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The State Of The Ecommerce Fashion Industry: Statistics, Trends & Strategy


Editor's Note: This post was originally published in 2019 by Aaron Orendorff and has since been updated for accuracy, readability, and to reflect the most up-to-date data by Elise Dopson.

In 2020, according to WDD, 50+ huge fashion retailers experienced dips in revenue north of the million-dollar mark—including retailers with a stronghold in the fashion industry, like H&M, Levi’s, and Nike. 

Digital innovation, rising globalization, and changes in consumer spending habits have catapulted the fashion industry into the midst of seismic shifts. And, no thanks to the accelerated retail apocalypse caused by the coronavirus, the fashion sector is more unpredictable than ever.

This article explores where we are and where we’re heading, by taking a detailed look at the statistics, trends, and strategies shaping the ecommerce fashion industry in 2021 and beyond:

  1. Industry-wide data
  2. The COVID impact
  3. Clothing and apparel
  4. Shoes segment
  5. Accessories and bags
  6. Jewelry and luxury
  7. Personalization
  8. Anywhere ecommerce
  9. Flashes and drops
  10. Going global
  11. Technological innovations
  12. Subscription models
  13. Stock on demand

For an executive summary on the current state of fashion ecommerce, download The Fashion Industry Report.

Ecommerce fashion industry: statistics

1. Industry-wide data

The global fashion ecommerce industry was expected to decline from $531.25 billion in 2019 to $485.62 billion in 2020. The negative compound annual growth rate (CAGR) of -8.59% is largely due to the coronavirus pandemic. However, the market is set to recover and hit $672.71 billion by 2023.

In the US alone, the ecommerce fashion industry accounted for 29.5% of fashion retail sales in 2020. The value of the US market is projected to take a sizable chunk out of global predictions, reaching $100 billion by 2021.


Data via Statista and accessible in The Fashion Industry Report

Driving this growth are five notable opportunities:

  • Expanding global markets outside the West
  • Increasing online access and smartphone penetration
  • Emerging worldwide middle classes with disposable income
  • Innovating technologies to create experiential ecommerce
  • Harnessing the power of celebrity and influencer culture

The biggest threats to established brands include:

  • The death of brand loyalty due to market fragmentation
  • The cost of combating online return rates as high as 50%
  • Fast fashion’s ability to create and release styles on demand
  • Pressure from consumers to use ethically sourced and green manufacturing materials

We’ll get into strategies to combat these issues later. For now, let’s examine how these big numbers play out in industry sub-verticals.

Learn more: Black Friday ecommerce strategies, tips, and statistics

2. The COVID impact

The coronavirus pandemic wreaked havoc on last year’s fashion ecommerce predictions. When lockdowns were enforced globally in March 2020, 27% of US consumers said they planned to spend “somewhat” or “a lot” less on luxury and fashion items than they had budgeted prior.

Despite this, fashion online retailers have soared. Brands like Zalando reported a 32%–34% growth in GMV during the second quarter of 2020. UK retailer Boohoo claimed a 45% increase in revenue across all of its (primarily online) fashion brands during the same period. 

It’s no wonder why almost half of global fashion retailers have not adjusted their ecommerce plans since the start of the COVID-19 pandemic.

The one branch of fashion retail that has taken off is athleisure. The athleisure market size was valued at $155.2 billion in 2018—a figure that’s set only to rise. Athleisure is predicted to have a CAGR of 6.7% from 2019 to 2026 and reach $257.1 billion.

With schools, brick-and-mortar fashion stores, and workplaces shut down, almost a quarter of Americans chose athleisure clothing as a top-three category of how they intended to spend their stimulus check. 

The result? Fashion brands with a stronghold in athleisure, like Nike and Lululemon, have reported incredible growth over the course of the pandemic. 

3. Clothing and apparel

Lower digital barriers to entry for all clothing merchants offer the opportunity to market, sell, and fulfill orders globally and automatically. As a result, worldwide revenue and revenue per user (ARPU) are both projected to grow.

