US apparel and accessories sales growth are poised to increase by a steady 20 per cent over the next four years compared to less than 10 percent just six years ago, according to a CNBC report citing a Goldman Sachs studying profiling consumer trends in America.
"This means an additional $50 billion of sales will migrate online over the next four years, a revenue base equivalent to apparel and accessories sales for Macy's, Nordstrom and Kohl's in all channels combined," the report said. "At that rate, online penetration of the apparel and accessories category will reach 25 percent in four years, with further adoption across the age and income spectrum," it said.
According to the research, older millennials (ages 25 to 34) are more likely than any other generation to spend most of their clothing budget online. Separate data collected by the firm over time has found the online spending habits of 35- to 44-year-olds lagging this group by about one to two years, and those between ages 45 and 54 trailing by another two or three years.
The research found that nearly 35 per cent of millennials already spend most of their apparel budget online. That compares to roughly 30 per cent for those between ages 35 and 44, and closer to 15 per cent for those between 45 and 54.
Goldman's report last week comes one day after a separate study by UPS and comScore found that for the first time in its five-year history, "avid" online shoppers — who make two or more purchases online in a typical three-month period — completed more than half of their purchases on the web during that timeframe.
Similarly, UPS found that millennials complete on an average 54 per cent of their purchases online. That compares to 49 per cent for non-millennials.
Young adults are also spending more on their smartphones than their older counterparts, UPS found. Whereas 63 per cent of millennials said they've bought an item on their smartphone, only 41 percent of Gen Xers and 19 per cent of baby boomers said they had done the same. This growth is notable given mobile's robust revenue gains during the latest winter holiday season.
Yet millennials aren't the only segment expected to power the next phase of online apparel shopping. Goldman also lists the influence of affluent consumers; improvements in digital technology; and, of course, Amazon's expansion into this category as likely contributors.
Indeed, online sales trends have slowed at many traditional retailers, with Forrester saying earlier this year that Amazon's domestic retail business accounted for some 60 per cent of overall digital revenue growth between 2014 and 2015.
Apparel continues to be the leading category for overall online spending, according to comScore. But Goldman's research underscores that even as online shopping matures, making way for fewer new adopters, consumers are allocating more of their money toward the web.
According to the US Commerce Department, online sales increased 14.6 per cent in 2015, compared to growth of 26 per cent a decade earlier. Even as the web steals sales from physical stores, it still accounts for less than 10 per cent of overall retail spending, according to government data. (SH)
Fibre2Fashion News Desk – India