Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Clothing; Footwear
Executive summary
Macroeconomic Trends Impact Clothing and Footwear Sales
In recent years, both the clothing and footwear sectors in the US were
impacted by falling prices thanks to both cheaper imports from overseas and
continued retailer discounting to drive sales. 2006 saw continued price
deflation, which helped to dampen value growth. In addition, throughout 2006,
general economic uncertainty in the US, coupled with high fuel prices, rising
interest rates, and falling home values, made consumers reluctant to shop for
products at full price. These macroeconomic trends also had an impact on which
parts of the market performed better in 2006. Despite the economic uncertainty
many consumers were still willing to splurge on at least one item at the high
end of the market but eschewed traditional middle market retailers to purchase
basic items on the cheap.
Clothing Sector Shows Slower Growth
After seeing considerable strength in 2005, clothing sales saw slower growth
in 2006. Consumers, having grown used to a steady diet of sales-priced
merchandise, were largely unwilling to pay full price for products, and
retailers obliged by continuing to offer sales. A warm winter season also hurt
sales of cold-weather gear. While economic uncertainty tempered sales in
certain clothing subsectors, it spurred sales in others such as clothing
accessories, which consumers viewed as a less-expensive way to update their
wardrobes. Sales of children' s clothing also remained strong in 2006, as did
sales of more casual clothing items.
Footwear Sales Stagnate
In recent years, the US footwear industry was marked by stagnating sales.
Trends in 2006 were no different, with men' s shoes in particular showing
slower growth. Women' s footwear saw somewhat of a revival, with more women
considering shoes an essential fashion accessory and thus purchasing more
pairs than in the past. The past few years also saw the entry of many niche
players into the US footwear market, including companies like Crocs and
Heeleys, and the increased importance of crossover athletic styles. The
continued popularity of these new, innovative products, many of which can be
sold without resorting to price discounts, is likely to drive future sales in
the sector.
Traditional Players Face New Competition
Both manufacturers and retailers are facing new competitive threats in the US
market. Throughout the early part of the decade, traditional players like
department stores lost share to mass merchandisers such as Wal-Mart and
Target. While both are still significant players in the US clothing and
footwear market, the past few years saw a rise in popularity of specialty
retailers (such as H&M, Zara and Forever 21) that offer more fashionable
clothing at low prices. The success of these retailers, who offer products
under their own brand names, also cut into sales of traditional own-branded
retailers like Gap, and of manufacturers who sell their brands through
non-specialty retail channels. In part due to these changing trends in the
market, retailers are experimenting with merchandise mix and retail formats to
offer a new buying proposition to consumers.
Future of the Market Likely to be Driven by Demographic Trends
The Hispanic market is becoming increasingly important in the US as members of
this ethnic group gain purchasing power. Clothing and footwear manufacturers
are responding to this trend, which is likely to become even more important
going forward. Females over the age of 35 years also represent an important
group with significant purchasing power. Not content to let ageing equate to
dowdy fashions, they are demanding fashionable products that are made to fit
more mature bodies and retailers are responding. Finally, as consumers spend
more on designer clothing for children, this may lead to a new generation of
more style-conscious teenagers and adults in the future.
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