In Europe alone, it’s expected that each consumer will spend $921 on fashion-related items over the course of a year.

However, while clothing’s absolute numbers are steadily climbing, worldwide revenue growth—as represented by compound annual growth rate—is slowing: down from 15.3% in 2018 to 7.6% by 2022. The CAGR of the fashion ecommerce sector is projected to total just 3.3% between 2017 and 2024.

Western-market saturation is the most likely source of this trend. When growth rates are compared between the US, Europe, and China, that reality becomes even starker.

Between 2017 and 2022, CAGR is expected to settle in at:

  • 8.8% in the US
  • 8.7% in Europe
  • 14.1% in China

4. Shoes segment

As a segment of ecommerce fashion, the shoe industry saw similar peaks in market value. In global market size, the footwear segment will increase from $365.5 billion in 2022 to $530.3 billion in 2027.

Asia is dominating this segment, holding 54% of the global footwear market (compared to just 14.8% for Europe and North America, respectively).


5. Accessories and bags

Not surprising, the bags and accessories segment—although still growing at a stronger rate—will likewise see its double-digit growth—15.6% in 2018—dip into the single digits—8.7%—by 2022.

Those projections actually make bags and accessories one of the healthiest segments of ecommerce fashion, despite its absolute numbers being the smallest.


6. Jewelry and luxury

In 2019, the global jewelry market was valued at a total of $229.3 billion. It’s forecast to reach $291.7 billion by 2025.

The growth (despite coronavirus-related recessions) mirror other financial crises. McKinsey predicts that consumers will “return more quickly to paying full price for quality, timeless goods, as was the case after the 2008–2009 financial crisis.”

Jewelry industry threats stem mainly from wholesalers selling direct to consumers, plus consumer pressure on jewelry manufacturers to be more transparent about pricing. Also, it is expected the jewelry market will be dominated by major global brands like Moet Hennessy Louis Vuitton (MHLV), stealing market share from local artisan shops.

Research indicates that the best opportunity for mono-brand jewelry retailers is to use a multi-channel ecommerce strategy or an omni-channel retail approach.


Multi-brand boutiques can win market share by curating collections for specific segments—a strategy that also works well for apparel retailers.

Increasing affluence in Asia-Pacific and in the Middle East is driving up the average revenue per luxury good consumer to $313 by 2020. Despite luxury goods sales seeing sluggish growth at 3.4% annually, McKinsey forecasts indicate that ecommerce could triple in sales over the next decade—reaching €70 billion by 2025.


The biggest threat is the affordable luxury market: Should the industry offer luxury goods at multiple price points to grow the market overall? Or will affordable luxury dilute or erode the high-end luxury market—dampening consumer confidence that what they are buying is “true luxury”?

Ecommerce fashion industry: trends and strategies

The above data points offer a wealth of growth opportunities for fashion and apparel retailers—despite the huge shifts in consumer behavior, global trade, and “normal” day-to-day lives for millions around the world.

Below are some of the latest trends that you can work into your long-term fashion ecommerce strategy.

7. Personalization

By tracking user behavior, either session by session or by account, fashion sellers can build Netflix-like personalization into the onsite experience. 

Although this may start with product recommendations (i.e., if you watched or bought this, you might like to watch or buy that) true personalization extends to the very visuals that are used to present products:


Netflix personalizes the images of programs based on a user’s past viewing behavior. It’s a feature that nets $1 billion a year in customer retention value.

Ecommerce storefronts can be personalized to reflect either onsite behavior or buying history.

Moving into the future of ecommerce, shoppers will begin to expect the same kind of personalization in the ecommerce fashion industry. 

