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The US online fashion retail market size is forecast to increase by USD 192.68 billion, at a CAGR of 13.31% between 2022 and 2027. The market growth hinges on various factors including the surge in online spending, deferred payment methods, and the expansion of e-commerce platforms. These elements collectively drive market expansion, fostering a dynamic landscape for consumer transactions. With increased consumer reliance on digital channels, coupled with flexible payment options, e-commerce platforms stand poised for significant growth. Furthermore, the report includes historic market data from 2017-2021.
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The market is burgeoning with product innovations and advanced technology, catering to evolving fashion trends sought after by the female population. Apparel manufacturers are adapting, offering new patterns and styles to match consumer preferences, while celebrities influence choices through social media platforms. With online sales surging, traditional brick-and-mortar stores face challenges, particularly in clothing and footwear stores. Both working women and men's apparel enthusiasts benefit from the convenience of online shopping, accessing everything from regular fit jeans to tapered and cropped styles. As standards of living rise, the demand for online fashion retail continues to ascend, reshaping in-store sales dynamics. Our researchers analyzed the market research and growth data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Deferred Payment Methods is the key factor driving the market. The prevalence of deferred payment methods like Buy Now Pay Later (BNPL) offers consumers the flexibility to divide their purchases into manageable, interest-free monthly payments. In the US, Millennials, driven by affordability, are embracing BNPL services, especially for impulse buys, fueling online fashion and apparel retail. Consumers, ranging from indulging in high-end fashion to opting for mid-priced brands like H&M, find such payment options advantageous. Fintech start-ups such as Affirm Holdings Inc., Klarna Bank AB, and Afterpay Ltd. are partnering with leading online fashion retailers to offer BNPL services.
For instance, Walmart Inc. and Affirm joined forces to introduce BNPL options for Walmart's online users, while Affirm's collaboration with Amazon allows customers to split purchases of USD 50 or more into monthly installments. These BNPL providers are also integrating their apps with direct shopping, streamlining the purchasing process across multiple brands in one platform. The fashion industry, catering to diverse demographics including working women, is witnessing a shift towards online sales driven by celebrities, social media, and product innovations. Advanced technology is reshaping both online and brick-and-mortar sales, adapting new patterns and styles to evolving fashion trends and consumer preferences such as regular fit jeans, tapered cuts, and cropped styles.
An increase in social media marketing is the primary trend in the market. In 2021, adult social media users in the US spent 60.4% of their time on Facebook and Instagram. These platforms help brands interact with consumers. In the US, spending on social media advertising has been increasing in recent years. In 2022, the total social media advertising spending in the country is expected to be approximately USD 63 billion, an increase of 11.15% over 2021.
Furthermore, the use of video content on social media channels has continued to rise in recent years. For instance, Facebook Live is one of the most engaging types of posts on the platform. Tools such as Live Shopping are rapidly gaining traction among both brands and consumers in the US. The growing popularity of Live Video content and the hype around Live Shopping showcase the importance of social media as a revenue-generating platform. Thus, such trends will have a positive impact on the growth of the market trends during the forecast period.
The presence of counterfeit products is the major challenge that affects the market expansion. Counterfeit products are made of low-quality raw materials and are a cheap imitation of branded products. The advent and penetration of e-commerce have further propelled the sales of counterfeit products by widening the geographical reach of people involved in manufacturing and selling such counterfeits. Consumers face challenges in distinguishing between genuine and counterfeit products. The availability of duplicate products can also lead to a decrease in the profit margins of established brands, reduce the brand equity of major players, lead to an uneven competitive scenario, and erode their market shares.
Additionally, counterfeit products included handbags, tote bags, shoulder bags, crossbody bags, backpacks, shirts, and pants bearing the registered and recorded trademarks of brands such as Gucci, Chanel, Fendi, YSL, and Louis Vuitton. As per the CBP, these products are sold in the US on well-established e-commerce platforms and illegitimate websites. In fiscal year (FY) 2020, CBP officers seized 26,503 shipments arriving in the US, which contained counterfeit products that were estimated to be worth USD 1.3 billion if they had been genuine. Thus, such challenges can have a negative impact on the growth of the market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The women segment is estimated to witness significant growth during the forecast period. The womens segment held the largest share of the US online fashion retail market. The factors contributing to the growth of the segment include the growing influence of social media and increasing celebrity endorsements for products such as women apparel, footwear, bags, and accessories. In recent years, due to the increasing disposable incomes of consumers, the demand for luxury, premium, and high-fashion womens fashion products has increased in the US.
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The women segment was the largest segment and was valued at USD 65.52 billion in 2017. Additionally, due to the growing female participation in the workforce, leading fashion retail brands in the US are focusing on launching new formal wear product lines. Women's work clothes have been the domain of certain brands in the US. Further, the company's products are composed of organic materials and nontoxic dyes and are free of polyester, nylon, and polyamide materials. These factors will contribute to the growth of the market segment during the forecast period.
The market report forecasts market growth analysis by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017-2027.
The market is a dynamic landscape driven by various factors. With changing consumer trends and increased digitization, brands and retailers are embracing advanced technology such as artificial intelligence (AI) and machine learning (ML) algorithms to enhance customer shopping experiences. This online apparel market caters to a wide audience, including men's and working women's apparel, childrenswear, and footwear categories. Convenience and accessibility play crucial roles, especially with the pandemic prompting social distancing measures and a surge in online sales with target marketing.
Further, the global expansion of online apparel retailers, apparel manufacturers, and e-commerce adoption further fuel market growth. Fashion trends and new patterns drive consumer interest, while sustainability and ethical shopping become increasingly important for environmentally conscious and ethically minded shoppers. Despite challenges like supply chain disruptions and rising advertising costs, the online apparel market continues to thrive, offering wide product selections, product Innovations, and personalized recommendations through brick-and-mortar stores to cater to trend-conscious shoppers, internet shoppers, and tech-savvy shoppers worldwide.
Market Scope |
|
Report Coverage |
Details |
Page number |
136 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 13.31% |
Market growth 2023-2027 |
USD 192.68 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
12.61 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Adidas AG, Amazon.com Inc., ASOS Plc, Backcountry.com LLC, Costco Wholesale Corp., Forever21 Inc., Industria de Diseno Textil SA, Nike Inc., Nordstrom Inc., Penney OpCo LLC, PVH Corp., Ralph Lauren Corp., The Gap Inc., Under Armour Inc., and Frasers Group plc |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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