In the year 2018, more than 1,875 fashion retailers closed out. This year, according to reports by WWD, this number is roughly under 10,000, i.e., 53% from the number of businesses that closed down amidst the great recession of 2008. Back to the present, we are seeing digital innovation, rising globalization, and changes in consumer spending habits that have brought about catalyst shifts in the fashion industry.
According to an industry-wide data released by the fashion and apparel industry report, the worldwide revenue is expected to rise from the U.S. $481.2 billion in the year 2018 to the U.S. $712.9 billion by the year 2022.
Four significant opportunities are driving this growth:
With time, fashion consumers will have more purchase power. The reason being, prospective customers are projected to rise to more than 1.2 billion by the year 2020. The good news that the majority of these fashion consumers are new within the age groups of 16 to 24 & 25 to 34 years.
The established brands need to watch out for potential threats, including:
Due to lower digital barriers of entry, all clothing merchants have an equal opportunity to market, sell, and fulfill orders globally. This has resulted in the worldwide revenue and revenue per user to grow as the years have rolled by. However, the revenue growth in terms of compound annual growth rate is reducing every year. In the year 2018, it was 15.3%, which will come down to 7.6% by the year 2022 approaches. The reason for this decline is due to western-market saturation. When you compare the growth rates between the U.S., Europe, and China, between the years 2017 and 2022, CAGR is expected to be:
In terms of eCommerce fashion, shoes depict a similar picture of diminishing revenue expansion every year. It was in double digits between the years 2017 to 2019, while footwear is expected to grow by a meager 6.6% in the year 2022. In terms of sheer market size, the shoe segment is expected to grow from the U.S. $96 billion in the year 2018 to the U.S. $135 billion in the year 2022.
The bags and accessories segment is growing at a strong rate. It was in double-digit, i.e., 15.6% in the year 2018 and is expected to dip into single digits by the year 2022, i.e., 8.7%. As per the future projections, accessories & bags are considered to be the healthiest segments of eCommerce fashion, even though its absolute numbers are the smallest.