Are Rentals Wrecking Retail? 3 Major Shifts in Apparel to Watch

Apparel sales, especially in women’s clothing, are undergoing a change, and not just one of styles, trends and seasonal collections. Women, especially those in the Gen X and Baby Boomer demographic, are buying less and spending less. Off-price stores are growing in popularity, whether they are the discount version of legacy department stores such as Macy’s Backstage and Nordstrom Rack, or mass market stores like Marshall’s and TJMaxx. Shoppers in this group are looking at price ahead of designer labels.

Here are 3 major shifts in the retail apparel space that smart brands are watching:

• While 90% of all retail sales happen in brick and mortar location, e-commerce is becoming a major factor. While the need to try on clothes, and touch and feel items for quality and fit is especially important in apparel, the growth in e-commerce needs to be acknowledged. In 2017, 27.4% of U.S. apparel sales happened online, up from 23.5% in 2016 and 20.7% in 2015. The sales floor is ground zero for your brand, make it work.
• Retail sales of apparel, overall, are down, but it’s important to look closer. While department stores have seen record closings, mass market and off-price stores are doing well. Today’s shopper is buying less, and looking to spend less, so the “where” of your brand matter just as much as the “wear.”
• Rentals are here to stay, even in brick and mortar. Fashion rental company Le Tote has purchased the iconic department store Lord & Taylor. Macy’s, Ann Taylor and Urban Outfitters are looking to explore a rental option for their brands. It could be a case of “If you can’t beat ‘em, join ‘em” because the numbers for the rental market are significant. According to data analytics firm GlobalData, the rental subscription market was valued at around $1 billion in 2018 and is expected to grow more than 20% a year, reaching $2.5 billion by 2023.

When you look at the retail apparel picture, there’s a lot going on. What’s up now could be down in the next quarter, just like that trendy shirt you bought 6 months ago is now so over. ThirdChannel has solutions that include a combination of data analysis, merchandising & inventory solutions, dedicated Brand Reps, and much more. Check out some of our work and see if it’s a fit for your brand.