As I mentioned in a previous article, eCommerce is going through a tough period at the moment. Following the huge growth online during the lockdowns, it has fallen away consistently as we’ve entered a different phase: the cost of living era. Some product categories are experiencing the worst impacts of this downturn more than others, and fashion is certainly in that camp.

It’s been an odd few years for fashion online. As a category it has long been a large and popular one amongst shoppers. The pandemic was deeply disruptive to that trend, with clothing seeing 0% growth in 2020 while many other categories saw the kind of volumes they’d never seen before, and may not see again for a long while. Demand for formalwear fell through the floor.

The Decline in Clothing Growth

There was some inevitable balancing out across 2021, but since then clothing has seen a level of performance that has been at times indifferent and other times outright poor. In 2023 growth for that category decreased by more than -6%, against a start-of-year forecast of 0%. With the exception of gifts, which has been the category most negatively impacted by the cost-of-living shifts in demand, clothing has been hit worse than most other categories. So what’s going on?

Conversion on retail sites has fallen against where it was prior to 2022, but having done so in many categories it has then stabilised; for clothing it continued to decline in 2023 as well. There are three primary reasons as to why clothing has experienced a worse downturn than many others.

Economic Crisis and Changing Shopping Habits

The first is the obvious one: we are in the midst of an economic crisis, recently in a recession in the UK, and that has changed how people are shopping for clothes. They are taking longer to make purchase decisions and, when they do, they are not necessarily just going for the cheaper option – instead they are often buying reasonable quality in the expectation it will last longer. The consequence of that is them not buying as frequently as they were before.

The second is very British: the weather. Last year we had a mild Winter, a dry Spring, wet Summer and 30 degrees in September. This makes it difficult to merchandise the items retailers have bought in to fit the anticipated seasonality. With climate change, this is likely to be a continuing issue.

Which brings us to point three: sustainability. Whether it is happening for ethical or financial reasons, in the past 12 months second-hand apps such as Vinted have become a major part of shopper behaviour. For a long time it’s been possible to buy and sell clothes on the internet, but these apps seem to have caught the zeitgeist effectively, and that represents a clear challenge to clothing retailers who will see a dip in demand to some extent because of that shift to these apps.

Some fashion retailers also point to the entry of Chinese retailers to the UK, such as Shein and Temu, bringing a very low price point to the make-up of the competitive landscape in which they are operating. 

Looking Ahead

There appears to be numerous factors conspiring against online fashion retailers at the moment; many are hoping that we start to see some more positive developments in the near future.