Fast fashion brands across the US and the UK markets have increased price points across, reveals latest data from Stylumia. Based on latest analysis by KPMG, the report compares retail list price of select brands and retailers in the standard and fast-fashion segments. The performance of these brands and retailers is compared from March to May 2022 with the same period in 2021.
The KPMG outlook presents three scenarios of global GDP growth rates. It indicates, the growth rates drop from 2021 levels in 2022 and 2023, returns to pre Covid rates. The inflation trend endings well above pre Covid times even in 2023 across all three scenarios.
Low impact of inflation on US consumers
The report shows, in the US, demand for garments in the price range $20-$40 declined 57 per cent during the period whereas demand for fashion in the range $40-60 increased 60 per cent and demand for fashion in the range $60-80 grew 11 per cent. This indicates the low impact on consumers of rising inflation and a growing willingness to buy higher-priced apparels.
In the UK, the 466 per cent growth in demand for tops priced above £10 and 243 per cent growth in demand for tops in the £10-£20 indicates a resistance to rising inflationary pressures. However, for women’s dresses category in the US, demand is not as resistant to increasing prices, the report shows.
In the US, demand for women’s dresses priced below $40 declined 29 per cent while demand for dresses in the range of $40-$60 declined 12.5 per cent. This indicates, consumer behavior differs across categories and geographies.
UK markets reflects overall decline in demand
In the UK market, demand for garments priced in the range of £0-£20 declined 76 per cent while those priced in the range of £20-£40 declined 4 per cent. The market also witnessed a 65 per cent decline in demand for garments priced in the range from £40-£60, indicating an overall decline in demand for garments in the country.
Ensure right product prices
To boost sales, besides understanding their own data, brands need to understand holistic consumer demand across markets and categories, the report says. They need to ensure right pricing of products besides focusing on customization to capture a significant share in the market and generate revenues to make profits,.
Gains for brands with flexible prices
With demand-supply gap widening, brands’ inventories in the fixed priced apparel ranges might pileup, resulting in more markdowns. Demand across brands might shift to those altering their product prices as per demand. These brands might come out of this period with less damage in gross margin and market share than the others, the report concludes.
