How much are you paying for your clothes?
Clothing brands and retailers across the globe are scrambling to keep up with rising demand from millennials and other buyers.
While consumers may have spent more than $1 trillion on clothing and other consumer goods in 2017, apparel sales are expected to fall 0.1% in 2018, according to a report from research firm Euromonitor International, which surveyed top apparel brands.
“I think we’re going to see some real downward pressure on the apparel industry as a whole, and consumers will start to see more discounts on clothes,” said David A. Miller, chief analyst at the research firm.
The biggest losers, Miller said, are retailers such as Target, Bloomingdale’s and Kohl’s.
The retailers typically see a lot of revenue growth from online sales, which are typically more lucrative than brick-and-mortar sales.
In 2017, the industry accounted for about 4% of sales and accounted for 15% of global apparel sales, according the Euromonitors report.
The industry is expected to account for roughly 3% in 2020.
For retailers, the biggest culprit is rising costs of clothing.
“The cost of clothes is going to rise significantly, and retailers are really going to be facing a challenge to survive and maintain their business,” Miller said.
But it’s not just consumers that are in the crosshairs.
Retailers are also facing competition from online retailers such and Amazon, which is offering a discount on items at online retailers and online retailers.
Amazon.com, the nation’s largest e-commerce retailer, announced in May it will start offering a free, two-day shipping for customers who order through its website.
This deal is a way for retailers to compete with the growing popularity of Amazon Prime, a service that offers free shipping on orders from major online retailers like Amazon.com and Target.
In the U.S., Amazon Prime members can also get free shipping from Target, Walmart and Target Express on their orders for up to five items, or up to $25 on select items, according Topps, which represents the industry.
But Miller said the retail industry is still facing a difficult time in terms of innovation.
“You have a lot more online retailers that are taking on the role of providing discounting and convenience, and that’s great, but you have also a lot less brick- and-mortars, which I think is a bigger issue,” he said.
A few retailers that have emerged from the recession and are still operating at a high level are Walmart, Kohl, and Kohls, which together have more than 10,000 stores worldwide.
They were also among the first retailers to open their doors in the U, and Miller said it is important that retailers that can compete with online sellers in the coming years.
“They have an opportunity right now to grow and to compete at a competitive level,” Miller added.