Christian Chensvold, Deputy Editor | Tuesday, March 12, 2024
One of the important balancing acts in life is the constant war between wants and needs. As 2024 accelerates, consumer habits that were evident during the holiday shopping season continue to emerge.
According to recent reports, circanais a leading advisor on consumer behavior and a trusted source of information for 7,000 brands and retailers, but consumer spending is rooted in necessity and practicality rather than desire and luxury.
But one non-essential category has shown significant growth and is starting to “eat the lunch” of the apparel sector, according to Kristen Crassi-Zumo.of california apparel news asked Circana's Apparel Industry Director and Industry Analyst for his economic outlook on the apparel industry and the apex predators taking away consumers' closely guarded purchasing power.
can: What are your key takeaways from the holiday shopping season?
KC-Z: Overall retail declined, and apparel followed a similar trajectory in dollars and units. There's less of a sense of crisis, and we're not seeing the innovation that I've been talking about for a while. It started about a year or two ago, with excess inventory and bottlenecks from the pandemic resulting in the same thing hitting stores for several seasons in a row, especially in activewear and loungewear. Although the inventory problem is now calming down, there is still a lack of new trends and styles that will encourage consumers to buy apparel.
can: Given that the economy is like fashion itself, and therefore unpredictable, what strategy would you recommend?
KC-Z: The apparel industry needs to learn from all of this. Brands and retailers that are serious about focusing on trends, whether it's completely new innovations or positioning their products in a new light, continue to win. We're not in a total recession, so consumers are spending money, but they're being very careful about where they spend it. And with limited spending, we are forced to make difficult choices. In this environment, brands and retailers need to check all the boxes.
can: What is the health of the apparel industry, high and low?
KC-Z: Within apparel, one channel is outperforming. It's off-price, which has been doing well throughout the last year. I don't see consumers switching to private label because brands still have power. They're just looking for a more affordable way to buy. We're also seeing the growth of warehouse clubs like Costco. Although Costco is a small part of the industry, it continues to grow. Consumers can purchase their favorite national brands at affordable prices.
can: Your research reveals that one industry adjacent to fashion is on a growth curve, and apparel companies should take note.
KC-Z: Yes, of all general merchandise categories, prestige beauty was the retail category with double-digit growth in Q4 2023. In this environment where everyone is held back, the beauty field, which is a non-essential item, continues to grow faster than the market. They have so many things going for them: newness, new brands, huge excitement on TikTok, and younger consumers investing in the category. This just goes to show that if you do it right, you can expect growth.
can: It seems like today's young people don't enjoy expressing themselves through fashion as much as they did in past decades.
KC-Z: My personal perspective when I go to a very famous shopping mall is, “Oh my god.” All teenagers are wearing pajamas, sweatpants, and slippers! ” So I agree. But I think they're also interested in fashion. They're just choosing. As adults, we've embraced comfortable clothing, loungewear, and working from home, and they grew up with it. When we were kids, we expressed ourselves through what we wore, but now there are so many ways to express ourselves, and beauty is one of them. I always talk to my clients about how the beauty industry is eating our lunch. If a teenager had his $50 to spend on himself, 10 or 15 years ago most of it would have been spent on apparel. Now it's a beauty, and it was actually born on TikTok. As a result, Gen Z's status symbols have shifted from high-end fashion and accessories to more affordable beauty products and everyday items.