Fashion Accessories Market Research & Business Solutions

This report combines our retail point-of-sale information with Stylitics reporting on the ClosetSpace app. Pinpoint latest trends and emerging areas of growth in the handbag market. Learn which items to keep an eye on – and get expert analysis on what the trends really mean.

The Millennial customer treats a handbag purchase as a multi-step process, and 41 percent said they started thinking about their most recent handbag purchase more than a month in advance, according to a new report from global information company The NPD Group, created in partnership with Stylitics. The New Handbag Customer Revealed 2016 study examines the closets and mindset of Millennial women to understand their needs, aspirations, inspirations, and the triggers that make them purchase.

The three key components of the $334 billion retail fashion segment, apparel, footwear, and fashion accessories, are each in different positions when it comes to the business, according to leading global information company The NPD Group. The apparel industry, which represents 65 percent of total U.S. retail fashion dollar sales and spans everything from basics to jeans, continues to enjoy the consistent growth experienced over the past few years. Conversely, the more trend-driven footwear and fashion accessories industries are now experiencing sales declines, keeping overall retail fashion sales in the 12 months ending February 2017 even with results from the prior year.

Sales of smaller size handbags are on the rise and smaller money accessories, like card cases and coin purses, are cashing in on the trend. According to The NPD Group, a leading global information company. Dollar sales of money accessories – other than wallets – increased 13 percent, to almost $23 million in the 12 months ending October 2016.

The NPD Group, a global provider of information and advisory services, today announced that it has acquired Brazil-based Sim2M, a South American leader in market research for the toys industry. The acquisition by NPD’s Brazilian subsidiary, NPD Brasil Market Research Services Ltda., expands NPD’s global footprint, reinforcing its position as the preeminent provider of toys industry market research.

In the 12 months ending September 2016, premium point-and-shoot cameras and instant print cameras are two of the categories that have experienced growing dollar sales, as camera makers focus on offering unique products targeted to specific customer needs and interests. According to global information company The NPD Group, sales of premium point-and-shoot cameras (priced above $1,000) have grown 24 percent over the last 12 months (ending September 2016), led by Sony, Fujifilm and Leica. Separately, the resurgence of a retro trend – instant print cameras – has led to an increase of 148 percent in sales during that same period.

One-third of the handbags purchased in the U.S. in the 12 months ending June 2016 did not have a visible logo, according to The NPD Group, a leading global information company. The sales of handbags without a visible logo increased their share of the market in the past year, and this is a style trend that is crossing generations.

I’ve finally done it. I had to. My shoulders couldn’t take it anymore. What major life change am I referring to? I made the switch from tote bag to backpack for work and travel. And it’s great. 

It took me a long time to find the right backpack – not too bulky, and something that wouldn’t make me look like I was heading to class instead of to the office. There actually isn’t a lot out there that fit the bill. With the exception of a few brands that are actively fusing fashion with function, most fashion backpacks can’t accommodate all that is needed for the workday (and beyond), which is what I attribute the seven percent backpack sales decline to during the three months ending February 2017. And, this decline happened despite the fact that we are seeing more backpacks in-store and on the street, from designer to mainstream.

First, I want to put the backpack sales decline into perspective. The overall bag category is having one of its toughest years in recent history. Dollar sales of women’s and unisex bags declined 18 percent in the three months ending February 2017, so the backpack segment outperformed the total bags business during this period. In addition, compared to two years ago, backpack sales are up 60 percent.

The more recent decline troubles me because I would expect the backpack category to be experiencing continued growth. Coming off of the strong growth last year, retailers bumped up their backpack assortments; the average number of items sold in stores where backpacks are carried grew 18 percent. This increased assortment did not lead to more sales, meaning the sales velocity per item (a measure of how fast an item sells) decreased. It’s not a good sign when more items are available but we see lower sales. This suggests that despite the fact that brands and retailers are giving us more backpack options, they might not be the right options.

I see the problem as a fashion vs. function disconnect. The major fashion bag brands have an opportunity to infuse more features, like convertible straps or room for a laptop, into their backpack styles, or risk losing their consumer. New brands are entering the market, and brands more traditionally focused on function (like athletic and luggage brands) are now upping their style game.  On a positive note, there are some leading indicators that the softness in this category might be reversed soon.  The Middle Atlantic and Pacific census divisions, two very important regions when it comes to fashion trends, are seeing an increase in velocity per item for fashion backpack styles – meaning these items are selling faster in the most recent 3 month time period than they did last year.   

Sure I’ll still tap into my handbag collection for other occasions, but for my commute and travel, I’m now hooked on the backpack. The industry needs to give consumers a reason to buy something new before the category can see bigger and better growth. This includes brands and retailers focusing on the features and benefits that busy consumers value. 

