Online apparel retailers, particularly pure-players, are set to take share from brick-and-mortar rivals through next year, according to a new report from global information company NPD Group emailed to Retail Dive.
Last year, 21% of annual apparel sales came from website purchases, and 76% from in-store purchases, according to the report. And while in-store purchases declined 3% compared to 2016, online apparel sales rose 7% to $46 billion.
Almost half of U.S. online shoppers bought apparel last year, and the annual apparel online spend per buyer rose 11% compared to 2016, according to NPD.
NPD's report is just the latest evidence that Americans are growing more comfortable buying clothes online, a market segment that previously seemed ideally suited for in-store shopping because of consumers' desire to see, feel and try on merchandise.
And they're not just shopping for basics. NPD says that most consumers who are comfortable shopping online consider themselves to be social as well as fashion and image conscious. Sales of seasonal and special-occasion categories, like tailored clothing, sleep and outerwear, are also shifting online, according to the report.
Other researchers have found e-commerce's share of apparel to be even larger. Online apparel sales accounted for 27.4% of overall U.S. apparel sales last year, up from 23.5% in 2016 and 20.7% in 2015, according to the most recent Internet Retailer Online Apparel Report published last month. Meanwhile, some 43.2% of U.S. consumers surveyed by PYMNTS.com said they prefer to shop for clothing in stores, while 26.9% prefer to shop only online and 29.9% said they prefer both.
While that could be a bad sign for some physical retailers, the channel provides opportunities to engage shoppers, according to NPD Group chief industry advisor Marshal Cohen. "Retail is not dead, it is just spread," he said in an email to Retail Dive. "The apparel industry is spread across a wider range of options than ever before, be it in-store, online, buy, rent, or resell. Apparel's online consumer audience is expanding as the platform evolves into a more complete and diverse shopping experience."
Online-only retailers possess a unique flexibility that allows them to compete in what Cohen calls a "constantly changing shopping environment." But he cautioned that they can't "lose sight of innovative thinking."
Some innovation involves making up for online shopping's disadvantages. Other research has found that more shoppers want to "try before they buy" clothing online. Many buy multiple items with the intent to return some of them (especially when it comes to apparel and home goods), according to research from post-purchase solutions firm Narvar. On average, 40% of shoppers do so at least occasionally, with 45% of those under 30 and 48% of those with incomes over $100,000 indulging in the practice. Apparel is returned most often (43%), according to the survey of nearly 700 shoppers.
And that's getting expensive. The value of retail returns last year rose 53% from 2015 to $400 billion, and the growth of e-commerce is helping to drive that, according to returns and overstock supply company B Stock. Returns of brick-and-mortar purchases tend to hover at 8%, while e-commerce returns can reach 15% to 30% of purchases, according to CBRE.