Retail Shifts in Latin American Fashion

Delivery

This report comes in PPT.

Key findings

Fashion sales in Latin America returned to pre-pandemic levels

The Latin American fashion industry was hit hard by the pandemic, with sales declining sharply by 33% in 2020. Following two years of strong performance, sales surpassed pre-pandemic levels. However, most of this growth is driven by price increases due to inflationary pressures across the region, as volume sales remain below or flat compared to those in 2019.

Latin American consumers prefer to buy their fashion items in-store

E-commerce gained relevance since the pandemic, but Latin America is still the region with the lowest percentage of consumers who purchased fashion through this channel in 2022. Latin Americans are more inclined to buy fashion in-store, “seeing or trying before buying” and “immediate purchase” are the key motivators for this preference. Differences exist among generations, as Millennials are more inclined to buy online than the average.

E-commerce is the big winner of the pandemic shift, but stores recovered ground afterwards

The pandemic benefited sales through e-commerce, turning this channel into the second largest for the fashion industry in the region. Return to normality brought consumers back to the stores, but not all channels saw sales reach pre-pandemic levels. Among top channels, specialists recovered the fastest, but department stores remain below 2019 levels. Both face another challenging year in 2023, due to worsened economic conditions in the region.

Omnichannel is just the starting point

Retail channels are no longer only a functional system of the supply chain, instead they turned into a holistic and integrated network that must be focused on creating value for consumers. Omnichannel is just the beginning; fashion players should make their decisions with consumers’ needs in mind, using technology in their favour, and understanding that nowadays their role goes beyond the pure transactional aspect of selling goods.