Explainer: What demographics are influencing apparel growth?
8-10-2024
EXPLAINER: WHAT DEMOGRAPHICS ARE INFLUENCING APPAREL GROWTH?
Sustainability, social media, and fast access to cheap fashion remain the primary drivers for growth among apparel's consumer base, according to a new report.
The Demographics in Retail report by GlobalData suggests apparel retailers must focus on sustainability credentials and attributes to capture growth, as well as capitalising on technology that allows the targeting of certain demographics. Ethical consumption, it says, is a trend retailers can’t afford to ignore, driven mainly by the demand for ethical and sustainable practices from Gen Z.
The apparel green pound from younger demographics
The report says younger consumers’ purchasing decisions are influenced by product sustainability and social media engagement. Younger consumers are also more willing and likely to purchase secondhand items. This has led to resale platforms becoming increasingly prominent and a threat to traditional retailers with some retailers and brands launching their resale offerings in response.
However, and to a certain degree, contradictory, while the environmental and social impacts of fast fashion drive secondhand sales, Gen Z, who also purchases secondhand, are also more likely to buy from ultra-fast fashion retailers, notably Shein, in direct contradiction to this.
GlobalData retail analyst Oliver Maddison notes: “A key trend in the purchasing behaviour of young consumers, particularly that of Gen Z, has been the rising prevalence of the secondhand market, especially for apparel but also for bigger-ticket purchases such as furniture and electricals. GlobalData’s How People Shop Survey found that globally, sustainability is the second most important driver for buying secondhand clothing and footwear after price, emphasising the importance that retailers must place on their sustainability credentials to capture spend from younger consumers.”
“A key way that several retailers have sought to cater to this desire for sustainability is by creating their own secondhand offers rather than losing sales to resale platforms such as eBay and Vinted.”
The influence of social media and spending power
Where Gen Z’s purchasing power is rising as they enter the workforce and progress, their emphasis is on environmental sustainability and ethical practices of retailers more than previous generations. This has meant shoppers are purchasing from fashion retailers that support sustainable practices and investing in capsule staple wardrobes to reduce consumption.
However, Gen Alpha, born between 2010 and 2024 will have immense spending power with more than an estimated 2.5m Gen Alphas born weekly. Gen Alpha’s relationship with technology and social media is innate, having grown up with it. They therefore will shape trends, are acutely aware of brands and have high expectations of a personalised consumer shopping journey.
Brand awareness generated through social media is shaping Gen Alpha’s spending, with the oldest of the generation wanting to shop at or ask their parents for items from, more premium retailers targeting adults such as Lululemon, Birkenstock and Ugg. This generation has tremendous purchasing power before they have even started earning, as the awareness they have of trends, retailers and brands means they are influencing their less digitally native parents’ purchases.
Maddison observes: “Younger consumers, particularly Gen Alpha, discover brands online first via social media and expect a personalised shopping journey. This leads them to favour premium retailers such as Birkenstock and Space NK, especially in apparel and health and beauty where purchases are more personal.”
However, she adds: “Younger consumers are, like everyone else, motivated by price, which can be seen in the success of Shein amongst the youngest UK consumers – 52.6% of 16-24 year-olds ordered from abroad in the year to October 2023, of which 40.8% bought from Shein.”
The buying power of older consumers
This demographic will continue to grow in size and importance in the coming decades and apparel retailers must ensure that clothing aimed at these age groups remains stylish as it is unlikely that consumers will lose their interest in fashion as they get older. Retailers should instead focus on increasing their size ranges to cater for older consumers.
Harnessing tech to target certain demographics in apparel sector
Retailers can use augmented reality (AR) digital overlays to educate and engage with consumers and increase product transparency. AR digital overlays allow consumers to point their smartphone camera at an in-store item and get information on how the product was made, where it was transported from, and the materials used to make it.
Retailers can also use Internet of Things (IoT) to transform retail spaces into intelligent, connected environments that can adapt to customer needs in real time. Retailers can leverage a network of sensors, cameras and other devices to collect valuable data on customer behaviour, preferences and movements in store which can all be used to optimise store layout and quickly restock shelves, reducing the amount of time busy consumers need to spend in-store.
The report further suggests boomers and the silent generation are also becoming more tech-savvy and as Gen X, Millennials and Gen Z age, this will only increase in older consumers.
Features such as AR try-on options on retailers’ websites and apps are likely to become more useful to consumers as the population ages and inevitably becomes more immobile, resorting to online shopping instead of visiting stores to try on items like clothing and make-up and see big items like furniture in real life.
By Just Style
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