The changes in consumer spending habits and digital innovation have propelled the apparel and footwear industry into seismic shifts. The pandemic added further fuel to this fire and today the fashion sector is even more unpredictable than ever before.
Statista predicts the Compound Annual Growth Rate (CAGR) of the eCommerce fashion (apparel and footwear) industry to reach 14.2% any year between 2017 and 2025. Furthermore, a report published in Businesswire sees the fashion industry hitting a staggering $672.71 billion valuation by 2022.
Last year, the sales of the footwear and apparel industry catapulted, hitting the $180.5 billion mark in the US alone. Now Statista predicts this number to grow by 13% this year and estimates the consumers to spend an eyebrow-raising $204.9 billion on fashion items bought through online means.
Interestingly there are four notable opportunities for businesses here.
While the above points offer commendable growth opportunities for fashion and apparel businesses, here are some eCommerce trends that retailers can work into their long-term fashion and apparel sales strategy.
Personalization is one of the best sales-boosting strategies businesses can adopt in 2023. It revolves around convincing customers to buy by providing them with a customized online shopping experience. It is done by showing products a customer was previously interested in and retargeting them based on their latest activity on your eCommerce website. Powered by Big Data and Artificial Intelligence, it could also mean addressing each website or application visitor by name and giving them a discount on their frequently visited product. Opportunities to personalize the buying experience are endless.
Metaverse is the social media of the future. While the promise of virtual societies remains in development, it is something people will be readily using to conduct online business in the future.
Metaverse will offer new ways to conduct business with the customers. While the selling of fashion items will be at the forefront, there will also be the opportunity of selling non-fungible tokens commonly referred to as NFT. These are unique digital tokens on the blockchain that can only be owned by one person. Users will be able to purchase these through cryptocurrencies. According to a report, the NFT market secured purchases worth $87.03 million on January 1, 2022, alone.
There are some players benefiting from this in the market already. A fitness apparel brand, Under Armour, is experimenting with NFTs as you read this article. The company conducted the Steph Curry collaboration to reproduce shoes worn by the basketball star wore when the NBA record of the all-time top three-point shooter was broken. That made some history, and it is something that could be made into an NFT and sold online for millions.
The apparel and footwear industry is highly saturated, and the customers have more choices than they had in previous years. This means that brands compete against hundreds of competitors online when they advertise their products digitally. In 2023, businesses will need to increase their investments in paid ads. That is not just due to competition, according to reports the cost per click (CPC) of paid search ads in the fourth quarter of 2021 increased by 15% and that number will only increase this year.
In 2023, buyers will be making purchases from businesses with shared values. Since people have already ramped up their efforts to eradicate climate change, businesses in the apparel and footwear industry will be making some changes to their manufacturing methods to gain an edge over the competition. This is the prime reason sustainability will be an important value for fashion consumers in the years ahead. We also have numbers to back this up. Research shows that 42% of global customers prefer buying sustainable and eco-friendly products.
That is not all, the purchasing habits of people are also changing in the post-pandemic world. According to McKinsey, 65% of customers prefer purchasing durable fashion items, and 71% of the people interviewed said they will keep the fashion items they already have for a longer time duration. This is also why the fashion resale market is experiencing bullish trends. Forbes estimates it to be growing 11 times faster as compared to traditional retail and says that it will reach a mammoth $77 billion valuation in the coming years
Statista predicts that social commerce sales will triple by 2025 and according to emarketer, more than one-third of Facebook users are planning to make purchases directly through the social media platform this year. It is a fact that social media enjoys a prominent position in the online marketing strategy of many fashion brands. Data shows that common social media users spend approximately 15% of their waking life using online networking apps.
Interestingly, while social media was once a place to consume fashion trends, it is now becoming a preferred place for people to buy fashion products. Therefore, many popular social media platforms are facilitating in-app shopping in a bid to help online retailers engage and reach their target audience efficiently.
Businesses operating in the apparel and footwear industry always need to be on their toes when it comes to customer expectations and getting an edge over the competition. Software solutions offering reliable forecasts in various niches will prove to be instrumental in preparing for the next big thing in the industry. Personalization will be the name of the game in 2023 and businesses branching into omnichannel customer experiences will experience success this year. Fashion businesses will need to utilize social commerce to stay ahead of the competition in 2023. The best way to do that is through videos. Here is a hint, think Livestream shopping.
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