Research from GlobalData exploring the future of the apparel market post-pandemic reveals that throughout the pandemic, apparel was one of the hardest-hit retail sectors since it lacks the essentiality of some of its counterparts such as food, grocery, and health and beauty.

While in 2019 apparel accounted for 11% of total retail spend, this is forecast to drop to 10% by 2025 as consumers experience lower discretionary spending thanks to rising inflation and new apparel purchases will fall on their priority list.

Though 2022 sees the return of normality to some degree, including larger social events like weddings and the return of international holidays, apparel demand is set to spike. But this will be offset by global supply chain disruption and rising inflation which will create challenges and limit the growth of the apparel market.

Combatting apparel supply challenges

“Towards the end of last year, apparel supply chains faced huge bottlenecks,” says Chloe Collins, head of apparel at GlobalData.

“Pent up demand led to port congestion and a shortage of HGV drivers meant goods took longer to transport to stores and warehouses with border controls causing particular issues in Europe after Brexit. Many factories in Asia were also shut down due to further waves of covid-19 and staff absence. These issues led to product availability problems across retailers for the golden quarter and this continues into 2022.”

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Collins says some retailers like Inditex and LVMH have only experienced minimal disruption so far while others such as NIKE and adidas have suffered more greatly.

“This is partly due to their offer. Low stock of heavily branded sports trainers where consumers want a specific style would likely mean spend would be lost rather than being shifted to another brand.”

However, she adds it is also down to supply chain makeup and where the majority of sourcing happens.

“It is crucial for the future that apparel brands diversify their supply chains and reduce their reliance on specific factories or countries. Local suppliers closer to warehouses and stores should be sought so transport is minimal and less exposed to disruption. Inditex has done this particularly well as it owns the majority of the factories located in Spain which means shorter lead times to its store chain around Europe and even quicker reaction to trends.”

Key trends to watch

  • The global apparel market is expected to grow by 7.7% year-on-year in 2022, ending 4.1% over 2019 levels though some regions, particularly the western hemisphere will take a little longer to recover.
  • Between 2023-25, growth is forecast to stabilise at around 4% each year leading to a market size 18.3% higher than pre-pandemic levels in 2025.
  • Inflation will be the biggest macroeconomic factor to impact the global apparel market in the next few years.
  • Online will continue to remain a dominant shopping channel even as we return to life as normal.
  • Casualisation will continue to trend strongly.

The start of 2022 feels almost as though Covid was the precursor to the main event. All regions saw sharp price inflation in 2021 with the impact of Covid-19 on the global supply chain boosting the price of fuel, raw materials and energy.

“In our global consumer survey conducted in 2021, 59% said they were worried about their personal finances, and they expected inflation to continue for the rest of 2022 and beyond,” explains Collins.

“This will limit the potential of the apparel market as prices for food and health products increase leaving less discretionary spending. Furthermore, as apparel brands experience higher cost prices many will be unable to absorb this and the cost will be passed on to consumers. Next and Superdry have already said they plan to do this. This creates more challenges as the market becomes more competitive and brands have to convince shoppers their products are worth the extra money.”

The online opportunity

Despite the return to normal as we exit the pandemic and a consumer that is more willing to spend time browsing physical stores, online will continue to grasp a larger market share over the next few years. The online channel will account for a third of total apparel spend by 2025.

GlobalData finds during the pandemic brands that lost out were those with a greater reliance on their physical store estate such as Primark which suffered from its lack of a transactional website which it still remains firm against introducing despite the sales loss it incurred. Retailers with sales concentrated in Europe such as H&M Group and C&A struggled as the region was most affected by multiple waves of Covid and repeated store closures.

Conversely, brands of leading online platforms stand to benefit in the next few years as the pandemic accelerates global rise in online penetration with some consumers switching to online for the first time. Multichannel players must ensure their additional presence enhances their instore ops such as Zara’s instore app.

Shein is another threat to fast fashion players with it overtaking Amazon to be the most downloaded app in the US in May 2020 aided by its extremely low prices, huge product range and social media presence.

New developments in the digital space such as the metaverse and NFTs will also provide retailers with exciting opportunities such as virtual products to dress their digital avatars. Mainly luxury and sportswear brands have started exploring these digital platforms releasing NFTs virtual collections and opening metaverse stores within gaming platforms.


  • Almost 40% of Americas apparel spend will be online by 2025.
  • The UK and Germany have the highest online penetration in the world. The UK sat at 30% pre-pandemic and will grow to 45% by 2025.
  • Online shopping penetration in the MEA will remain quite low because of cultural reasons in part – shopping mall culture takes precedence.

