New York and Los Angeles are the largest U.S. markets for apparel sales — accounting for 8 and 5 percent of industry dollar sales, respectively — but smaller markets such as Orlando, Fla., and Washington, D.C., are the top markets driving both the growth rate and dollar volume increases for the industry, according to a new study released by The NPD Group.
This story first appeared in the April 21, 2015 issue of WWD. Subscribe Today.
The two top markets had strong performances across in-store and online channels. For the year ended Feb. 28, Orlando’s dollar sales were up 23 percent, while Washington’s dollar sales gained 18 percent.
Among the top 25 designated market areas in the U.S., online dollar sales of apparel increased for most, but only a few grew in-store sales.
Total apparel industry dollar sales increased 2 percent in the 12-month period, but sales of apparel purchased in-store declined 2 percent. The decline of in-store sales was evident for most of the top 10 U.S. markets. Washington, D.C., is the only area with notable in-store sales growth, experiencing a 14 percent gain.
“The big regions are no longer leading apparel industry sales growth,” said Marshal Cohen, chief industry analyst at NPD. “When New York and Los Angeles don’t even make it into the top 10 list of DMAs driving apparel growth, we have a big opportunity gap in the market. We need to understand the cause in order for the apparel industry to regain traction moving forward.”
After Orlando and Washington, the biggest gainers in dollar sales for the year ended Feb. 28 were Phoenix (+16 percent), Cleveland (+16 percent) and Detroit (+11 percent).
Online sales, which now account for 17 percent of industry dollars, increased 19 percent in the period. When assessing the top U.S. markets — New York, Los Angeles, Chicago, Philadelphia and Dallas-Fort Worth — each grew online sales by double digits. Still, the biggest growth is coming from smaller markets.
For the most part, the DMAs that are outperforming the industry as a whole are also the ones with more dramatic in-store sales growth than online sales gains. NPD notes that online shopping delivers great convenience to the consumer, but it can’t yet deliver the level of impulse purchasing that in-store shopping can. Impulse purchases of apparel account for 32 percent of in-store sales, while online only generates impulsive purchases 22 percent of the time.
“Impulse purchases are the big growth driver, so the strategy of driving traffic to Web sites needs to exist in tandem with efforts to drive traffic to the stores,” Cohen said. “Regardless of regional market size, or method of purchase, the apparel industry needs to engage consumers with something new and different — something they can’t find everywhere.”