A quick look into the future of fashion e-commerce in the U.S.

April 8, 2022 by
Frank Calviño
Photo by Dominik kielbasa on Unsplash

Fashion e-commerce has always been the king sector of global e-commerce. The U.S. is no different: Fashion e-commerce accounts for roughly 23% of total online retail sales in the United States and has continued to experience steady annual growth in the past two decades. 

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In 2022, U.S. retail e-commerce revenue from the sale of fashion apparel, footwear, and accessories is set to reach 205 billion U.S. dollars. By 2025, the online fashion retail sector could be responsible for almost 300 billion dollars in sales. But, what does the future hold for the American fashion e-commerce industry? Today we want to review some key figures and numbers to forecast the future of fashion e-commerce in the U.S. Let us begin!  

Fashion e-commerce: Diving into the vertical 

Fashion businesses have massively jumped into e-commerce in the last three years. Yet, this particular sector was a pioneer of e-commerce adoption, and fashion online stores have been around almost since the beginning of Amazon and Facebook. 

Amazon, for example, was estimated to hold an over 10% share of all apparel sold in the United States, and nearly 35% of all apparel sold online. Macy's, Gap, and Walmart are also among the best-selling online fashion stores in the U.S.

Online shoppers spent an average of 3.5 U.S. dollars per visit to luxury apparel properties and 2.7 U.S. dollars per online shopper per visit to general apparel properties, making fashion the highest revenue-generating vertical for e-commerce websites.

The value of e-commerce retail sales for clothing and accessories stores amounted to about 16 billion U.S. dollars in 2020. The combined compound annual growth rate (CAGR) for revenue from fashion retail e-commerce in the United States is expected to reach 14% between 2017 and 2025.

Young women driving the sales 

The lion's share of fashion e-commerce traffic is due to young women visiting online apparel stores. A recent study shows almost half of fashion retail website visitors in the United States are younger than 35, and almost two-thirds of the online traffic is generated by female users. The higher rate of women shopping for fashion items online is also evident on resale websites such as Poshmark and thredUP, where users can resell and buy second-hand clothing and accessories.

Fashion in our pockets

In addition to a wide variety of e-commerce websites, the online fashion landscape has been further diversified by mobile applications developed by B2C apparel retailers as well as C2C platforms that allow buying and selling between private consumers. Our smartphones have become, for all intents and purposes, portable stores for buying all kinds of clothes, apparel, and fashion accessories.

Based on the number of downloads registered in 2021, the most popular fashion app in the United States belonged to the Chinese retail brand Shein.

With over 25 million downloads, the Shein app overshadowed other renowned fast fashion brands such as Nike and H&M. The Hong Kong-based Cider also showed impressive growth in U.S. app downloads in 2021. Poshmark, GOAT, and the C2C buying/selling platform Depop, particularly popular with Gen Z shoppers, are also some of the most used fashion apps among U.S. mobile buyers.

All in all, according to Statista, the e-commerce fashion industry's compound annual growth rate (CAGR) is tipped to reach 14.2% between 2017 and 2025, with the industry hitting a $672.71 billion valuation by 2023. Fashion e-commerce will continue to grow, but this growth will not only be represented by an increase in sales but also, by an increase in competition. 

This increased competition is perhaps one of the main driving forces behind the recent increase in acquisition costs. That’s why it is vital that you keep your customers happy and your company efficient if you want your business to remain competitive and profitable. 

Precisely to help you retain your customers our partners at Salesupply have released, for free, this amazing Customer Care Guide 2022 Check it out! 

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