Despite the easing of inflation, the fashion industry remains impacted by supply chain disruptions, high interest rates and geopolitical uncertainties, leading to modest global growth and uneven performances by region, category and channels. E-commerce is anticipated to outperform offline channels, but these remain crucial due to the unique advantages of physical spaces. Market players are thus building their omnichannel capabilities and investing in AI to enhance the shopping experience.
This report comes in PPT.
Although inflation eased in 2023, supply chain disruptions, high interest rates and geopolitical uncertainties continued to impact business and consumer confidence. The industry nevertheless returned to growth in 2023, with a 2.6% increase in constant terms over 2022, but has still not recovered to pre-pandemic levels.
The share of e-commerce has stabilised at around 31% since 2021, driven by consumers’ ongoing preference for the convenience of online shopping and the saturation of e-commerce in key regions. Offline channels remain crucial, accounting for 69% of the market, as in-store experiences, such as try-ons, repairs and brand engagement, are still irreplaceable.
In-store shopping’s unique value lies in experiential elements, such as discovering new trends, interacting with staff and accessing services like repairs. Brands and retailers are focusing on creating distinctive in-store experiences to attract customers back to physical stores and foster stronger connections with their local communities.
With the stabilisation of e-commerce, the focus of e-commerce development has shifted towards improving online services to retain customers. Companies are increasingly concentrating on enhancing digital engagement, delivery and fulfilment, and personalised experiences, leveraging various AI tools to drive customer retention and revenue growth.
With the current technological advancements, especially the growing use of AI, customer engagement and loyalty are being transformed. This will accelerate in future, as brands and retailers expand and update their loyalty initiatives, and consumers increasingly accept the role of technology in their lives.
Apparel is the aggregation of clothing and footwear. This dataset covers retail sales of apparel through both store-based retailers and non-store retailers. Excludes black market sales (i.e. untaxed, generated within informal retailing)and duty free sales (travel retail). Items must be new when sold to the consumer; second-hand/used items are excluded. Antique and/or vintage clothing and footwear is also excluded.
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