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The US online fashion retail market size is forecast to increase by USD 294 billion at a CAGR of 16.82% between 2023 and 2028. The market is experiencing robust growth, driven by several key factors. The surge in online spending represents a significant trend, with consumers increasingly relying on digital channels for their fashion needs. Flexible deferred payment methods, such as installment plans and buy now, pay later options, are also contributing to market expansion. Furthermore, the continuous expansion of e-commerce platforms, offering a wide range of brands and styles, creates a dynamic landscape for consumer transactions. These elements collectively foster a professional and convenient shopping experience, making online fashion retail a promising sector for substantial growth.
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The market is experiencing significant growth, with clothing, shoes, and accessories leading the charge. Tech advancements have played a pivotal role in the expansion of fashion e-commerce, enabling digital shelf analytics and enhancing the shopping experience. Apparel and footwear brands are increasingly embracing digital channels to reach their customers, with non-fungible tokens (NFTs) and influencer-based live streaming becoming popular trends. The fashion segment, including luxury fashion, is also capitalizing on this shift, catering to the digital demand of Gen Z and millennials. Online businesses are leveraging social media marketing and Worldpay for seamless transactions. The fashion industry's leaders and executives are focusing on adapting to the changing shopping patterns, with athletic apparel and loungewear seeing a surge in popularity. Overall, the online fashion retail market is transforming the way we shop for clothes, shoes, and accessories. Our researchers analyzed the market research and growth data with 2023 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 market growth analysis 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.
Adidas AG: The company offers online fashion retail products such as Pureboost 23 Running Shoes, AAC Shorts, Graphics Cloudy Trefoil Tee, Trefoil Essentials Tee.
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 73.6 billion in 2018. 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 provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Online retail sales in the Fashion segment have witnessed significant growth in recent years, with Clothing, Shoes, and Accessories leading the charge. Tech advancements have played a pivotal role in the growth of Fashion e-commerce, enabling features like Digital shelf analytics and Hyper personalization. Apparel and Footwear brands have embraced the digital transformation, offering their products on various digital platforms. The Millennials and Gen Z demographics have been key drivers of this trend, with their preference for Mobile commerce and Digital wallets. Sustainability is also a major focus, with the Resale ecosystem gaining popularity. Subscription clothing boxes have emerged as a popular trend, with App downloads indicating a strong consumer base. Jewelry, Watches, and Luxury goods have also joined the bandwagon, with Tech advancements enabling the sale of Non-fungible tokens (NFTs) and Digital fashion. Fashion leaders and executives have recognized the importance of Omnichannel retail and Data analytics for transparency and traceability. Social media marketing, Influencer-based live streaming, and Tech innovations like AI and AR have further fueled the digital demand for fashion. Online businesses are continuously striving to provide a seamless shopping experience to their customers.
Market Scope |
|
Report Coverage |
Details |
Page number |
143 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 16.82% |
Market growth 2024-2028 |
USD 294 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
13.99 |
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., Frasers Group plc, Industria de Diseno Textil SA, Nike Inc., Nordstrom Inc., Penney OpCo LLC, PVH Corp., Ralph Lauren Corp., The Gap Inc., and Under Armour Inc. |
Market dynamics |
Parent market analysis, Market forecast, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Product
8 Customer Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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