Introduction
Despite the economic downturns, online fashion sales remain significantly above the pre-Covid days. With 41% of consumers buying fashion online weekly, online fashion shopping accounts for one-fifth of the total E-Commerce revenue. Just like its mainstream retail counterpart, online fashion is one of the major sectors of E-Commerce. The RetailX Fashion Sector Report explores the resilience of online fashion in the changing macroeconomic environments and provides insights into consumer behaviors.
The RetailX report takes an in-depth look into consumer behaviors, from the demographics of online shoppers to the preferred shopping channels. You will also discover emerging trends in online fashion as many consumers seek sustainable fashion. The report explores the reasons behind the increase in online shopping for fashion items and the role social media and advertising play in the increased online fashion shopping sector.
Global online fashion has weathered some storms, and the report helps us understand the factors that will shape the industry in the next one to two years. With the changing economic environments and digital transformation in both sales and supply channels, it’s important to pay attention to the important trends to navigate the dynamic fashion sector.
Demographics of Fashion Online Shoppers
Global fashion consumers have diverse behaviors that influence their online shopping habits. RetailX conducted a survey of 1,571 fashion online consumers in the USA, UK, Germany, Brazil, France, and Australia to understand consumer habits. According to the survey, E-Commerce is popular across all age groups. E-Commerce is no longer for young shoppers only!
Gen Z fashion shoppers
Gen Z shoppers between the ages of 16 and 24 make up 30% of online fashion consumers, while shoppers above 45 years account for 40% of online consumers. The difference in online shopping is due to the diverse income levels. Young shoppers are mobile-savvy and prefer shopping online, but they have lower incomes and low spending power. Hence, despite being tech-savvy, Gen Z shoppers may not spend money on high-end fashion products.
Millennials and Gen X fashion shoppers
Millennials and Gen X online fashion shoppers remain the key ages for online shopping. Contrary to popular belief, consumers above 55 years are pretty mobile-savvy and have adopted E-Commerce. Hence, they also shop for fashion products online. Aside from age, Millennials and Gen X shoppers account for the majority of middle-income and high-income earners in most countries. Since they have a large discretionary spend, they account for 71% of online fashion consumers.
Culture and exposure
The demographics of fashion shopping vary in different regions based on the culture and exposure of the population. For instance, Gen Z was brought up in the digital age and can’t remember a time without technology or the internet. Hence, they gravitate towards online shopping and rely on online sources for most information. They don’t know any different than shopping and searching online for fashion items.
On the other hand, Millennials and Gen X shoppers have grown up learning about E-Commerce and have watched the industry grow. Many millennials are multiscreen and like doing online research on products before making a purchase. Initially, they started with browsing online before purchasing a product in-store to embrace E-Commerce.
Millennials and Gen X shoppers who live in developed markets are more familiar with online shopping compared to their counterparts in less developed regions. For instance, the developed markets had early access to smartphones and embraced the new emerging technology. The access to the internet and exposure to E-Commerce also made online fashion shopping easy to embrace in developed markets. Nowadays, older shoppers who once loved the experience of going shopping in high street retail stores prefer to shop in the comfort of their homes.
In the pre-Covid era, E-Commerce shopping was growing steadily, but it experienced a boom during the Covid period. Shoppers could not leave their houses to go shopping, and this opened up the E-Commerce market to a broader population.
In developing markets, E-Commerce fashion shopping is less popular due to the limitations of access to the internet. The majority of online fashion shoppers in developing markets need to be affluent to access the internet and do their shopping. That means the majority of the online shoppers in developing markets are over 35 years old and have high incomes. However, the growing use of mobile phones may see the demographic shifting to the younger generation, which is more technology-oriented.
Fashion Shopping Habits Online
The RetailX consumer report looks closely at how online fashion consumers make online purchases. Online fashion shoppers shop frequently, with some shopping more than once a week. According to the survey, 77% of online shoppers buy fashion items more than once a month, while 38% shop more than once weekly. Only a handful of fashion shoppers, 7%, shop more than once a day.
Despite the number of times online shoppers purchase from E-Commerce stores, statistics show that the spending is low. For instance, 44% of hardcore online fashion shoppers typically spend between $12 and $120 monthly on fashion items. The same 49% of online fashion shoppers also spend the same amount on general online shopping.
Graph 1: Monthly online spend, fashion e-shoppers (%), 2022
A quick look at high spenders in E-Commerce stores reveals that 16% of online shoppers spend over $300 a month on online shopping. In online fashion shopping, the number of high spenders rises to 20%. In 2022, only 13% of online fashion shoppers spent between $300 and $610 monthly, and only 2% of online fashion shoppers bought items worth over $1,200 per month.
