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Apparel Retailers and Ecommerce: Direct Marketers Dominate

Retailers with strong direct-sales history lead for ecommerce

July 1, 2015 | Retail & Ecommerce

eMarketer forecasts US retail ecommerce sales of apparel and accessories will reach $60.0 billion in 2015, a 17.2% share of total US retail ecommerce. Consumers have a wide range of retail choices when shopping for apparel: discount stores, department stores and specialty stores of all sorts, from fast fashion to luxury. As a general rule, apparel-specific retailers tend to have a higher percentage of revenues coming from ecommerce than do discounters or department stores, according to a new eMarketer report, “Apparel Retailers and Digital Commerce: Trends and Benchmarks.”

US Apparel and Accessories Retail Ecommerce Sales, 2013-2018 (billions, % change and % of total retail ecommerce sales)

When examining the role ecommerce plays in apparel and accessories retail sales, one factor is clear: a correlation between catalogs and sales. According to eMarketer data, nearly all of the leading ecommerce retailers (as measured by ecommerce as a percentage of revenues) in this product segment are known for having translated mail-order businesses to the internet. (It is important to note, too, that Lands’ End, J.Crew, Free People, Anthropologie, Urban Outfitters and Victoria’s Secret include catalog sales in the ecommerce figure.)

A background in catalog retailing doesn’t guarantee success, but multichannel retailers with strong direct-mail roots, such as a J.Crew or an Urban Outfitters brand, 
can command as much as 30% of sales digitally.
 For midtier retailers like Ann Taylor Loft, New York & Company and Gap, 10% to 15% is more common. Shoes, accessories and teen-focused retailers generally win smaller proportions of sales via ecommerce. For example, none of the shoe retailers tracked by eMarketer had ecommerce penetration higher than 14.1% for the January 2014 to January 2015 period.

In-Store and Ecommerce Revenues for Select US Apparel Retailers, Jan 2015

The apparel retailer with the highest ecommerce rate for the 12-month period ending January 31, 2015, was Lands’ End. With just 256 US stores, 236 of them shops inside Sears department stores, direct sales (via digital and catalog) are where Lands’ End draws a vast majority of its revenues (84.9%). During the 12-month period, the retailer’s ecommerce sales grew 1.3% to $1.32 billion, while retail store sales shrunk 9.4%. [Note: Lands’ End was spun off from Sears in April 2014.]

Other strong performers included Urban Outfitters’ brands. All three of its brands (Urban Outfitters, Anthropologie and Free People) saw ecommerce make up around 29% of total revenues in the January-to-January period.

Though ecommerce growth is happening faster for some retailers than others, digital progression is taking hold across the sector. Data from The NPD Group tracking US apparel industry dollars for the 12 months ending February 2015 shows that industry sales grew 2% overall, while in-store sales shrank 2%. Ecommerce sales, which NPD pegs at 17% of apparel sector revenues, grew 19% during the period.

eMarketer corporate subscription clients can view the full report here.

Get more on this topic with the full eMarketer report, “Apparel Retailers and Digital Commerce: Trends and Benchmarks.”

eMarketer releases over 200 analyst reports per year, which are only available to eMarketer corporate subscribers.

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