WarehouseOS Addresses Apparel Online Growth


No longer is brick and mortar retail versus online in the apparel sector; a combination of online, omnichannel, and brick and mortar retailers are represented in the data above. The graph shows U.S. revenue generated with online apparel and accessories retail sales between 2016 and 2022. In 2016, retail e-commerce revenues from apparel and accessories sales amounted to 72.13 million U.S. dollars and are projected to increase to 116.3 million U.S. dollars in 2021.

Worldwide, the e-commerce fashion industry is even more dynamic according to Shopify.

Indeed, Women’s Wear Daily reported that last year, more than 1,875 fashion retailers shut down. This year, projections place the number at just under 10,000, “up 53 percent from the number of doors that went dark amidst the Great Recession in 2008.”

Digital innovation, rising globalization, and changes in consumer spending habits have catapulted the fashion industry into the midst of seismic shifts.

Threats to Established Brand and Receptivity to New, Fresh, and Dynamic Apparel Companies

The biggest threats to established brands include the death of brand loyalty due to market fragmentation, the cost of combating return rates as high as 50 percent, fashion companies’ ability to manufacture styles on-demand, and pressure from consumers to use ethically sourced and green manufacturing materials.

Buying Power in the Apparel Industry

Fashion consumers will also have more buying power, as the number of potential customers is projected to grow to more than 1.2 billion by 2020. The good news for fashion businesses: most of these new consumers are within the 16 to 24 and 25 to 34 age groups.

In eMarketer Retail, journalist Krista Garcia concluded earlier this year that apparel is one of the most popular retail e-commerce product categories, and online sales are growing faster than offline.

A recent Morgan Stanley report predicted that Amazon will become the top U.S. apparel retailer in 2018, after growing its market share by 1.5 percent last year. It is true that online retailers and off-price stores have hit the traditional channel for apparel—department stores—hard. Per Morgan Stanley, department stores will account for just 8 percent of the apparel market by 2022, down from 24 percent in 2006.

eMarketer projects that U.S. retail e-commerce sales of apparel and accessories will increase 14.5 percent to reach $103.66 billion in 2018, making up 19.7 percent of total retail e-commerce sales. That makes it the largest single product category, responsible for $26.01 billion more in sales than the next category, consumer electronics. Apparel’s digital growth will slow to 12.5 percent in 2022, when sales are expected to hit $170.52 billion. For comparison, overall U.S. apparel sales shrunk 2 percent in 2017, per The NPD Group.

All these data make it clear that progressive, forward looking, and dynamic solutions like WarehouseOS® are uniquely positioned to address the fast-growing apparel industry.