Source: The NPD Group/Retail Tracking Service, 3 months ending February 2017 – Fashion and Everyday/Lifestyle Backpacks; Better, Bridge, and Designer brand classifications

This year will be one full of change for fashion at retail – some is overdue, some is driven, but all of it is necessary. The days of the consumer following trends have faded. Consumers are now creating their own looks, seeking apparel, footwear, and accessories that fit into their lifestyle, not the other way around.

Active will enter its second generation in 2017. Active apparel companies will transform their product to be less focused on performance and more focused on lifestyle. At the same time, lifestyle brands will try to become more active-oriented.  

Footwear fusion will be the key. The hybrid approach to activewear will carry over to footwear in 2017 as well. The focus for feet will be less about dress and more about innovation and comfort.

Casualization will give pajamas new function. The next generation of casualization will mainstream the use of pajamas as weekend wear. This is not a new concept – college students have been doing this for years – but now it will be embraced by those who didn’t just have an all-nighter cramming for a final.

The little things will matter. Consumers will continue to focus less on mid-range purchases, and more on big and small spends. It’s the latter that will benefit fashion accessories. The affordable splurge on a wristlet or keyfob will maintain its appeal from 2016.

Organic fibers will come to the rescue of activewear, and our noses. The apparel industry will begin to rebel against the negative properties of activewear, such as smell. Look for increased promotion of organic fibers calling synthetic fibers out on their challenges with odor and durability.

Struggle and success will weave together for denim this year. Denim has been on the rebound over the past year, and it will struggle to return to its true glory in 2017. But some brands will fill their pockets and find growth.  

There will be an evolution in accessorizing. Technology and innovation have an important place in the world of accessories. The emphasis on carrying a cell phone or tablet in style will be more important than ever. But even the accessories will have to be functional and innovative in order to fit with the current consumer criteria of convenience, need, desire, and price.

Apparel will face a new kind of opponent. The apparel industry will struggle to remain a priority spend, competing for their share of wallet. But it’s not just technology, apparel will go up against intangible purchases too, as younger consumers seek and spend on services and experiences more than ever.  

It is natural that every generation evolves. For decades, parents have continued to tell their children how life was so different when they were growing up.  However, what seems to be different this time is the role of the child and the use of buzz words like “technology”.  In the past 10-15 years children have grown up with technology at their fingertips and have had the ability to access anything at any time.

So how does this affect the #1 category moms spend their money on?

The NPD Group’s Kids Share of Time and Wallet study  captures a focused perspective on how children 14 years of age and younger spend their leisure time and the impact that this has on mom’s overall spend.

The study reveals that apparel and accessories capture 27 per cent of moms weekly spend, 36 per cent if you include footwear (9 per cent). That’s 0.36 cents out of every dollar. So why has the Canadian Children’s apparel market continued to face challenges? Children’s apparel and footwear consumers are generally spending more and buying less. With consumers buying less, the fight for dollar share becomes a tougher battle.  So how do you win that fight?

Give kids what they want! Twenty-nine per cent of moms who said they spent more on apparel and accessories this year said it was at the request of their child. According to a recent NPD Group study, moms estimate that their children get 50 per cent of what they ask for. Furthermore, 70 per cent of moms purchasing decisions are based on her child’s influence. To win wallet share we must focus on the child.

So what do kids ask for? Knowing that the main influencers in a child’s life are friends, it is important that brands and retailers participate in the interaction of their daily activities to be relevant and part of the conversation. 

By understanding how children spend their time we can identify the apparel and footwear trends that cohesively live in their lives. Apparel and footwear should enhance the child’s everyday actions and be a positive part of their daily interaction.

Three quarters of kids watch TV and movies at home; over half of kids watch TV, movies or videos on a mobile device on a weekly basis. Today’s child can now have access to their favorite characters at any time or place, adding to the importance of character licensed apparel and accessories. This is especially evident in the boys’ apparel market as licensed characters and sports have posted double digit growth (based on 12ME April 2016) compared to a year ago.

Girls on the other hand have posted a slight decline in apparel licensed characters and sports (12ME April 2016). With Girls over indexing in reading (non-homework related), listening to music and hobbies like arts & crafts, the influence is more on the creative imagination, confidence building slogans and DIY mix and match.

For footwear we see that the need outweighs the want. As 23 per cent of moms who spent more on footwear said it was at the request of their child. While 68 per cent of moms who spent more on footwear said it was driven by tangible needs, such as a size change or occasion. Moms are also more likely to research footwear online (21per cent) prior to purchasing compared to apparel and accessories (15 per cent ).

Technology has not just become a large part of the child’s daily interaction; it has become a large part of mom’s research process for her future purchases. In fact, 55 per cent of moms research their purchases via reviews on retailer websites before purchasing.

As the child ages, technology takes up more of their share of time. 25 per cent of tweens and over 50 per cent of young teens spend time on a social network via mobile in the average week. Spending time on a social network is the #1 activity they engage in every day. Think Mobile apps, YouTube, Pinterest and Instagram when interacting with tweens and young teens.

