Polarisation within the fashion retail market will lead to a decline of the mass market sector by 2016, a new report by just-style has predicted.
The report, entitled ‘Tomorrow’s clothing retail: sectors, markets and routes – forecasts to 2016,’ looks to answer whether the financial crises of 2008-2010 have created a paradigm shift in the behaviour of consumers, retailers and brands.
The report argues that whilst fashion will always change, fashionability will not. The sum of all merchandise segments will still be composed of roughly the same proportions of basic, traditional, contemporary, fashion, and high fashion.
“What will change will be the share of these held by different price point segments, within which the winners will be luxury and value, and the loser, the mass market,” the report’s author Malcolm Newbery said.
He predicts that by 2016, overall luxury and affordable luxury fashion retailing will have grown their percentage share by 10%, but this will only return them to levels before the recent financial crises.
Better and middle brands will grow by a small amount, mainly in the developing world as parts of it become more affluent. However, the mass market will decline as a result of polarisation, whilst the value market will grow, also as a result of polarisation.
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By GlobalData“The clear winners in the industry as a result of the trend of polarisation are the budget and luxury segments,” said Newbery.
“Price deflation and consumers’ price focus on the one hand, and consumers’ increasing fashion-focus on the other, are two parallel trends that work against the mass segment retailers.
“The mass segment retailers have suffered the biggest losses in the recent recession, while many budget and luxury retailers are either unaffected or have experienced growth.”
The report argues that retailer behaviour has been erratic since October 2008, characterised by an immediate reaction to dramatic falls in demand by a wave of offers; a realisation that spring and summer 2009 would be heavily overstocked; a savage reduction in purchases for autumn/winter 2009 and a ‘play it safe’ merchandise choice approach to spring/summer 2010.
For autumn/winter 2010 some have prepared for recovery; others have banked on double-dip recession.
With this in mind the report goes on to look at four future drivers of the industry: polarisation, online retailing, green issues and the supply chain.