The fashion shopping habits vary depending on regions and the price point of goods in different markets. For instance, in Europe, the average spend of online fashion shoppers per month is $375 (€340). In some regions like Brazil, shoppers are increasingly buying fashion online, but the overall fashion spending on E-Commerce sites is $540 per year or $50 per month. The price variations in different regions are also influenced by the cost of living and the quantity of the products they buy.
Why Consumers Shop Fashion Online
RetailX consumer data reveals that online fashion shoppers are more at home shopping online compared to other product categories. There’s no denying that more and more people shop for fashion items online. What is the driving force behind the increasing online fashion shopping?
Graph 2: Reasons for shopping online, fashion e-shoppers (%), 2022
Some of the reasons behind the increase in online fashion shopping include:
Convenience
Convenience is the main reason for fashion sector customers to shop online. Based on 80% of the 1,571 fashion online shoppers, the main reason for shopping online is convenience. Online fashion consumers enjoy the ease of browsing their favorite cosmetics or clothes and having their purchases delivered to their doorstep. It saves them the trouble of going out to a physical store to shop for fashion items. The ability to pay on delivery is also convenient for most online shoppers. It gives them the confidence to choose the fashion items and make cash payments on delivery.
One of the perks of online shopping is the next-day delivery option. Hence, online shoppers can do last-minute shopping and still get the items on time, especially during holidays. You also enjoy the ease and comfort of shopping from the comfort of your home. Most E-Commerce retailers clearly illustrate the product features through videos and high-quality photos. That means you are guaranteed to receive the items when you order.
Wide variety of choice
Online fashion shopping provides a wide variety of choices to consumers. With many E-Commerce retailers joining the industry daily, shoppers have more products to choose from. You can view the latest trends without attending fashion shows and fares. According to the RetailX consumer observatory, 59% of online fashion shoppers say that a wide variety of choices is the reason they shop online. Diverse products and brands are available from different sellers all in one place. Online E-Commerce platforms also allow online shoppers to shop from E-Commerce shops in different countries. Some popular fashion products that online fashion shoppers purchase include jewelry and cosmetics. Online shoppers have multiple choices in sizes, colors and brands to choose from.
Saving money and price comparisons
According to the RetailX survey, 70% of the respondents mentioned price as the motivating factor for online fashion shopping. The wider variety of options leads to competitive prices of online fashion items. It is also much easier to compare prices and research on the product quality in online shopping. You will find affordable and excellent prices from E-Commerce retailers since they often source products directly from the seller without involving third parties.
Most E-Commerce stores also help you save money through vouchers and discounts. Aside from the discounts that you can apply, many E-Commerce shops have cashback deals, and you can collect reward points for future shopping. Online shopping is also popular due to the partial payment option available to shoppers. Many online payment methods allow installment payments.
Reviews
The introduction of E-Commerce led to the development of after-sale trends like reviews and ratings in online shopping. 24% of online fashion shoppers recognize the importance of reviews and testimonials in their shopping journeys. Fashion online shoppers rely on reviews from other customers before placing an order. Any negative reviews can influence the purchase decisions.
Channels, Social Commerce, and Advertising
E-Commerce is a rapidly growing industry, and one of its greatest gifts to online shoppers is the ability to find what they want to buy online. So, how do online fashion shoppers find the items they need? Do social media and advertising assist online fashion shoppers on their buyer journey?
Channels
Initially, fashion sector customers relied on Google searches to find the clothes or shoes they needed online. However, in recent years, the use of search engines to search for fashion items online has reduced and is being overtaken by social media pages. For instance, according to a RetailX survey, only 49.8% of online fashion customers use Google search, while 52.4% and 51.6% use Instagram and Facebook, respectively.
Graph 3: Channels for product discovery, fashion vs general e-shoppers (%), 2022
Other social sites gaining traction in online fashion shopping are YouTube and TikTok. 41.2% of online fashion shoppers use YouTube to find inspiration for the items they need, while TikTok makes up 28.1%. With four social sites among the top five channels that online fashion shoppers use to find the fashion items they need, it demonstrates the power of social media in online shopping. Fashion e-shoppers are likely to click on product adverts on social media sites.
Social commerce
Social media has contributed to the growth of the online fashion industry. Aside from social search options available in social media channels, there is the growing role of influencers in driving E-Commerce sales. Social commerce promotes the use of social media as a channel for selling and advertising to customers. For instance, in Germany, Meta is at the forefront of social media shopping, with statistics showing that Instagram and Facebook are expected to dominate 57% of revenues in Germany in 2023.
The growing influence of social commerce on online fashion shopping is due to the rise in influencer culture. Influencers affect the purchase decisions in fashion and general retail products. Most online shoppers are likely to purchase items recommended by influencers. In fashion, online shoppers seek inspiration from the current trends from fashion influencers before shopping.
