Fashion

Industry
Report
Fashion Industry Report

Contents
Opportunities for retailers in the fashion industry 3
Global perspectives
Technological innovation
Influencers and celebrity culture
Sustainability

Threats for retailers in the fashion industry 7

Competitive landscape
Amazon and eBay’s world
Combatting returns

Contents
Fashion and apparel platform checklist 10

Resources for a fashion and apparel strategy 12

2 / 13
Fashion Industry Report

Opportunities for
retailers in the
fashion industry

Opportunities for retailers in the fashion industry

3 / 13
Fashion Industry Report

Global perspectives
Around the world, shoppers are buying more apparel and shoes than ever before. By 2022,
the global ecommerce fashion industry is projected to grow to $713 billion. (Statista) Experts
predict the ecommerce segment of fashion and apparel will grow at a compound annual rate
of 10.6% until 2022.

Ecommerce fashion industry

Worldwide revenue in billions of USD
Data via Statista

Opportunities for retailers in the fashion industry

In such a fast-growing global market, brands are fighting to fill every gap in the fashion
industry—and they’re looking to China to do it. Of all the regions with the most growth and
potential, Asia Pacific consistently comes out on top. By revenue alone, China is the top
consumer of fashion: The Asia Pacific is projected to make up 38% of market demand in
2020. Expected additional growth in Asia includes emerging markets such as smartphone
penetration and the unprecedented expansion of the global middle class.

High-end U.S. fashion brands are increasingly vulnerable to an increase in trade war tariffs due
to its reliance on China for manufacturing. While basic apparel items (T-shirts and underwear)
can be shifted to other lower cost production hubs, due to technological constraints other
countries cannot yet produce the same quantity or with the same quality as China.

4 / 13
Fashion Industry Report

Technological innovation
In developed markets, retailers will increasingly drive growth with machine learning, artificial
intelligence, and ecommerce automation tools that offer highly relevant and personalized
customer experiences.

Innovative brands will likely take share as fit technology, virtual fitting rooms, and
AI-powered virtual shopping assistants help consumers tailor or select the size and look
most closely aligned with their tastes and preferences. Expect voice-powered shopping,
visual search, and smart speakers to offer brands intimate touchpoints with their customers.

Influencers and celebrity culture

In today’s economy, anyone can become a celebrity. What was once reserved for a chosen
few, now anyone with a large enough following, community reach, talent, or visibility
in music, sports, or film can ascend to the highest of celebrity heights. Social media

Opportunities for retailers in the fashion industry

influencers started as individuals with a hobby or interest in a specific industry and became
superstars with a wide reach.

Collaborations with influencers and celebrities provide a huge opportunity for brands to
leverage the reputation and following for retail. Influencers don’t have to be top tier with
millions of followers to be an important tool in the fashion industry. These people might
have strong community ties and represent part of a whole—someone more relatable and
accessible to your consumer base.

Whether your influencer’s largest following lives on their Instagram feed or YouTube channel,
more and more social media platforms are allowing their community members to shop
directly, without ever having to leave the platform.

5 / 13
Fashion Industry Report

Sustainability
Increasingly, sustainability is top of mind for fashion retailers. Top to bottom, from consumer
to luxury brand CEO, everyone is thinking about climate change and fashion’s role in
alleviating it.

With a little more than a decade left to stop irreversible damage to the Earth, it’s imperative
for the fashion industry at large to consider what steps they can take to promote
sustainability and manage the quality of their product. Recently, French President Emmanuel
Macron and Kering CEO François-Henri Pinault held a talk with luxury and fast fashion brands
to discuss what they could do to protect the environment. In a landmark pact called the G7
Fashion Pact, 32 companies signed with the intention of protecting the oceans and focusing
on biodiversity and climate change. (FASHION)

Some of the world’s largest brands were involved in the agreement. Chanel, Nike, H&M, and
Adidas all agreed to reach zero carbon emissions by 2050, sustainably source raw materials
in an effort to reduce chemicals in water supplies and the oceans, eliminate single-use

Opportunities for retailers in the fashion industry

plastics in B2B and D2C by 2030, and switch to 100% renewable energy by 2030. (FASHION)