In their most basic form, these product recommendations are similar to the item a consumer is already browsing. When 24 million of these recommendations were implemented on Bandier’s category and product pages, another 1.6 million clicks were generated. Almost 8% of those who clicked a recommended product converted:


Take personalization further by tweaking recommendations for visitors who have either browsed or bought women’s clothing. They should experience a homepage experience catered to that history:


While those who have browsed or bought men’s clothing should be given an onsite experience that correlates:


Situational targeting, based on user data points like location and weather, is being promoted by ecommerce experts as a solution to the erosion of cookie tracking. Still, nothing has yet to replace the identification and tracking power—not to mention the revenue possibilities—of an email address.

In regards to the leading threat to online fashion, learning more about your customers can help you identify people who are more or less likely to return an item.

First, ensuring your return policy and process are positive experiences can actually increase customer lifetime value

Second, personalization can be used to segment serial returners and thereby avoid offering discounts and promotions like free shipping to those who take advantage of such options—especially when shown in checkout.

“The ability to customize with Shopify Plus really allows us to push it to the limit and create a custom checkout experience customers can trust and be confident in keeping their personal and payment information safe. It really makes customers feel like the site is going to take care of them.” —John Hart, Ecommerce Manager at Peepers

Third, offering virtual styling assistants to loyal customers as a value-add service (e.g., hiring real people to customize shoppers’ wardrobes online) has been proven to increase retention and margins.

Regardless, each personalization strategy builds a seamless customer experience when purchasing through your ecommerce store. 

8. Anywhere ecommerce

It goes without saying that social media has been a driving force in the fashion market.

Online shopping is skyrocketing, with six out of 10 shoppers saying the possibility to shop via mobile is an important factor in deciding which brands to purchase from. Fashion brands need to meet customers wherever they are, on their mobile devices—and not expect them to find their site by chance. 

Unfortunately, most brands are plagued by a single sin. Andy Crestodina describes the situation perfectly: “Most branded content is advertising under a thin layer of information or entertainment. Scratch the paint, find an ad. It’s the brand putting itself first.”

Thankfully, fashion and social media are a match made in ecommerce heaven. Even when it comes to explicitly “branded” content, and especially on Instagram.

Social media engagement rates for global fashion brands via Statista

  • Instagram: 0.68%
  • Facebook: 0.03%
  • Twitter: 0.03%

Particularly powerful on this front is mixing product-centric content, mainstream influencer marketing, and micro-influencers in one marketing strategy. As a model (pun intended), Fashion Nova excels on all three fronts.

With almost 20 million followers on Instagram, partnerships with celebrity accounts like Sarcasm Only, Cardi B, and Kylie Jenner, plus an army of over 3,000 micro-influencers, Fashion Nova pairs social-media dominance with a unique approach to fast fashion. CEO Richard Saghian’s claim that Fashion Nova is “the fastest-growing women’s apparel company” is no exaggeration.

And yet, social media’s real power comes from integrating multi-channel ecommerce to create anywhere commerce. 

Long gone are the days of celebrities being only someone you’d see on TV. Today, anyone with a passion can become a celebrity in the social media niche—partly due to the rise of entertainment platforms like Instagram, LinkedIn, and Twitch. 

Beyond simply sharing or advertising on social, multi-channel ecommerce integrates native selling off-site to build direct buying paths in the places your audience spends their time. Social media platforms are creating their own commerce features—like Shopping on Instagram, Facebook Shops, Buyable Pins, and more.

Just remember the words of Kevin Dao, co-founder and CEO/CCO at ORO LA: “In everything we do, we’re helping the customer imagine. We want them to imagine being the man in every picture. To imagine us being their stylist. To imagine, ‘That could be me wearing those clothes.’ We’re not so much curating content as curating imagination.”


9. Flashes and drops

Flash sales are no longer a lowbrow method of unloading out-of-season or “leftover” inventory. Instead, they’re the stuff of ecommerce fashion royalty. 

As long as they’re combined with exclusivity and anticipation. Naturally, apparel, accessories, and shoes lead the way in the flashiest and most profitable shopping days of the year: Black Friday and Cyber Monday.

So, how do apparel brands maintain brand integrity and still leverage big sales? One of the ways is by making flash sales members-only “velvet rope” experiences. Talbots, Sephora, Evy’s Tree, and Kylie Cosmetics do this regularly through exclusive collections and early access to social media fans and loyalty program members. (More on that later.)

