Off-price fashion to grow faster than whole market in 2025-2030: Study

One reason for this success is the strong online presence of off-price retailers, which put their offerings in a good position to profit from the pandemic’s online shopping boom, the report, titled ‘Mastering off-price fashion in an omni-channel world’, said.

It draws on analysis of global data on the off-price market and a survey of 11,000 consumers in 10 European countries.

“Online sales account for 40 per cent of the off-price market and they are growing extremely fast right now—about 13 per cent annually, on [an] average,” says Katharina Schumacher, a digital expert and author of the study.

“This development creates opportunities for fashion companies to have their brands reach new consumers who would not normally consider making a purchase at the full price,” she continues.

European shoppers are especially interested in bargains. Many consumers in Europe made multiple online purchases during the past year. In the off-price segment, growth of online sales tripled—compounded annual growth rate jumped from 9 per cent in 2020 to 19 per cent in 2021.

Annual growth till 2025 is projected to be 13 per cent. In addition, off-price provides a sustainable way for fashion brands to sell their excess stock. Typical off-price enthusiasts shoe shop online are especially interested in products in the luxury, affordable luxury and premium categories and do their shopping on specialised platforms like dress-for-less, BestSecret, brands4friends or Scarce, said a McKinsey press release.

They care about style and usually start shopping without a specific brand in mind. But they enjoy comparing prices and spend 2.3 times more on their purchases than other groups of fashion customers.

In Germany, 30 per cent of off-price customers spend more than €1,000 per year on fashion purchases , and account for 70 per cent of total fashion spending. “At the same time, these buyers are fundamentally willing to pay the full price for premium and luxury brands,” says Achim Berg, a McKinsey expert on the fashion industry.

Off-price shoppers who visit bricks-and-mortar stores are often younger and buy more than other fashion consumers. They enjoy going to outlet centres, but tend to avoid regular luxury stores in upscale shopping districts.

Fibre2Fashion News Desk (DS)