“It’s a time of transformation, and it ain’t pretty. Experts have said more retailers should learn from Stitchfix’s ability to leverage technology for customization, though they face the added challenges of a store base that e-commerce companies largely avoid.Įven if retailers can thread that needle, the underlying problem of weak demand is expected to dog the apparel industry for years, meaning more store closures and more bankruptcies lie ahead-with or without Amazon. The company had its debut on the Nasdaq Stock Market in November, and the shares have gained 34 percent. The retailer pairs algorithms and data to select customized outfits for its subscribers, giving shoppers a feeling of personalization and an easy, at-home experience. Stitch Fix Inc., an e-commerce clothing seller that was founded in 2011, has been an exception. That includes Bonobos, the once-hot menswear brand that was bought by Walmart last year. Others have sold out to established retailers, rather than making it on their own. Online darling NastyGal went bankrupt in 2017. Source: International Council of Shopping Centers With fewer fashion changes, there are fewer reasons to replenish wardrobes. To cut costs and speed up products that are known to sell, many brands now buy fabrics in bulk that can be made into multiple designs and patterns, resulting in fewer, “safer” options for consumers. The variety came with the risk of sinking a lot of time and money into a design that flops. Designers used to spend months working on a collection of boundary-pushing styles in an attempt to make a statement for the brand. That’s made many apparel brands gun-shy and less prone to taking design risks. The hope is that these ads seem more authentic and intimate than a television ad featuring a celebrity.īut because there are now millions of tastemakers online-with a hodgepodge of aesthetics-it’s harder for new trends to really break through. Retailers are devoting more of their marketing spending to digital ads, developing a social media image, paying for promoted posts and conscripting influencers to endorse their products. Sources: Company websites, Farfetch, listed price on Jan. Its growth coincided with the rapid expansion of fast-fashion competitors Forever 21 and Zara, too. Now, retailers such as H&M can mimic runway fashions for $35, or men’s jeans for $25, and can typically beat other retailers to market with trendy designs.įor years, this seemed like a recipe for success. Walmart and Target have long conditioned Americans that they can get items they want without spending a lot. This downward price pressure coincides with the emergence of low-cost, fast-fashion retailers in the U.S.
They cost $58 in 2009, then rose to $64 three years later, only to fall back down to $59.50 last year. The price of this wardrobe staple used to steadily climb, but no longer. Take a pair of men’s Levi’s 501 original-fit jeans. Apparel has become cheaper to make in recent years, especially as more production shifts to less expensive labor markets. There’s been general deflation in the clothing industry. As a result, more and more apparel companies-from big-name department stores to trendy online startups- are folding.įast-fashion companies and off-price retailers are putting pressure on prices.
And there doesn’t seem to be a savior in sight. Who needs fashion these days when you can express yourself through social media? Why buy that pricey new dress when you could fund a weekend getaway instead?Īpparel has simply lost its appeal. Many upstarts promising to revolutionize the industry drift away with barely a whimper. The apparel industry seems to have no solution to the dwindling dollars Americans devote to their closets. Consumers glued to their phones would rather browse online instead of venturing out to their local malls, and that’s crushed sales and hastened the bankruptcies of brick-and-mortar stalwarts from American Apparel to Wet Seal.īut that’s not the whole story. and its vise grip on e-commerce shoppers. The woes of retailers are often blamed on Inc.
At a time when the economy is growing, unemployment is low, wages are rebounding and consumers are eager to buy, Americans are spending less and less on clothing.
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