Graph 4: Likelihood of influence recommendations leading to purchase, fashion e-shoppers, by country (%), 2022
Aside from using influencers to increase E-Commerce sales, online fashion shoppers are also keen on the personalization features. Now more than ever, E-Commerce stores must do more than build a strong social media following. With personalization being critical for online shoppers, it is important for E-Commerce retailers to address the needs of their target audience directly. Most online shoppers prefer E-Commerce stores that build relationships with them and provide personalized services. It is also important to handle feedback and complaints promptly. Creating a personalized online shopping experience helps online shoppers save time during shopping.
Online advertising
Despite the huge influence of social commerce and influencers in online fashion shopping, online advertising still has a huge impact. However, unlike social media influence, which inspires immediate sales, online advertising produces better results over a longer time frame. For instance, online fashion shoppers are likely to buy a product advertised if they have seen the ad or brand more than once. According to RetailX consumer data, 25% of online fashion shoppers will make a purchase after seeing the same advert every week. The statistics for advertising monthly and a few times a year are 26% and 23% conversion.
That means online advertising is more subtle and builds interest in the brand over time before the online shopper buys a product. E-Commerce stores that use online advertising have to advertise frequently to create familiarity with the products and encourage sales.
The impact of online advertising on sales in Germany, the UK, France, Australia, and the USA is close to the global average. However, Brazil stands out with higher statistics associated with online advertising. For instance, 45% of fashion online shoppers say that online adverts inspire them to make daily purchases and 30% weekly purchases. This could be due to the large online market or the late introduction of the internet in the country.
The Sustainability Side of Fashion Online Shoppers
Online fashion shoppers are considered to be among the most environmentally engaged. Hence, they are likely to gravitate towards sustainable fashion in their online shopping. The increased awareness of the environment globally has influenced many sectors, including fashion E-Commerce. In 2010, fast fashion was on the rise, leading to tons of discarded fast fashion items ending up in landfills and water bodies. More fashion sector customers are becoming environmentally conscious, turning away from disposable fast fashion trends, and adopting sustainable fashion. Let’s look at the environmental impact of fashion and sustainable trends emerging.
Global environmental impact of fashion
According to RetailX reports, several facets of the fashion industry impact the environment. In 2022, the fashion industry was responsible for 1.2 billion tons of greenhouse gasses released to the environment from manufacturing raw materials for making garments. Emissions also arise from shipping goods from the manufacturer to the seller. Disposal of old-fashioned items often involves shipping clothes from developed countries to developing countries, leading to enormous pollution. According to the report, some of the sources of carbon emissions in fashion include:
Raw materials and fabric manufacture
The 1.2 billion tons of carbon emissions from the fashion industry contribute to 4% of global emissions. The largest proportion of the emissions comes from raw materials and processing of the raw materials. From cultivation to harvesting to transportation of raw materials used to make clothes, the process of making garments leads to a lot of environmental pollution.
The fashion industry is dominated by two types of fibers: cotton and man-made polyester. Man-made polyester has the highest environmental impact since it is derived from fossil fuels. While cotton also releases greenhouse gasses from the fertilizers used to plant, it has minimal impact on the environment. Many garment-making companies and manufacturers are shifting towards naturally occurring cotton in a bid to remain environmentally conscious.
Shipping raw materials
Since manufacturing and cultivating raw materials doesn’t occur in the same location, manufacturers must ship raw materials. Some manufacturers import raw materials, which significantly impact the environment. For instance, shipping by sea accounts for 3% of global carbon emissions, but it’s still environmentally friendly compared to transporting goods by road.
Delivery to stores and customers
After manufacturing, goods are transported from the company to retail or wholesale stores. However, in the case of E-Commerce, the goods are delivered to customers directly. The movement of goods from the manufacturer to the E-Commerce warehouse and later to the customer by road leads to high levels of carbon emissions. Road emissions account for 30% of the greenhouse gas emissions.
Returns
E-Commerce purchases, especially fashion sales, have additional carbon emissions arising from the return of goods. Moving products to and from online fashion shoppers increases carbon emissions significantly. Packaging materials also contribute to environmental pollution. When items are returned, they need to be repackaged, which means the packaging is thrown away. The returns vastly increase the packaging waste, especially if you have many returned items a month.
Disposal
Fast fashion items are usually worn for a few months, and they are disposed of at the end of their useful life. Unfortunately, most fashion items end up in landfills or are incinerated. Whether they end up in landfills or are incinerated, they pollute the environment since they release chemicals into the environment. Dumping fashion items in landfills has also led to some clothes ending up in the ocean or water bodies. Fashion items that end up in the ocean affect marine life.
