Channel Overview in Apparel and Footwear

Strategy Briefing

About This Report

Mar 2018

Apparel and footwear distribution is heading towards a more symbiotic space, where off-line and online boundaries are disappearing. Specialist retailers remains the most important retail channel, boosted mostly by the continued athleisure trend. However, internet retailing saw a 22% CAGR during the review period. Achieving convergence between off-line and online in order to create a unique environment in terms of experience, price and convenience will be essential to drive consumer demand.

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Channel Overview in Apparel and Footwear

Global apparel and footwear continues to deliver a strong performance

Apparel and footwear continues to produce robust growth, predominantly fuelled by Asia Pacific, including emerging markets such as India and Vietnam. Sportswear has been driving growth within apparel and footwear for almost a decade, a trend that has intensified in recent years. Healthier lifestyles and more relaxed dress codes are boosting demand for more comfortable and sporty outfits.

Store-based retailing to offer emotion and experience

Despite the rapid growth of e-commerce over the last decade, store-based retailing continues to dominate the distribution landscape, accounting for an 83% value share of global sales of apparel and footwear in 2017. Going forward, store-based retailers will have to continue merging online and off-line environments to connect and engage with consumers. Experience in the store will be key to drive consumer demand.

Department stores losing ground to specialist and internet retailing

Apparel and footwear specialist retailers remains as the most important retail channel in the industry, accounting for 58% of all store-based retailing sales in 2017. Department stores rank second, with a 15% value share. However, the rise of fast fashion and internet retailing have placed pressure on department stores, leading to a fall in share over the review period.

Internet retailing dominates Non-store Channels

Non-store is dominated by internet retailing, accounting for a 93% value share of global apparel and footwear non-store retail sales in 2017. The growing number of consumers with access to the internet, in addition to heavy investment from retailers to add online services to their traditional off-line reach, has fuelled e-commerce growth.

Positive picture ahead for apparel and footwear

Going forward, the industry is expected to continue producing robust growth ,with a CAGR of 2% over 2017-2022 and absolute value growth of USD187 billion. Growth within the industry will be sustained by fast fashion retailers evolving to a more sustainable and online structure, combined with a greater presence of affordable luxury players.

Introduction

Scope
Key findings

Industry Snapshot

Positive performance boosted by fast fashion and affordable luxury
Athleisure makes sportswear the main industry growth driver
Power shifts towards emerging markets

Channel Shifts

Non-store retailing continues to outpace store-based retailing
Non-store retailing gaining share across all regions and categories…
…but developments by region and category vary

Store-based Channels

Specialists continue to dominate store-based retailing
Sport goods stores boosted by athleisure trend
Specialist stores fight to retain their importance
Volume-based businesses lead the way
Sportswear brings innovation into the store
Direct-to-consumer strategies disrupt the retailing landscape
Proximity to consumers is key to success
Hypermarkets a good choice for convenience and value for money
Private label much stronger in apparel than in footwear
Private label keeps growing in North America
And shows potential in emerging markets

Non-store Channels

Internet retailing to continue leading non-store retailing
Homeshopping overshadowed by internet retailing
Apparel shines online while footwear and sportswear grow rapidly
Asia Pacific soars ahead in internet retailing
Multi-category platforms dominate online sphere

Future Developments

Positive scenario ahead for apparel and footwear
Online will continue engaging with consumers
Key takeaways

Report Definitions

Channel definitions
Industry definitions

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