Online shopping and shifting dynamics resulted in steady 2016 apparel sales growth

Online shopping and shifting dynamics resulted in steady 2016 apparel sales growth

Changing consumer needs and an evolving retail marketplace helped the US apparel industry to a 3% rise in overall sales last year, but new research also warns the apparel industry is not delivering the product experience to drive greater growth.

Apparel dollar sales across women's, men's and children's categories reached $218.7bn in 2016, according to global information company The NPD Group.

But while the industry had positive overall performance with growth in most categories, it has struggled to exceed 3% sales growth since 2013, as significant gains in select consumer and retail segments were offset by declines in others.

The growth of online shopping, which was underscored during and immediately following the holiday season, was one of the most highlighted retail shifts of 2016. In 2011 online represented only 11% of total US men's, women's, and children's apparel sales, but in 2016 that number rose to 19%.

Pure-play e-commerce sites have been an important piece of online's growth, outpacing the overall channel performance. Online's continued growth has come at the expense of in-store sales, affecting the more traditional apparel department, national chain, and specialty channels. The growth that occurred in the online, off-price, and mass channels came from a consumer focus on convenience, value, and price. 

"The apparel industry is being pushed and pulled in different directions by consumers who are demanding something different, and looking to less traditional buying channels to find it," explains Marshal Cohen, chief industry analyst at The NPD Group. 

"Maturing millennials have a stronger shopping voice than ever before, but teens are showing a lack of passion for fashion, and baby boomers are feeling forgotten. The who, what, where, when, and how of shopping are shifting as apparel consumers express their different desires and needs at retail."

The apparel consumer's desire for comfort and style combined has sustained the growth of the athleisure movement for the last few years. Athleisure, which is heavily driven by millennials but appeals to all age groups, continued to be a top growing apparel segment through 2016 with an 11% increase that made it a $45.9bn market.

The emphasis on casual comfort attempted to take deeper roots in the women's intimates space last year, with increased emphasis on athletic-inspired products and newer bralette styles, but results fluctuated and ended in a slight uptick in year-over-year results.

Despite the strength of active, sales of tailored clothing increased 5%, and dresses retained their rank as one of the top performing categories in overall sales and growth with 5% growth to reach $15.6bn.

Last year was also a positive one for jeans, another critical category for apparel, which finally rebounded in 2016 to align with the industry's 3% growth rate, reaching $15.3bn in sales.

"Amidst all the change there is one constant in apparel sales performance – the apparel industry isn't delivering a product experience that will compel consumers to increase their spend," says Cohen. "Consumers may be driving the recent trends in apparel, but retail needs to respond and take ownership of the business back in order capture the greater growth opportunities that exist."