–News Direct–
Fast fashion continues to gain traction in the U.S. market while luxury spending takes a hit, possibly as a result of shrinking disposable income, according to recent data from Consumer Edge (CE), a provider of global consumer transaction data.
In the U.S., one of the largest markets in the world for fast fashion and luxury shopping, spend on fast fashion grew 2% compared to the same period last year, according to CE data. This is a sharp contrast to spending in the direct-to-consumer (DTC) luxury industry where in 2023 spending was down over 7% compared to the nearly 15% increase in 2022.
Our data points to the challenging macroeconomic environment having a considerable impact on spending habits in 2023, said Michael Gunther, Vice President and Head of Insights at Consumer Edge. The bifurcated performance, with more affordable fast fashion increasing while luxury brands decrease, is likely because of a squeeze on real incomes. This dynamic logically plays out in the luxury sector where products tend to have a higher price tag.
Fast Fashion vs Luxury
One of the big winners in fast fashion in the U.S. is Chinese fast fashion giant Shein. The company continued to exhibit robust growth throughout the year.
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In the 10 months of 2023, Sheins sales increased by more than 20% compared to the same period in 2022
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Another winner in fast fashion was Uniqlo, which was up 28% in 2023.
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Shein now has the biggest share of fast fashion spend in the U.S. (c40%).
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One of the casualties of Sheins rapid growth appears to have been H&M, which has seen its share of U.S. spend decline by about 2ppts in the 12 months to November 2023.
Luxury bore the brunt of a relatively soft appetite for discretionary spend. Major brands, such as Louis Vuitton, Gucci and Burberry have all exhibited sizable declines in spend growth in 2023. Hermes, however, has been the bright spot in the industry; the brand has seen spend increase by close to 15% in the first 10 months of 2023.
Resilient Older Shoppers
CE data also showed that younger shoppers in the U.S. (younger than 35) appear to have had a decreasing appetite to purchase both fast fashion and luxury products compared to last year. This decreased demand could reflect lower discretionary incomes that leave them in a more challenged position to weather macroeconomic pressures.
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In 2022, 11% of shoppers aged 35+ in the U.S. purchased a fast fashion product. This has remained the same in 2023.
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In the luxury segment, 10% of shoppers aged 35+ purchased a product in 2022, while in 2023, the number stood at 9%.
The potential obstacle to the expansion of fast fashion in the U.S. arises if there is increased emphasis on sustainability, similar to the trend in France and Italy, where governments incentivize individuals to repair their worn-out clothing and footwear.
Insights Methodology
Consumer Edge highlights observed panel sales for its Fast Fashion and Luxury aggregates and top individual brands across the US and UK/EU. The Consumer Edge panel consists of US ~40M debit and credit cards.
About Consumer Edge
Founded in 2009 by CEO Bill Pecoriello, Consumer Edge is a data and insights as a service (IaaS) company delivering unparalleled views into global consumer spending behavior coupled with deep industry knowledge and analytical expertise. CE solutions provide key stakeholders across the corporate and investment landscapes with best-in-class tools to enable enhanced strategic decision-making. CEs unique capabilities allow for actionable insights driven by near real-time market intelligence and benchmarking at the brand, sub-industry and industry levels. For more information visit consumer-edge.com.
Contact Details
Kite Hill PR for Consumer Edge
Maggie Stasko
+1 724-787-1565
Company Website
View source version on newsdirect.com: https://newsdirect.com/news/consumer-edge-data-points-to-20-rise-in-one-fast-fashion-brand-luxury-takes-a-hit-911062708
Consumer Edge
COMTEX_445188394/2655/2023-12-19T09:05:54
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Sahyadri Times journalist was involved in the writing and production of this article.