Already some brands are trying to curb their enormous carbon footprint by heavily
encouraging the use of take-back programs, which is when a retailer takes back the clothes
a consumer purchased from them. Not unlike a traditional returns program, take-back allows
for worn, used, and once-loved clothes to be turned into new products to help cut down on
landfill waste. Brands such as H&M, Levi’s, Patagonia, and Madewell already have a take-back
program in place. Not only is this model environmentally friendly, but it also brings in more
consumers and repeat customers. These initiatives help generate net-new customers and
encourage them to remain because they are giving back in a way that is both easy to do and
impactful on the globe. (VOGUE BUSINESS)

Sustainability goes beyond the products retailers are selling. It’s also in the packaging used
for shipping. The G7 Fashion Pact has already proved that being serious about sustainability
means the elimination of single-use plastics. Average box size and usable packaging all play
a role in reducing the carbon footprint on the planet. Consumers are demanding this from
their retailers, who need to consider other options for fulfillment, like partnering with more
localized centers to reduce the number of emissions from vehicles.

6 / 13
 Fashion Industry Report

Threats for retailers in

the fashion industry
Declining barriers to entry have made the
ultra-competitive fashion and apparel
industry even more complicated to navigate.

Threats for retailers in the fashion industry

7 / 13
Fashion Industry Report

Competitive landscape
The “death” of brand loyalty combined with fast fashion’s ability to manufacture on demand
and dropship from anywhere pose threats to established businesses who don’t have a
strong brand presence. “Sticky” brands with loyal customers are agile in how they deliver
their customer experience—whether that’s aligning themselves to a social cause, or hiring
multiple influencers to represent their brand on social media.

In the new age of commerce, consumers are calling the shots. Brands are adapting their
strategies to provide what customers demand, which means having a seamless experience
both online and offline: being omnichannel, and planning pop-ups with limited-edition
apparel. All of these examples give customers the reins with the hope of creating brand
evangelists who return again and again for new and thrilling experiences.

For example, Allbirds has a physical store in Los Angeles but customers can’t actually buy
anything in that space—they have to go online to do so. But the physical ability and sensory
experience of being in the store and interacting with the products is enough for a customer

Threats for retailers in the fashion industry

to independently purchase online. It’s a risk, surely, to put that much trust in a customer
who may or may not walk out with a purchase. But traditional stores have that same risk—
expecting customers to browse and end up at the checkout counter. When that expectation
is removed, and a customer is compelled to make that purchase on their own, the risk is
worth it.

Not adapting to this new model where the customer’s need is prioritized is a threat to
fashion retailers stuck in older modes of commerce. Participating in the culture, learning
how to shape it, and stepping aside for customer interaction are all crucial in this highly
competitive landscape.

These threats significantly increase the risk of holding an inventory position, especially in an
age characterized by near-instant changes in consumer tastes and preferences. Consider,
too, heightened customer expectations regarding ethically sourced materials and green
manufacturing practices. Sustainability will likely force brands to encounter increased
margin pressure.

8 / 13
Fashion Industry Report

Amazon and eBay’s world

It comes as no real surprise that analysts predict the two main ecommerce giants will
command over 50% of all ecommerce sales by 2021. It can be intimidating to think about
how soon that is.

Nearly 55% of product searches begin on Amazon, making it the largest marketplace search
engine. It’s important to understand that Amazon might not be every retailer’s favorite
channel, but should be an important part of every ecommerce strategy. When you consider
Amazon as a highly discoverable entry-point to your omnichannel retail strategy, you can
integrate the channel into the rest of your customer’s brand experience. Your customers
will be able to tell the difference between your owned customer experience and a search
engine’s, and hopefully, they prefer yours.

Combatting returns

Threats for retailers in the fashion industry

Fashion and apparel brands must also contend with another threat that hurts margins:
online return rates as high as 50% in some sectors. Even if more conservative estimates
are accurate—30% of all online purchases are returned—forward-thinking leaders must
aggressively work to reverse this trend.

