According to the Bureau of Labor Statistics, apparel was the only spending category that declined (1.3%) from the year ending June 2016 to June 2017. Meanwhile, spending on categories like entertainment and eating out, which would fall under experiences, were up 1.1% and 6.2%, respectively.
February 2018 research from Pymnts.com showed millennials make twice as many annual apparel purchases than boomers. The amount spent per transaction rose with age: $101.1 for millennials, $160.5 for Gen X and $172.6 for baby boomers, yet boomers spent the least annually ($1,389), Gen X the most ($2,367) and millennials in the middle ($1,950).
When asked about a favorite merchant, 73 retailers were cited. Pymnts broke out the top ten, and the remaining were classified as “other,” which roughly one-third (32.8%) of consumers chose. Amazon, which has been attempting to become a fashion destination, had the largest single share (14.0%) followed closely by Walmart (12.5%). What’s more, Amazon had the most shoppers who said they shopped there because of good selection and Walmart won on price.
This long tail of favored apparel retailers was also apparent in a January 2018 Coresight Research survey. When US internet users were asked about where they had purchased clothing or shoes in the past month, “other” was the top answer (44.3%). Walmart (41.8%) and Amazon (37.4%) also ranked in the top spots, but in the reverse order from Pymnts.
What this means is that the market is fragmented outside of the top ten biggest fashion retailers. There are countless merchants vying for the shrinking dollars spent on apparel.
Retailers have been attempting to transform the customer experience and trying everything from serving drinks to hosting events with social media influencers, but according to the survey virtual reality demos and in-store entertainment isn’t what matters most. More than a quarter (28.6%) said they had no interest in these consumer experiences. The most influential consumer experience (26.8%) was that online and in-store were well coordinated, in other words, a seamless omnichannel experience. For new experiences, the ability to scan and pay with their phones was the most attractive (6.8%), a feature that Macy’s introduced this year.
It turns out that the aversion to in-store experiences is mostly an older consumer attitude, lending credence to the idea that this is a preference among younger shoppers. Close to half of boomers (46.9%) were uninterested in in-store experiences compared to 16.8% of millennials. Expect to see more retail pop-ups and augmented reality experiments in the foreseeable future.
Courtesy of eMarketer