The Evolving Apparel Sector—Online Sales and Embedded Technologies

plunketts-apparel-shoes-and-textiles-industry-almanac-2019

Plunkett Research estimates the global retail clothing and footwear market at $1.8 trillion. This includes sales by ecommerce and other non-store retailing methods. However, ecommerce, not traditional retailing, is the booming part of the apparel industry. Shoppers are attracted by free returns, unique startup brands that they learn about through social media and the ease of finding sizes and colors that may be out-of-stock in physical stores. Simply put, retail store chains are suffering—many have downsized significantly or found themselves in deep financial trouble, as exemplified by the August 2019 bankruptcy of Barney’s high-end clothing stores in the U.S. Apparel store chains that prosper will be adept at both bricks and clicks—operating very well-designed ecommerce sites that mesh seamlessly with their store operations.

Another prime indicator of the growing power of ecommerce in the apparel industry is Amazon. Amazon has been investing very heavily in making it better and better to shop for shoes, apparel and accessories online. One big leap forward was its 2009 acquisition of innovative online shoe seller Zappos for $850 million. Zappos is noted for offering every size of virtually every shoe made, while making returns easy of the shoes don’t fit the customer. Ever since, Amazon has been improving its online apparel selections and descriptions, including the establishment of a photography studio where models spend their days posing in fashions sold on Amazon and posting comments about how the items fit and feel.

Meanwhile, some exciting new clothing brands that started out online-only have been opening physical stores. Bonobos, a trendy men’s fashion seller, launched in 2007 by Stanford University MBA students, had soaring success online by focusing on well-tailored pants. It was acquired by Wal-Mart in 2017 for $310 million cash. This gave Wal-Mart a footprint in upscale merchandising, and enabled Bonobos to open small, storefronts it calls “guideshops.” These stores enable customers to look, touch and perhaps try-on items, and them order them online for prompt delivery.

This is a dynamic trend for growing online brands—by one count, as many as 30 booming ecommerce companies have opened storefront chains, including fashion eyeglasses company Warby Parker. These firms see small stores as ways to build their brands and cement their relationships with customers, while maintaining the shopping convenience of robust online sites.

Electronics and Sensors Embedded in Apparel

Advanced technologies are slowly starting to become part of clothing, shoes and accessories. Apparel and fabrics are being redesigned to incorporate sensors or at least provide connectivity to personal electronics. Textronics, Inc. makes fabric with circuitry, sensors and a functional component woven in that render the material capable of sending signals to heart rate monitors, which are popular among serious athletes. Textronics makes a sports bra under the NuMetrex brand which senses the wearer’s heart rate and communicates that data to a wrist monitor. The bras free female athletes from wearing separate heart rate monitor straps and sensors.

Adidas has been innovating with sensors as well. Its latest effort is a line of smart products under the miCoach brand, including fit smart, a wristband which measures heart rate, calories, pace and speed, distance and stride rate; smart run, which is an all-in-one running watch; smart ball, a soccer training ball embedded with a sensor that measures speed, spin and strike force; x_cell, a wearable sensor that measures vertical movement in addition to heart rate and running speed; speed cell, an on-shoe sensor; and the Adidas heart rate monitor with strap. Most Adidas miCoach sensors link to selected smartphones. OMsignal, a Montreal-based company, introduced machine-washable t-shirts that measure the wearer’s heart rate, breathing and body temperature.

Fitness apparel maker Under Armour invested $710 million in 2014 and early 2015 buying fitness app companies MapMyFitness, MyFitnessPal and Endomondo. MapMyFitness is U.S. firm that offers an app aimed at runners and cyclists. MyFitnessPal is a calorie counting app with a community of 150 million users. Endomondo is European app for logging exercise data for a variety of sports. Analysts expect Under Armour to develop clothing that tracks and analyzes fitness data.

Ralph Lauren Corp. designed a shirt with sensors that read biometric data such as heart rate and calories burned, and communicates that data to an accompanying app for the iPhone or Apple Watch. Clothing firms see technology as a way to distinguish themselves from other brands, offer value-added products at higher prices, and take advantage of consumers’ deep relationships with apps and smartphones.

By Plunkett’s Apparel, Shoes and Textiles Industry Almanac 2019