Emily Salter, senior analyst, apparel at GlobalData explains: “A weak online offer will be an important driver of brands losing share with brands unable to captalise on increasing online penetration such as C&A and New Look. Even if players have improved their online offer it’s going to be hard to immediately benefit from because the reputation to shop online being harder will linger creating a legacy of being a digital laggard. Despite Primark’s appealing value proposition its lack of a transactional website will continue to be a hindrance .”

Another channel that continues to pick up steam is the direct-to-consumer (DTC) channel.

24% of GlobalData survey respondents said they would purchase a product from a brand’s own store followed by 20% buying it online from a brand.

This high proportion of DTC sales has taken away revenue from other channels especially mid-market department store which have lost share in the past few years in Europe and the US,” Salter says.

“Apparel brands are using different routes to market to sell shifting their model away from wholesale revenues and moving more to direct to consumer models. An increased number are doing this to reduce costs, increase control of their brand, interact with shoppers and pricing strategies. These factors have also pushed brands like Levi Strauss, Calvin Klein and Nike to focus on growing their DTC channels mainly through developing their DTC channels. Lululemon primarily sells through its DTC channels and this has been a highly successful strategy.”

Total revenue in the year to January 2021 grew 33.9% on a two-year comp.

“It allows Lululemon to target a highly engaged community of consumers as it offers fitness classes in-store and online and post informative fitness content on its social media channels boosting loyalty. Levi Strauss trialled its Next-Gen store format in six locations across Asia and Europe in 2019 and launched it in the US in September 2020 it has since opened two additional stores in US with a plan to open 100 more across the country over the next few years. Features of the shop include tailored ranges based on customer preferences using local customer data and personal shopping appointments helping to integrate the digital platform into physical locations making its own retail proposition more unique to convince shoppers to purchase directly from the brand.”

Nike increased its focus on DTC before the pandemic and this has proved especially fruitful over the last few years. Nike has cut ties with many wholesale partners and limits the product sales through its own channels keeping its most desired items for its own operations. Its website is slick and innovative with its online Nike membership boosting loyalty.

Phygital retail – a hybrid offering of digital and physical retail will also continue to gain traction. Consumers are returning to shop for apparel in physical stores and so modernising shop floors will be a central driver to restoring footfall.

Amazon is to open a physical store in the US for apparel later this year. Sophisticated machine learning algorithms create a personalised experience for its consumers offering products based on other things they have been interested in. It will incorporate Amazon One payment method which uses hand recognition and there will be other features such as QR codes and interactive mirrors.

RFID is being used to make the consumer experience more aligned with online shopping. Brands like Uniqlo and Decathlon have used it to create self-checkouts.

“Zara is a leader in phygital retail, also using it to make the shopping experience more convenient also allowing products to be reserved through a click and go service booth. Fitting rooms to use click and try and the technology displays each items exact location in store,” says Darcey Jupp, associate apparel analyst at GlobalData.

QR codes are used by Nike to allow customers to get further product information via the app instore. It also allows consumers to checkout faster while directing more traffic to its app which in turn could boost online sales.

“Consumers want more stores that make the shopping experience convenient,” Jupp adds. “Tech is changing the face of physical retail to support this integrating digital aspect to transition into phygital retail.”

Casualisation remains an important trend in apparel

The pandemic led to spending more time outdoors for both exercise and socialisation as lockdowns gave limited scope for other leisure activities.

Leggings will continue to see strong growth of 33.8% by 2025. Styles designed specifically for sports will remain popular as consumers become more concerned with their health and wellbeing.

Sportswear saw a significant uplift in 2020 massively outperforming total apparel with its share rising to 25.1% as consumers looked for more comfortable clothing while staying at home.

Salter says: “Brands must embrace casualisation to thrive post-pandemic as the trend in 2020/21 has seen consumers work from home and get used to wearing comfortable clothing. Sports inspired clothing became more acceptable in social settings. This will continue as hybrid working continues and companies become more relaxed about office wear.  So will the desire for a smart-casual wardrobe and key items that can be dressed up or down with shoppers prioritising comfortable fits and materials. This trend is evidenced by the continued growth of athleisure. Luxury brands are also reacting to the casualisation demand to attract young shoppers with many ranges influenced by streetwear. This is also playing a part in the decision to which luxury brands collaborate with for instance Gucci partnering with The North Face in 2021 creating a logo-heavy capsule collection with the second collection launching in January 2022.”