GROWTH CULTURE: DECODING THE SHIFTS IN FASHION & INTIMATES

It was wonderful to see Circana analysts Todd Mick and Kristen Classi-Zummo for a Zoom webinar where they shared the latest in the fashion industry with The Underfashion Club! Kristen is an Apparel Industry Analyst and specializes in assessing the overall performance of the apparel sector while Todd is an Intimates Industry Analyst and is able to dig deep into the implications these trends have on the intimate apparel industry. Thank you both for consistently delivering enlightening and cutting-edge information to the Club, equipping professionals and students alike with the knowledge necessary for moving forward in this fast-growing and competitive market.

The current state of consumer spending is complicated, with debt accumulating and savings dwindling. Prices are higher than ever, causing consumers to trade down in certain areas. There are global distractions, such as this being an election year which tends to impact retail and apparel. We are continuing to see a challenged demand cycle when it comes to apparel purchasing. In the face of all these headwinds, there are clear tailwinds that propel consumers to continue to spend. Splurging is happening, though strategically.

A look at all of the industries Circana tracks shows how consumer spending is evolving, illustrating how the share of wallet has been shifting. The fastest growing industry is Media Entertainment, driven by box-office hits like Barbie and Oppenheimer, knocking Prestige Beauty from the #1 spot. Cultural moments such as the Super Bowl have a halo impact on spending, inspiring apparel purchases to support teams, and prompting subscriptions.

Apparel spending in 2023 declined by 4% compared to 2022, but remained higher than pre-pandemic 2019. Post-pandemic 2021-2022 showed a surge in apparel replenishment as people were stepping out to get vaccinated and shopping while they were at it. Units of clothing sold was down 7% in 2023 vs. 2022, which is only 6% higher than quarantine year 2020. Prices are higher than ever, causing consumers to forgo replenishing apparel and stick with what they have purchased in the last two years. The average selling price of apparel is up 3% in 2023 vs. 8% in 2022, indicating that inflation is cooling-off.

Every generation declined in apparel spending, though Gen Z and especially Millennials made up over two-thirds of the losses. Consumers are holding back on buying apparel and are making other discretionary purchases. Millennials have been spending more on matters related to home ownership. This generation is entering a new life stage and while the demographic continues to splurge, they do have other necessities that they are paying for. Think of how you are leaning into convenience and catering to your customer’s changing lifestyles. These opportunities exist for Millennials and it’s really up to the right brands to activate them.

In spite of the overall decline in apparel, there are some glimmers of hope. While comfort has been the dominant trend for the past few years, we are beginning to see a return to style. Circana anticipates growth in apparel related to overt style such as jeans, skirts, dress shirts, and bodysuits. There is also a forecast for growth in women’s intimates in 2025! Comfort will remain an underlying force behind upcoming fashion trends, polished with newness and color for a fresh and refined look.

Intimates has performed about as well as overall apparel but lost a bit of share in 2023, down 4.6% since 2022 vs. the 3.4% of overall apparel. Women’s skirts/skorts as a category has shown the most growth, driven by new cuts and flares that have been inspiring replenishment to stay current. Newness is key in driving apparel sales and bottoms, as a category, have been seeing some interesting changes recently.

Overall intimate apparel demand is settling into more normalized levels. Bras sales have fared better than panties recently, primarily because sports bra replenishment is kicking in. It is predicted that these graphs will read as flat in the years to come as intimates is a mature business. Future business goals should be to take over shares from retailers and other competitive brands within the intimates space.

There has been new innovation in sports bras, which is reflected by it being the only intimates category to see overall growth in 2023. Athletic brands are acting much more like designer bra brands with elevated aesthetics such as delicate straps, focusing less on performance. Shapewear has declined by 14% as it is a special occasion garment that doesn’t require frequent replenishment. This statistic is also affected by the fact that shapewear’s average selling price is down overall.

Smaller players in the intimates industry are showing the most growth. Much of this has to do with convenience and the availability of variety in assortments. Specialty stores are losing share as big players in the intimates space are on the decline. Growth in the market is seen only in the lowest and highest income groups, showing business opportunities for value and high-end apparel.

How can brands grow in a down market? Focus on bringing in new buyers! A theory that was showcased in 1970 and is still as relevant as ever highlights the importance of tracking consumers over time and analyzing how their behaviors are evolving. Notice how they are switching between brands/retailers and recognize that brand loyalty is largely a myth. The key is to bring in more new customers than those you are losing. Intimate apparel brands that grew have focused on diversifying their assortments, expanding their customer’s wardrobe in the intimates shelf.

The average consumer is buying less often and spending less, so bringing in new customers is the current viable strategy for growing business. Bring your brand to the channels that your customer is at, such as Amazon and warehouse clubs. Merging the realms of comfort and beauty in your garments meets the values of the modern consumer and can attract new buyers to your brand. Expanding your merchandising assortment is also key for growth in this tough market!

Watch the full webinar on YouTube!