Another way is to merge flash sales with product drops. Frankies Bikinis, for instance, regularly sells out new products in a matter of minutes. Even better, its product drops generate over six figures in sales within the first hour of launch. The downside is that monthly launches and regular flash sales are labor intensive.

Director of Marketing and Ecommerce Brittney Bowles and a co-worker used to be responsible for manually executing tasks like:

  • Unhiding products
  • Navigation changes
  • Landing page updates
  • Collection page alterations
  • Uploading hero images
  • Publishing new homepage layouts


Today, Frankies Bikinis uses Shopify's automation tool, Launchpad: “We schedule everything during normal business hours,” says Bowles, “and Launchpad does all of the work for us automatically. This is why Launchpad is our savior.”

Perhaps the most stunning example—combining social media, flash selling, and a product release—is Jordan Brand, Snapchat, and Shopify’s collaboration to drop the limited-edition Air Jordan III ‘Tinker.’

Snapcodes were displayed to fans during the 2018 NBA All-Star weekend. The codes unlocked a live in-app experience, and most purchases were delivered the same day via fulfillment centers run by Darkstore.


10. Going global

Much has been made of fashion’s new global landscape. Ecommerce, in general, has already moved beyond the West.

According to Charlotta Forslov, Online Manager at Honey Birdette: “The future of commerce—competition is getting fierce, and it’s global now. As a retailer, you need to stand out. You need to move fast, and I think you have to be customer-service-focused. You need to try and stand out in the crowd and offer the customer the best experience you can.”  

As a retailer, you need to stand out. You need to move fast, and you have to be customer-service-focused.

The 10 largest ecommerce markets as of 2020 via business.com:

  • China $672bn
  • US $340bn
  • UK $99bn
  • Japan $79bn
  • Germany $73bn
  • France $43bn
  • South Korea $37bn
  • Canada $30bn
  • Russia $20bn
  • Brazil $19m

The percentage that apparel and accessories claim in the total number of ecommerce sales are set to decline. Yet the total amount spent on those sectors is predicted to exceed $170 million by 2022.


Data via eMarketer

Because of this shift to online-first, fashion retailers are building their ecommerce websites to reach global customers. Take Culture Kings, for example. It’s built four global online storefronts to sell in three major currencies. Almost 60% of its revenue now comes from its ecommerce business.

For more on the opportunities, threats, and trends shaping international expansion, download The Global Ecommerce Guide.

11. Technological innovations

Augmented reality, virtual reality, wearable tech, and connected fitting rooms are all making big waves in online fashion. Still, in the war on returns, two innovations stand out:

  1. Online sizing
  2. Onsite search

Smart-fitting technologies like Virtusize enable online shoppers to buy the right size by either measuring the clothes in their closet or by comparing specific brands and styles to their own.

Fashion retailer Knix, which usually had thousands of shoppers line up for its annual warehouse sale, had to implement virtual fittings when COVID forced the sale online. 

Joanna Griffiths, Knix founder and CEO, said, “We made an immediate decision to accelerate our virtual fitting to market. We wanted to maintain the experience our in-store team offered, connecting and educating customers to find the best fit for them.”

Knix asked customers to choose a date and time for their 20-minute consultation. When their appointment arrived, the expert would walk customers through how to take their measurements accurately and choose the right size. 

Now, Knix hosts thousands of virtual fittings every month—with 97% of all available time slots booked to date. 


Luxury jewelry company With Clarity has grown 900%—from $2 million to $20 million in revenue—over the last year. Its CMO, Slisha Kankariy, attributes some of its success to virtual try-ons:

While it is stress-free to purchase a low-cost item online, it can be stress-inducing to purchase something that has a high dollar value and emotional value sight unseen online. The best retailers will be able to offer an online experience that alleviates the concerns about purchasing something a consumer hasn't held in their hands. 

