The COVID-19 pandemic was a challenging time for most businesses, including the fashion industry. While this sector began to recover gradually in 2021, it wasn't until 2022 that customers returned to active shopping. But has it really managed to recover to the pre-pandemic level and what are the prospects of fashion e-commerce in the coming years? In this article, we will explore current trends and tendencies in the fashion market and outline possible challenges to the industry. Brief overview: 2023 in numbers 2023 is poised to be a less positive year for the fashion industry. In the first half of 2023, Americans spent less on fashion by 20%. According to , the number of online orders fell by more than 15% in January-April 2023 compared to the same period last year. Admitad’s research The average purchase price was also down 7% to $157. The main factor for the decline may be the general economic recession, which is forcing shoppers to cut back on additional purchases. On a worldwide scale, the situation looks somewhat better. In 2023, the global apparel market is projected to reach an impressive value of $1.7 trillion, demonstrating a year-over-year growth rate of 13.7%. The most lucrative market for the fashion industry is China, with a market volume of over $226 billion in 2023. projected To sum up, despite the projected global growth, many US retailers are seeing a distinct negative trend in fashion consumption in 2023. Inflationary pressures, geopolitical instability, disruptions in the global supply chain, and the surge in energy prices are among the key factors impacting the industry's trajectory. Sales from a wide range of sources When analyzing the most efficient sales channels, some traffic sources were particularly effective at generating sales for the fashion industry: In general, US customers did not deviate from these global trends, although there were some interesting and notable local nuances. The share of orders made with the help of content platforms turned out to be several percent higher than the global average. Americans' time online was higher during the pandemic years than ever before. US customers also used the coupons twice as often. Сontextual and targeted advertising was more effective for local brands. On the contrary, advertising through mobile applications brought in only 1,5% of all orders in the region - much below the worldwide average. Although, it is important to note that fashion orders through it have doubled in a year - meaning this channel is rapidly catching up with global figures. Affiliate stores became the record holders in terms of fuelling growth as well, increasing order flows by more than 15%. The rise of second-hand clothes e-commerce The second-hand fashion market experienced dramatic growth during this period, with resale sales in the fashion segment increasing by 24% globally in 2022, and expected to continue growing at a rate of around three times faster than regular sales. As consumers become increasingly conscious of the environmental, social, and economic advantages of thrift shopping, the market for used clothing is poised to experience significant growth, potentially outpacing the fast fashion industry. According to a recent report by thredUP, an online consignment and thrift store, the global second-hand apparel market in 2026. is expected to reach $228 billion Gross Merchandise Value increases While the overall increase in gross merchandise value (GMV) is generally seen as a positive for the fashion industry, one main contributor to it casts some doubt: namely, inflation. Inflation played a significant role in the average order value in fashion e-commerce, with average order prices increasing from $45 to $74 throughout the year, although this factor did not have as significant an impact on the US market, with the average order value remaining steady at $220 throughout this period. In fact, the US boasted the highest global AOV for 2022: Economic uncertainty fuels partner marketing boom Throughout 2022, the fashion industry experienced a period of great economic turbulence, with rising costs for manufacturers across the globe. Under these conditions, brands and marketplaces were forced to become even more cautious with their marketing spending. Looking for ways to secure their revenues and acquire new customers, the fashion industry turned towards performance marketing. According to , in 2022, the number of American brands and marketplaces using their channels to attract sales increased by 45% (as opposed to 23% worldwide.) Admitad The number of internet audience owners and traffic specialists ready to work with brands on partnership terms (for rewards from orders placed) grew to coincide with this. In the US, their number increased by 37% during the year, and their profit by 21%. Final thoughts The e-commerce segment played a significant role in the growth of online fashion retail during the pandemic years, further popularizing online shopping. However, as we delve into the numbers for 2023, it becomes evident that the fashion industry is heading toward a challenging period. As the industry navigates through this challenging landscape, it becomes crucial for fashion businesses to adapt, innovate, and embrace strategic measures to overcome the prevailing recessionary headwinds.

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Fashion E-commerce in 2023: Heading for a Recession?

Too Long; Didn't Read

Alex Lashkov

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Fashion E-commerce in 2023: Heading for a Recession?

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