What the US Fashion Industry Can Teach Others About Digital Transformation

May 2021

The COVID-19 pandemic has accelerated the shift to e-commerce, exemplified by the US fashion industry, which is embracing the rapid digital evolution across every aspect of businesses. This report reviews the results of Euromonitor International's latest research and consumer surveys, and examines the state of digital transformation, the key demographics driving change, and the emerging technologies that could reshape the future of retailing in the industry.

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This report comes in PPT.

Key findings

E-commerce will continue to accelerate in the post-pandemic era

The COVID-19 pandemic rapidly accelerated the shift from store-based retailing to e-commerce in the US apparel and footwear industry, and this evolution of retail landscape is likely to continue in the post-pandemic era. Nearly half of apparel and footwear sales in the US are expected to be through the e-commerce channel by 2025. In order to stay competitive, businesses must fully prepare for the digital era.

Consumers will become increasingly digital-savvy across all age groups

In addition to younger consumers, those over 45 are also becoming digitally active, and digital will become more important for discovery, engagement and purchase. Free shipping, easy exchanges and returns, as well as new digital features, like virtual try-ons and livestream shopping events, are further supporting the growth of e-commerce in apparel and footwear. As online shopping and search knowledge differs by age group, retailers will need to know what works best for their target audience and create more seamless shopping experiences across channels.

Consumers will have higher expectations of digital communications and customer support

The acceleration of e-commerce has made digital engagement a higher priority for apparel and footwear players. Diversifying customer services through technology is crucial to meet changing customer expectations. While AR/VR are popular technologies, industry professionals are also showing interest in other technologies, like artificial intelligence, the Internet of Things and cloud, for future investment.

Companies will need to accelerate their digital transformation plans

Digitalisation is quickly changing the nature of traditional processes and can help achieve results much faster and at a lower cost. Companies will accelerate their digital transformation plans, and explore new and emerging technologies to become more innovative in both products and customer experiences.

Key findings
The US fashion industry is entering a new wave of e-commerce growth
COVID-19 has further accelerated the shift to e-commerce in the US
Creating seamless shopping experiences is key to reach young consumers
Consumers aged 45-59 increase the use of phone for online shopping
How these digital trends will change the shopping experience
Livestreaming and virtual events are gaining momentum
Case study: Walmart teams up with TikTok app for live shopping test run
Acceleration of virtual living, digital-only fashion is also emerging
Case study: Champion uses NFTs for its 2021 spring collection
Retailers offer flexible shopping and return options for online shoppers
Brands utilise emerging technologies to improve digital engagement
Case study: Kohl’s Snapchat tie-up enables users to create virtual looks
How fashion companies prepare for the new digital era
Companies will continue investing in new technology for innovation
E-commerce growth increases the importance of personalisation
Digital growth requires retailers to rethink customer interactions
Diversifying payment options is crucial to the future of retailing
Brands should adapt to consumers’ plans on reducing their screen time
Key takeaways

Apparel and Footwear

Apparel is the aggregation of clothing and footwear. This dataset covers retail sales of apparel through both store-based retailers and non-store retailers. Excludes black market sales (i.e. untaxed, generated within informal retailing)and duty free sales (travel retail). Items must be new when sold to the consumer; second-hand/used items are excluded. Antique and/or vintage clothing and footwear is also excluded.

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