We offer a free at-home preview that allows customers to see a highly realistic 3D-printed ring customized for metal color, carat weight, and diamond shape. 

Because we offer this service for free, customers gain confidence in our design and quality. This blend of online and offline that brings convenience to their doorstep goes a long way in blending the best of online and offline. 

Throughout the coronavirus pandemic, we have been able to offer this service to our customers to ensure they have all the benefits of shopping online and offline rolled into one.

Virtual fitting room apps go beyond smart fitting and let customers use their smartphones or virtual reality glasses to conduct 3D body or face scans—ensuring accuracy when customers try on cosmetics, jewelry, or fashions online before making a purchase.

Perhaps the simplest and most-useful—a form of artificial intelligence and machine learning revolves around onsite search. Fashion Nova’s predictive autocomplete, for instance, not only saves shoppers time, but also front-loads popular products:


As Paul Rogers points out in Ecommerce Site Search Best Practices: “If I’ve been interacting with men’s Nike products, the associated products would then be boosted for other queries. The use of machine learning adds a second layer of accuracy, prioritizing products based on their performance and also ensuring that results are improved over time, based on the ‘learning’ from user behavior (e.g., the products that are being clicked or purchased most frequently).”


Voice-powered AI search (think Alexa for fashion) can help make recommendations based on a user’s past purchase history and online behavior as well as enable voice-activated purchases within an app or augmented reality.

Beyond that, wearable fashions and accessories that are equipped with special sensors provide an opportunity to use situational targeting to influence purchase behavior. For example, a shoe manufacturer could identify whether a runner has an issue with their gate. The manufacturer could then use that data to recommend a better shoe for that individual.


12. Subscription Models

Subscription-forward businesses are on the rise across all ecommerce segments—fashion included.

Take TC Running Business, for example. Before COVID-19, almost all of its sales came through in-store visits to its flagship Minnesotian stores. When lockdowns meant both retail locations had to be shut, it had to transfer its entire business online.

That shift to online was the starting point for its subscription model, Run Squad, a paid annual membership that gives member-only discounts through the online store.

Jeff Bull, Brand Director, says, “We started to see people get excited outside of our own city, and outside of our own state, because it is a good deal. We are able to control the experience a little more and make it a little more personal and hands on.”

Fast fashion retailers like ASOS, which have always been online-only, are even tuning in to the idea of subscription models. Last year, it announced Premier Delivery. For just £10 annually, shoppers would get unlimited next-day delivery on any orders they placed through the site. That bonus is highlighted in most of the site’s product descriptions.


13. Stock on demand

The coronavirus pandemic undoubtedly caused issues with supply chains. Because of this, some fashion ecommerce sites are ditching their stock—and, instead, ordering items on demand. 

One of those retailers is Dirt Pitch Apparel. Founder Patricia Lopez says, “The biggest trend we have noticed was the disruption of supply chains. Inventory levels were deeply affected by COVID, and we had to shift our strategy. Instead of working with our overseas suppliers and overstock to minimize uncertainties, we started sourcing from several local American factories and printing facilities. This change gave us a lot of flexibility, minimizing our inventory levels and improving our cash flow. Most of our orders are now handled on demand by our sourcing partners.”

To coincide with this, the number of fashion dropshipping retailers is on the rise. Flexible locations, low overheads, and the promise of only paying for stock once you receive an order are appealing to retailers.


Data via Grand View Research

Want more about the state of ecommerce fashion?

The state of ecommerce fashion is developing more quickly than ever. What worked two years ago is outdated now—largely due to the coronavirus pandemic wreaking havoc on traditional shopping behaviors and forcing brick-and-mortar retailers online. 

For an executive summary on the current state of fashion ecommerce, download The Fashion Industry Report.


Inside, you’ll get one-pagers detailing:

  • Data on the opportunities and threats
  • Business spotlights for growth
  • Tools for selecting the right fashion platform

Special thanks to our friends at Shopify Plus for their insights on this topic.
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