9 / 13
 Fashion Industry Report

Fashion and apparel

platform checklist
While custom-built commerce systems have
historically been the norm for larger fashion
and apparel brands, today such cost-
prohibitive investments are unnecessary.
Multi-million-dollar brands—like Rebecca Minkoff, KITH, The Hundreds, Chubbies, and
Gymshark—are increasingly turning to cloud-based platforms.

Fashion and apparel platform checklist

Regardless of your decision to buy or build, any enterprise software you choose must
reduce complexity, streamline multi-channel selling, and allow you to focus on running
your business, not on technology.

10 / 13
 Fashion Industry Report

†† Customize and scale worldwide

Any future-facing solution must allow you to quickly tailor your brand across geographies.
Personalizing multiple storefronts around the globe and having the confidence to
experiment, test new markets, and scale on demand during large traffic spikes is critical.

†† Flexible and optimized payment gateways

Bridging the billion-dollar online to offline divide requires a flexible point-of-sale system that
connects pop-up shops or brick-and-mortar sales with all your online channels. Likewise, any
solution should host a wide variety of payment gateways that allow customers to check out
how they want.

†† Native multi-channel capabilities

No technical barriers should exist once you determine you want to sell natively on today’s
most popular marketplaces or social media platforms. Solutions that offer one-click channel
integration enable you to focus on growing that channel rather than the development work

Fashion and apparel platform checklist

that underpins it.

†† Synchronized product information and inventory

Solutions should automatically sync product information like price, description, and images
with SKU counts. This ensures your brand’s product data and inventory levels are accurate
and updated in real time across channels. Without auto-sync functionality, the task of
manually adjusting SKU counts across multiple channels will prove overwhelming.

†† End-to-end integration
It’s crucial that your multi-channel platform integrate both the sales and supply sides of
your business. Without software that easily integrates third-party solutions, your ability
to monitor data and make smarter inventory, pricing, and fulfillment decisions can be
compromised and growth can stagnate.

11 / 13
 Fashion Industry Report

Resources for a fashion

and apparel strategy
As a fashion industry leader, you need a specific
set of tools to achieve operational excellence
and offer the real-time insight necessary to
make intelligent decisions quickly.
To execute successfully, we’ve assembled the following resources, all of which center on real
brands in the fashion and apparel industry.

Resources for a fashion and apparel strategy

12 / 13
Fashion Industry Report

Global ecommerce statistics Optimize your warehouse

and trends to launch your to accelerate growth and
business beyond borders compete with Amazon
Going global is a necessity. Create a competitive advantage in the
Unfortunately, it’s also fraught with warehouse by tracking inventory and
questions. Where to invest? What order fulfillment in real time and identify
countries present the best product/ intelligent pick routes so customers get
market fit? How do you attract non-local their orders faster.
buyers? To help you meet the challenges
and take hold of the opportunities, we’ve The plague of ecommerce
organized comprehensive data into 11 return rates and how to
international trends. maintain profitability
How you deal with returns—before and after
Fashion and the rise of
purchase—will differentiate your brand,
social selling: Multi-channel
create a competitive advantage, and even
strategies from top brands

Resources for a fashion and apparel strategy

make you more profitable.
Social media–savvy businesses have
learned through first-hand experience that Save thousands of dollars
they need a multi-channel approach to by automating custom order
attract, sell to, and nurture a loyal customer fulfillment & fraud prevention
base online.
Discover the secret fast fashion brands are
using to perfect on-demand manufacturing
Millennials are changing the
and protect themselves from the growing
face of luxury ecommerce
threat of costly order fraud.
How can luxury ecommerce brands
drive sales among a demographic that's Turbocharge sales by automating
reaching its peak spending age? This post product tagging & inventory flags
highlights how your luxury brand can grow
Learn exactly how Khloé Kardashian’s
faster by placing your bets in streetwear,
denim-focused fashion brand generates
sustainability, and personalizations to win
$1 million a day by automating tedious
with millennials.
back-end tasks and lacing the customer
experience with urgency.
The guide to successfully
running a flash sale
Product drops, new releases, and holidays
are the lifeblood of ecommerce fashion.
Learn how to stand out, build trust, and
generate recurring revenue rather than host
margin-killing sales.

13 / 13