The research group said total U.S. apparel sales fell 2 percent to $215 billion in 2017.
Last year, apparel sales to Millennials grew 4 percent, for about $2 billion in incremental sales and the highest growth rate of all generations. That growth rate slowed from the double-digit increases seen over the previous two years.
NPD also noted that despite the slower growth rate among Millennials and Gen Xers, they were also the “only generations with increases in apparel dollar sales in 2017.” NPD said Baby Boomers, which accounted for about 20 percent of annual apparel sales, and Gen Z, which represented almost a third of total apparel dollar sales, “both experienced declines in overall spend for the year.”
While ath-leisure continues to be a growth driver for the industry, activewear apparel sales rose just 2 percent to $48 billion in 2017, to represent 22 percent of total industry sales. Sales of active apparel for men and women grew last year, but it was women’s that supplied much of the growth in the overall category, rising 4 percent to $21.9 billion in 2017.
It was no surprise that e-commerce continues to be the driving force at retail when compared with the decline in sales at brick-and-mortar stores, but the latter still contributes more than three-quarters of the sector’s volume.
NPD noted e-commerce’s slow expansion in apparel versus other industries, growing from 16 percent in 2016 to 21 percent in 2017. And last year, online apparel sales rose just 4 percent from the prior year, compared with double-digit growth two years earlier.
E-commerce insights from NPD’s Checkout, an e-commerce tracking service, along with data collected from three million consumers by its partner Slice Intelligence, showed that online apparel consumers purchased more often last year, but they also spent 5 percent less per receipt.
Marshal Cohen, chief industry adviser at NPD Group, said, “The rapid 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.”
He noted that categories such as active apparel bottoms, undershirts and swimwear indicate consumers are focused on “comfort, the staples and niche products,” and that these are the “few sources of consistent, long-term growth” in the apparel market.
Cohen concluded: “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.”