As apparel retailers grapple with consumers’ pullback in discretionary spending, a few common themes are emerging. Some are refocusing on core consumers while others are experimenting with cutting-edge technologies.
Here are four trends to watch.
Our view: Retailers need to prove their worth. If brands aren’t able to lower prices, they need to find another way to provide value to customers, whether that’s through convenience, quality, or strategically planned discounts and perks.
Our view: To succeed alongside established brands, D2C companies need to think beyond selling just online or just in-store.
“What leads to a successful business is having multiple ways to sell your product and finding the right partners to help you do it,” said our analyst Suzy Davidkhanian. “That means using wholesale models, social commerce, or any other number of strategies to reach the maximum number of consumers.
The sustainability factor: As consumers seek more sustainable ways to shop, fast-fashion brands seek ways to cut down on the massive amounts of waste they produce. Some, like H&M, have launched resale programs, which cut down on waste while also boosting profits. Others, like Primark, will source more sustainable materials for their clothing.
Our view: With everyone vying for the same customers, fast-fashion retailers need to find ways to differentiate themselves. Considering co-branded product lines (which feed into consumers’ desire for unique or hard-to-get items) or finding ways to make the purchase journey more seamless (through flexible payment or pickup options) could be two strategies.
Our view: Experimenting with cutting-edge technology can give fashion brands an edge, but it’s important to make sure the technology resonates with consumers. For example, only 18% of US teens and adults have used the metaverse in the past year, per a February 2023 KPMG survey, making an investment in the technology a gamble.
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