Apparel Greets 2019 with Price Increases

Retail, especially brick-and-mortar, has had to jump through hoops to get consumers to make a purchase, let alone get them in-store. Consumer confidence rose, leading to a fruitful holiday shopping season. Now, that looks short-lived as apparel prices see their first increase since February 2018, according to Sourcing Journal Online.

Differences in categories of apparel

Usually, this month sees shoppers enjoying post-holiday clearance sales. Instead, they were met with an average 1.1 percent increase in price. A 1.6 percent jump plagued Womenswear, while outerwear saw a 4.2 rise, suits and workwear were hit with 3 percent and nightwear, swim, and accessories grew .6 percent. The outliers were dresses, dropping 1.4 percent and menswear, which fell .7 percent.

The rise in sourcing costs

The apparel and textile industry is a tricky industry because the majority of production still requires human labor. Although automation is becoming increasingly-involved, it’s not enough to alleviate rising labor costs. Besides, new tariffs are increasing prices across the board. While many companies are looking to diversify the supply chain, many are still heavily invested in China. Sourcing Journal explains,” almost all current sourcing countries are getting more and more expensive.”

Consumer shifts

Fickle consumer demand is another factor that is plaguing the industry. The McKinsey State of Fashion 2019 report details speed-to-market is the next vital proponent for companies to stay afloat. Besides wanting it now, consumers want it on sale. More than ever, shoppers don’t want to pay full price for anything.

Unless you’re in the luxury market, your target customer is always checking to see if they can find a product cheaper on Amazon. For retailers to compete with free shipping and returns, they’re either having to eat those costs or price engineer them.

This push and pull is the constant struggle for apparel brands. Do they succumb to the competition with a price increase and lose business? Or, do they absorb the cost and possibly go out of business altogether? Judging by the first market-wide price increase in almost a year, it looks like the latter.

Author:  Christine Duff

Christine wants to live in a world filled with cutting edge fashion, beautiful words and and an endless supply of leather jackets and boots. A product development grad of FIDM, she was the Editor-in-Chief of MODE Magazine where she reignited her love of storytelling. She has diverse experience within the industry with trend research, art direction and styling editorial spreads. She gained her most notable experience working in Los Angeles at the satellite operation for GQ and Vogue Thailand. Christine is passionate about social science and the role it plays in the consumer goods industry and apparel in particular.

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