Consumer Trends in Clothing and Apparel in the United Kingdom and the United States

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The coronavirus pandemic has had a significant impact on the Clothing and Apparel sector in both the UK and the US. In March, millions of people stayed at home to reduce the transmission of the virus. This occurred as cases surged in both the United Kingdom and the United States. The crisis has negatively impacted several industries such as the travel and tourism and hospitality sectors.

How has the UK Clothing and Apparel industry been affected? 

The Clothing and Apparel industry is experiencing difficulties in the face of the COVID-19 crisis. However, traffic in the sector was in decline even before COVID-19. According to Shopify, 1,875 fashion retailers shut down in 2018, and 10,000 closures were forecast for 2019.

The lockdown spelt disaster for many clothing retailers. As millions of people spent the vast majority of their time indoors, clothing sales declined. In March, clothing sales plummeted by 34.8%.

Sales plummeted at the beginning of the lockdown as people spent less on non-essential items, saving the typical UK household £171 per week. Despite this, sales have been recovering over time. Despite this, sales are still far lower than they were this time last year. It is not just sales that are down; all areas of the industry are affected. The pandemic disrupted supply chains, and retailers closed their doors for several months. On top of this, demand for clothing declined as consumers stayed indoors and cut unnecessary spending. Lord Simon Wolfson, CEO of Next, said that “no one wants to buy clothes to sit at home in”. Search data demonstrates that the demand for more formal clothing declined sharply as the lockdown came into force.

UK search data for ‘dress’

Formalwear saw a clear decline in demand. Search demand for ‘men’s suiting’ saw a 79% drop from March to June 2020. Clothing related directly to events, such as festival outfits, saw an even steeper decline of 152% as there was mass cancellations of festivals across the UK.

In contrast to formal clothing, search data shows that the demand for loungewear has increased significantly as a direct result of the lockdown.

UK search data for ‘loungewear’

Many clothing companies attempted to take advantage of the situation by dedicating sections of their websites to staying at home. For example, UK retailer ASOS created a section on their website called ‘Staying in-in’, which includes loungewear, sweatpants, hoodies, and face and body care products.

Online sales

The majority of clothing sales in the UK are made in physical stores, even as the eCommerce market begins to dominate other areas of the retail sector. In December 2019, clothing sales made online increased to 18.5%. High street retailers, including clothes shops, saw a boom in online retail sales, with 30% of sales made via an eCommerce website. Despite this, the BBC reported that even clothing retailers with robust online offerings reported huge drops in sales overall.

Some UK retailers see a boost in traffic

Despite the overall drop in sales for clothing and apparel retailers, some have witnessed a boost in website traffic. MandM Direct, which sells reduced price labels for high street prices, saw a 12% increase in traffic from March to June compared to the previous year. Shoe retailer Footlocker saw a 15% increase in the same period. The retailer with the most impressive growth in traffic was Superdry, which has been struggling in recent months. UK consumers appear to be searching for clothing retailers that offer attractive deals on branded clothing, rather than buying from the brands directly.

Previously popular brands see a reduction in traffic

Brands that were previously popular with consumers saw huge drops in traffic from March to June compared to the previous year. For example, the department store Debenhams saw a devastating 33% drop in traffic during the period above. The retail group has been struggling financially for the last few years, and recently fell into administration for the second time. Debenhams has been in £600 million debt even before the coronavirus crisis began. As a result, the last few months have been extremely challenging.

Resellers perform better than own-label brands 

Both resellers and own-label brands have suffered due to COVID-19, however, former have fared better than the latter. ASOS, MandM Direct, Footlocker and Farfetch have seen 11% growth pre-COVID and -9% growth during COVID. Own-label brands such as Next, Boohoo, New Look, and H&M saw -1% growth pre-COVID, and -13% growth during COVID. The difference may be attributed to differences in price, as reseller brands sell clothing at significantly reduced prices. These reductions may attract consumers who are being more careful with their money during a time of economic crisis. Own brand labels are also attempting to attract consumers by offering sales with significant price reductions, both online and in-store.

Recovery is expected in the UK clothing and apparel industry, as restrictions continue to ease, allowing clothing retailers to open their doors and begin selling items from physical stores once again. May saw a significant increase in traffic to clothing sites, signalling a gradual recovery.

How has the US Clothing and Apparel industry been affected? 

The US is currently experiencing a second wave of coronavirus after states started reopening in late April. There are over 4 million confirmed cases and over 150,000 deaths since the crisis began. The situation does not appear to be improving but worsening. This will surely have an effect on all areas of the retail industry, including clothing and apparel.

Before COVID-19, the United States had a booming clothing and apparel industry. The apparel market was estimated to be worth approximately $368 billion in 2019. Store-based retailing was valued at $268 billion, while eCommerce sales made approximately $100 million in revenue. 

Similar to the UK, the Clothing and Apparel sector in the US has seen overall product demand falter in recent months. The good news is that the sector is recovering. Clothing and apparel was growing by 12% pre-COVID but is now shrinking with -12% growth due to the pandemic. By the end of March, 30 states had announced stay at home orders to try and limit the spread of the virus. As a result, search demand increased for affordable, comfortable clothing such as house slippers.

As many states are open and life is mostly returning to ‘normal’, despite rising case numbers, it is expected that sales for formal wear such as dresses and high-quality will increase in the coming months. During the COVID months from March to June, traffic for search variations including the term ‘dress’ saw a significant decline in traffic. From July 2019 – February 2020, formalwear terms had been receiving growing numbers of traffic. This demonstrates that the implications of the virus have directly affected the traffic that formalwear receives.

Despite the reduction in traffic to formalwear websites, this area of the apparel market will recover in the US if states remain open.

Some well-performing brands have witnessed a boost during the pandemic

Similar to the UK, some brands have experienced increased amounts of traffic during the COVID-19 crisis. Skechers saw a 128% year-on-year increase from March to June, athleisure brand Fabletics saw a 45% increase in traffic from March to June compared to the previous year. The increase can be partly attributed to large discounts on collections that are popular with consumers.

Brands with already poor growth figures have been impacted adversely by the pandemic

Brands such as JC Penney, Victoria’s Secret, Fashion Nova, and Express have seen traffic continue to decline due to COVID. Pre-pandemic, the above stores saw traffic reductions of between 1 and 8 percent between July 2019 and February 2020, when compared to the previous year. During the coronavirus months from March to June, the above brands saw significant reductions in search traffic, ranging from -18 to -24 percent. 

The US apparel sector sees traffic grow as restrictions ease

Despite stay at home orders in the majority of states over the past few months, the clothing and apparel sector has seen limited impact during the COVID months. The expectation is that the market will recover once restrictions ease further. As many states began to reopen in May, the sector saw a significant increase in traffic, signalling recovery. While this has reduced slightly throughout June, the slight drop is not particularly concerning. The sharp increase observed in May can be attributed to pent up demand as physical clothing shops opened their doors.

Is investment in the clothing and apparel industry recommended?

While 2020 has been a turbulent year for all industries, investment in the right clothing and apparel business would be wise. As people spend less time in their homes, and more shops reopen, both traffic and sales will increase significantly. The US and China stand above other countries when it comes to the value of their clothing markets. Their combined markets represent 42% of all spending on clothes globally. 

Invest in a business that has the right business model. If a second wave occurs, businesses with a robust online presence and affordable prices are in a better position. Online sales of clothing continue to grow year-on-year, and it would be wise to invest in a company that is actively growing their eCommerce offering to accommodate their customers. Consumers want easy, quick access to affordable clothing, and companies need to comply if they are to succeed.

Read our range of articles and reports to find out more about which industries you should be investing in.