3 Consumer Shifts in Fashion Retail for 2023
The retail landscape has been changing drastically over the last few years. In these times of uncertainty, it is no wonder that brands and retailers are feeling uneasy about what lies ahead.
Previously, in 2020 and 2021, the whole world faced challenging conditions with the initial consequences of Covid-19. In 2022, after a brief recovery period, an unexpected wave of macroeconomic and geopolitical issues took place.
Because of these events, consumer shopping habits have drastically changed. Now, they are looking for new and exciting shopping experiences, getting creative with their spending, and exploring new ways to purchase products. Such as like live selling, buy online, pick up in-store (BOPIS), and many others.
Consumer Trends in Fashion Retail
While we head into the first months of 2023, it is important to stay on top of these shifts. That way retail businesses can adapt their business model and protect customer loyalty. In this blog, we share three key consumer shifts for 2023 that you should be aware of, according to the BoF State of Fashion Report.
In 2023, while experiencing the highest inflation in a generation and rising geopolitical tensions, it is expected that lower-income households will struggle with covering everyday expenses. Also, they will be likely to cut back on discretionary spending, like fashion and beauty purchases.
On the other hand, it is a different story for higher-income households. In this situation, they might not have to worry about the economic turbulence as much, and their shopping habits will remain relatively unaffected, at least for now.
As a result of the above, we are at the beginning of a two-track spending reality. At this point, the affluent will still have money to spend, but the lower-income demographic may struggle and will have to change their spending habits. But, how to adapt to this consumer shift in your retail business? Here are a few ways:
- Have discounts and loyalty programs. Implementing these strategies for those on tighter budgets, especially if this is your target market.
- Study other income streams. As low-income consumers look for value for money, they may turn to resale, repair, rental, or refill products and platforms.
- Consider “premiumization”. Luxury brands have been opting for this alternative, as it helps to stand out among their competitors and make more money.
- Encourage a higher ticket revenue. For affluent customers, making premium kits can help you obtain bigger tickets.
According to research conducted by the fintech company Klarna:
- Around 50 percent of Gen-Z globally have purchased fashion outside of their gender identity.
- Around 70 percent of consumers say they are interested in buying gender-fluid fashion in the future, with younger generations leading the way.
As can be seen in these numbers, fashion that is not limited by traditional gender stereotypes is not just a trend, but something that people identify with. This way individuals will dress in a manner that aligns with their personal identity and individual expression. According to this consumer shift, shoppers will look for less menswear and womenswear, and more gender neutral fashion.
Until now, embracing gender-fluid fashion can be a challenge, especially when it comes to considering cultural differences in markets. However, it is important for helping foster customer loyalty, increase loyalty and awareness, maintain competitiveness, and have a gender inclusivity culture.
Here are some ways to adapt to this consumer shift in your retail business:
- Know your audience. To decide whether your brand should embrace this trend, consider your customers’ demographics, such as age and culture. If you are ready to embrace this trend, learn about Gender-Fluid and understand the perspectives of the customers you are trying to reach.
- Diversify your product line: Offer a wide range of clothing and accessories that can be worn by people of all genders, such as unisex items, androgynous clothing, and accessories.
- Evaluate and adjust your processes: Introducing gender fluidity requires rethinking not only your product design, marketing, shopping experience, and social media communication, but also your business processes and even your supply chain.
Timothée Chalamet, 00:01:25, at Venice Film Festival 2022, wearing Gender-Fluid Fashion.
The wardrobe of 2023 could be drastically different from the wardrobe of any of the recent years. Now, the traditional system of clothing, segmented by leisure activities, business events, and family celebrations, no longer applies.
While the office dress code is more relaxing today, and hoodies, jeans, and sneakers became acceptable in many offices around the world, customers dress up for the most formal occasions. Particularly, they are looking for statement-making outfits and unique items that will stand out; doing versatility and comfort much less of a factor for decision-making.
As a result, rental platforms and services will present a unique opportunity for occasion wear because customers will prefer renting their special gowns that won’t be used more than a few times.
This reinvention of dress outfits fits into the changing retail landscape, in which consumers will be more particular about the brands they support, trusting only those that offer innovative solutions to their clothing problems.
Incorporating this trend in your retail business might be very challenging, from product sourcing and marketing strategies to pricing adjustments. Here are some ways to take advantage of this trend:
- Understand your audience. Gather information on your consumer’s habits, routines, and requirements for their everyday life.
- Rethink your clothing proposition. The markets are two: comfortable, versatile, elegant but casual everyday apparel, and statement-making special occasion outfits.
- Explore the possibilities of renting. The rental market is projected to be worth $2.1 billion by 2025, in part by the demand for elegant outfits, according to Technavio. It can be interesting to explore this market for brands that want to focus on special occasions.
On special occasions, people will tend to opt for eye-catching outfits to stand out when they choose to dress up.
The 3 trends that will shape 2023’s retail fashion
As we approach the first quarter of 2023, it’s important for fashion executives in the retail industry to be aware of the consumer behavior shifts for this year, the potential global economic crisis, and how it may impact their customers.
In particular, Two-track spending, gender-fluid fashion, and formal wear reinvented are key consumer new behaviors that should be considered when planning strategies for these upcoming months.
Unquestionably, the retail-fashion industry needs to stay ahead of the curve and adapt to remain competitive and consumer-focused in 2023. By adapting to these trends, retailers can achieve success, maintain customer loyalty, and avoid a decrease in their earnings despite the economic difficulties forecasted for this year.
What other trends do you think will impact the fashion industry in 2023?
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