Reducing environmental impact
The fashion industry has come up with ways to reduce the environmental impact of fashion items. Besides, with increasing sustainability awareness, online fashion shoppers are conscious of sustainable products. The global fashion industry that is deemed sustainable has increased from 2.1% to 4.3% in 2022. While the shift to sustainable fashion isn’t significant, it shows some progress and awareness of the industry’s environmental impact. The revenue share of sustainable apparel has also increased gradually and is expected to hit 6.1% in 2026.
Graph 5: Revenue share of sustainable apparel worldwide, 2013-2026
While the global shift to sustainable fashion is not significant, some regions have made significant progress. For instance, sustainable fashion is prevalent in Asia. From the RetailX survey, 89% of online fashion shoppers in China value sustainable fashion. Vietnam, Indonesia, and the Philippines follow closely in the sustainable fashion market.
With the global net-zero initiatives, fashion brands and E-Commerce stores have seized the opportunity and made sustainability part of their brand. It has become a major selling point, and environmentally conscious E-Commerce brands have made huge profits from the initiative. Aside from sourcing sustainable raw materials, E-Commerce brands are mindful of the distribution methods and carbon footprints. At the moment, over 50% of global fashion brands have incorporated sustainability from sourcing to distribution.
The sustainable fashion market is not confined to ethically sourced raw materials and reducing carbon footprint in distribution. The latest trend is reusing and recycling fashion items to reduce the amount that ends up in landfills.
Reuse, Recycling, and Resale
The circular economy model has reduced the amount of clothes that wash up on beaches and old clothes that end up in landfills. In a circular economy, the industrial system is designed to reduce waste and pollution. The textile products or fibers used to make garments circulate within the production and consumption systems for a long period. The fibers can also be fed back into the biosphere to restore the natural capital of the fibers. In such a system, the fashion industry restores and regenerates fashion items to ensure they maintain their high value during use and re-enter the economy after use.
In a circular economy, fashion items are used more often to capture their full value during use. Once the clothes or fashion items exhaust their useful life, they are recycled into new clothes. This allows the value of the materials to be retained even after use. Some E-Commerce stores have developed business models that improve the durability of clothes and fashion items. The innovative opportunities to enhance the circular economy in fashion include:
• Ensuring durability of clothes: The first step in encouraging the reuse and resale of fashion items is to ensure they are durable. High-quality clothes have a longer useful life, and online fashion shoppers can return the item for resale.
• Clothes rental models: With the fast-evolving fashion trends, E-Commerce shoppers are always on the lookout for the latest trends. Instead of customers disposing of clothes they no longer use, some online retailers have come up with clothes rental models. The model is perfect for E-Commerce shoppers who want a suit or dress for short-term use or want to keep up with their evolving fashion preferences.
• Improving resale efforts: As manufacturers improve the quality of new clothes to ensure durability, new business models emerge for E-Commerce stores. For instance, clothing resale is widely adopted, and many online fashion shoppers don’t mind buying second-hand clothes. Improving resale efforts can boost clothing utilization significantly.
The circular economy already generates revenue globally, with the second-hand clothing industry projected to have a revenue of $476bn by 2030. In Europe, the resale market is increasing drastically, led by millennials and Gen Z fashion sector customers. 42% of fashion shoppers in Europe are likely to buy second-hand clothes. The resale market is particularly popular in Germany, France, and the UK, with more than 50% of online shoppers open to second-hand clothes or already purchasing them.
The USA isn’t left behind, with the vintage and second-hand market thriving. Initially, in the USA, charity shops or stores selling on eBay dominated the second-hand clothes market. The vintage market is growing, and you can find a collection of pre-loved fashion in online marketplaces like Vestiaire Collective or Depop.
Sustainability challenges
While many fashion sellers strive to achieve sustainability goals, they face multiple challenges. Some of the barriers to improving sustainability, according to the RetailX report, include:
• Lack of standards to measure sustainability performance
• Insufficient budgets to implement sustainability strategy and cost of sustainable raw materials
• Compliance issues
• Reduction of environmental impact resulting from supply chains
• Hiring talent with sustainability expertise
With the barriers associated with sustainability, some online businesses make unfounded sustainability claims called ‘greenwashing.’ The negative impact of greenwashing is the skepticism from online shoppers. Most fashion e-shoppers aren’t sure if the E-Commerce shops making sustainability claims are genuine.
Conclusion
With the contribution of fashion to E-Commerce revenue, it has become a significant sector. The RetailX report explains the complexity of the current fashion sector customers and their impact on the trends in online fashion. While the youthful consumer base boosts sales in the online fashion market, millennials and Gen X also spend more online. The increasing interest in environmental sustainability is influencing shopping trends, with the markets for second-hand fashion items increasing significantly.
Download the full report to understand fashion consumers’ behaviors. It provides data-driven insights to help E-Commerce stores build buyer personas and learn from the success stories.
***
