What the Second Quarter Says About Apparel
- Salesforce Commerce Cloud
Let’s take a moment to talk about apparel brands.
Since March we have witnessed a tale of two stories: the record highs of online sales and the record losses of overall sales. And within the economy different categories have been performing differently. When it comes to apparel, it has contributed to dragging down retail as a whole due to locked stores and customers’ unwillingness to spend on clothing, who alternatively adjusted their budgets toward other areas of commerce.
Despite the overall situation of the apparel industry, some brands have been doing better than others. And we know this by peeking at their takings during the second quarter.
In the middle of April, clothing purchases hung around the mid-teens percentage-wise; more recently, 30% of people have bought clothing — slowly reawakening the industry from its painful slumber. And regarding specific demographics, things look even brighter. For example, among communities living in the northeast, people were much more likely to buy clothing, given that 35% had admitted to buying clothes lately. This may be explained by the fact that this region is currently the most under control regarding Covid cases. And also, people aged 18-29 are equally as likely to have bought clothes lately.
So why don’t we take a look at some apparel brands and their second quarter performances? Some have fared better than others.
Abercrombie & Fitch
One of the apparel brands that surprised many analysts was Abercrombie & Fitch, which recorded year-on-year ecommerce growth of 56%, offsetting some of its drop in total revenue of 17%.
Despite overall losses, the decline of 17% was much shallower compared to the overall grimmer picture of apparel. In fact, so absurd is this moment that we are living in that Abercrombie & Fitch actually gained market share in the second quarter despite its losses. Some losses are better than others!
The women’s clothing retailer actually did better in the last quarter than the previous, despite the fact that its stores had been opened for the same limited amount of time — roughly. But it didn’t come without cost, because Chico’s dished out very deep discounts in order to move stagnant stock.
The company reported losses of $46.8 million in the last quarter. But its sales still improved by 9.2% from the first quarter, mostly through stronger digital performance.
The fashion retailer that tailors mostly to younger men and women is set for a fresh ecommerce strategy, according to its CEO Timothy Baxter. That announcement may seem rather delayed considering the conditions for the last half a year, but its ecommerce has already been doing quite well.
Overall sales dropped 48% year over year in the second quarter, yet its ecommerce operations have been making positive inroads. Express has the advantage of having Adobe Experience Manager as its content management system, which is going to provide them with the digital firepower that they need to strengthen their defences and advance towards higher ecommerce ground.
As highlighted in an earlier article, Urban Outfitters were one of the ecommerce high flyers leading up to the pandemic. Online sales grew 10% at the end of 2019, and was the 10th best-performing online apparel retailer.
Home to multiple brands including Free People, Anthropologie, and Urban Outfitters itself, and hosted on Salesforce Commerce Cloud, Urban Outfitters was a true standout in the second quarter. For all of its brands, they all reported growth — an incredible feat given the circumstances! — with Urban Outfitters hitting a profit of $34 million in Q2.
While apparel brands cannot control the external circumstances that are inflicting great damage on their businesses, what they can control is how they organise or reorganize themselves to gear them towards stronger digital experiences, better ways to build brand loyalty, and ultimately higher growth in ecommerce sales.
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