NPD Group: Millennials, Athleisure, and E-commerce Continue to Drive Apparel Sales, But Growth Has S

Millennials, athleisure, and e-commerce continue to be the brightest spots in the U.S. apparel industry, though they lost some of their intensity in 2017, reports The NPD Group, a leading global information company. This slowed momentum among the industry’s key sales drivers, combined with declines in other segments, resulted in $215 billion in U.S. apparel sales in 2017, a 2 percent decline in from 2016.​

“The apparel industry is being challenged to respond to the latest changes being driven by the broader consumer and retail environment, “said Marshal Cohen, chief industry advisor, The NPD Group, Inc. “The rapid pace of change in Millennial consumption is one major change that points back to the importance of evolving consumer segmentation. The future of the apparel business depends on manufacturers and retailers refocusing on the current needs of each critical consumer segment.”

In 2017, Millennials had the highest apparel growth rate of all generations at 4 percent, representing $2 billion in incremental sales. However, even the growth among this powerhouse has slowed from the double-digit increases seen over the past two years. Despite the slower growth rate among both Millennials and Gen Xers, they were the only generations with increases in apparel dollar sales in 2017. Baby Boomers, who account for nearly 20 percent of annual apparel dollar sales, and Gen Z, who generated almost a third of total apparel dollar sales, both experienced declines in overall spend for the year.

The athleisure movement and influence on fashion continues to be a primary driver of growth opportunity for the industry. Non-activewear sales declined while activewear apparel continued on its growth trajectory in 2017, although not making as steep a rise as in past years – dollar sales increased 2 percent to $48 billion, which amounts to 22 percent of total industry sales. Sales of both men’s and women’s activewear grew in 2017, but women’s supplied much of the energy behind the category’s growth, reaching $21.9 billion in sales with a 4 percent increase over 2016.

E-commerce also remains a driving force at retail as in-store apparel sales have declined, but brick-and-mortar still represents more than three-quarters of annual industry dollars. E-commerce has had a relatively slow progression in apparel compared to other industries, from 16 percent of sales in 2014 to 21 percent in 2017.

In 2017, online apparel sales grew just 4 percent from the prior year, following double-digit growth in the prior two years. According to e-commerce insights from NPD’s Checkout, which is based on information collected from more than three million consumers through data provided by our partner Slice Intelligence, the purchase frequency of online apparel consumers increased in the last year, but they spent 5 percent less per receipt*.

“Categories like active apparel bottoms, undershirts, and swimwear – which indicate the consumer’s concentration on comfort, the staples, and niche products – are the few sources of consistent, long-term growth in today’s apparel market,” added Cohen. “Retail is changing, the consumer is changing, and every industry must understand where spending habits have moved, and adapt to the shifting market dynamics that are impacting their business.”