest.
In 2020, the global jewelry market was valued at a total of $228 billion. It’s forecasted to reach $307
billion by 2025, with ecommerce sites expected to facilitate 20.8% of sales in the luxury goods
category this year. Luxury watches are set to take a huge slice of that revenue—customers will
spend $9.3 billion on them in 2025.
Increasing affluence in Asia-Pacific and in the Middle East drove up the average revenue per luxury
good consumer to $313. Despite luxury goods sales seeing sluggish growth, at 3.4%
annually, McKinsey forecasts indicate that ecommerce could triple in sales over the next decade—
reaching €70 billion ($79.5 billion) by 2025.
The biggest threat is the affordable luxury market: Should the industry offer luxury goods at multiple
price points to grow the market overall? Or will affordable luxury dilute or erode the high-end luxury
market—dampening consumer confidence that what they are buying is “true luxury”?