It’s important to remember that apparel, accessories and footwear are an important part of the child’s daily routine and the more you get to know their daily activities and behaviors, the more you will succeed.  Today’s child likes to feel involved in the path to purchase.

The second quarter of the year is generally a transition period for the U.S. athletic footwear industry. In this respect it’s an important time for retailers, as they begin to turn their attention towards the biggest seasons for the industry: back-to-school and holiday. Comparing Q2 2016 to Q2 2015, both dollar and unit sales grew by 5 percent, and sales improved in Q2 from the Q1 trend. This set a healthy pace and one that retailers and manufacturers should be pleased with stepping into the next half of the year.

U.S. Athletic Footwear Results, Q2 2016 vs. Q2 2015

Children’s athletic footwear experienced the highest uptick in sales, and was the only wearer segment to see an increase in average selling price. Why is the children’s market performing so well? The answer has much to do with the fact that athletic fashion is now the wardrobe of choice for many adults, translating to consumers seeking the same for their children. Just like their Millennial parents, Gen Z has an affinity and loyalty to sneakers and athletic brands. The growth in categories that carry higher price-points, particularly the classics category, and popularity of teen girls buying boys-sized shoes, is driving much of the positive performance. The results can only get better for children’s footwear as the back-to-school season kicks into high gear.

Segueing into the second half of the year, there are a few key developments that I expect to unfold for back-to-school, and even stretch into the holiday season:

First, classics will continue to shine as the growth story, but brands will have to watch their supply and demand closely. It’s very easy for fashion products to get over supplied, which can really hurt a market.

On the other hand, I expect performance basketball to be challenged, but less so as we begin to lap the fall off in business that started during back-to-school last year.

The running category is seeing a sales boost as some new and exciting performance running products are being introduced now. It’s time to keep an eye out for ‘performance running as fashion’ to make a return.

In terms of brands, Adidas and Under Armour will likely be the standout athletic footwear brands for back-to-school. Both had outstanding results in Q2; Adidas sales increased by 75 percent, while Under Armour sales grew 68 percent.

Many forces are at play within the athletic footwear space today, and as the current momentum picks up more speed in the upcoming months, it will be interesting to see how the back-to-school season, and beyond, unfolds.

Source: The NPD Group, Inc. / Retail Tracking Service, April-June 2016

Data is collected from the athletic specialty, sporting goods, chain store, department store, and other channels. Athletic footwear includes the following categories: Sport Leisure, Outdoor, Performance, and Work/Occupational/Safety.

When I ask myself ‘why is loyalty so important’, I look outside of retail for a deeper understanding.  I know it’s more than fair to expect that my family and close friends will get more of my time, and probably more of my money when push comes to shove as opposed to a stranger.  It goes without saying, and definitely occurs with little resistance on my part.  It’s all an innate reaction.  So then it all starts to make sense as to why retailers and manufactures alike rely on loyalty as strong customer loyalty translates directly into sales when it comes to the Canadian fashion and apparel industry.  Imagine a world where consumers give their time and money without even a second thought?   And they came back time and time again?

Let’s take a look at one of the spotlight categories in Canada - both in terms of dollars and units - the women’s activewear category. In this category alone, three-quarters of female consumers, 73 per cent, indicate they are loyal to at least one brand. These loyal consumers will spend about twice as much on a brand they are loyal to, compared with a brand that evokes little or no loyalty. Furthermore, when it comes to repurchase intent in this category, loyal consumers are about 35 per cent more likely to buy again and again, making loyalty important for both growth and sustainability.    Now if a retailer can replicate loyalty success amongst all its key categories – the return would be significant across the board.

At the end of the day, in an economy where there is growing uncertainty, political unrest and increasing prices, there is a growing consumer set that want to ensure that every hard earned dollar is going to something that they know, trust and feel good about.  On the retailer side, while innovation is key to attracting the consumer initially, what will cause a consumer to not want to go anywhere else time and time again in an economy where there are a multitude of entrants in each category – that loyalty quotient is the answer to leading against the pack.

The journey of buying a handbag “seems closer to buying a car than to buying clothing.” That’s the take of Rohan Deuskar, the Founder and CEO of Stylitics, based on insights from a new study entitled “The New Handbag Consumer Revealed.” The NPD Group recently partnered with Stylitics, the creator of an app that tracks the contents of 300,000 Millennials’ closets, to understand the factors that influence women as they look to purchase a new bag.

Rohan’s quote might seem a bit extreme, but he was reacting to the findings that are detailed in the “Customer Journey” section of the report. We learned that women are doing an extensive amount of research prior to purchasing a bag, leveraging a number of resources like websites, retail stores and social media. It is a rational process, as handbags of course serve a functional purpose, but they also serve an emotional one. A woman considers the purchase to be an investment in her style and personality, regardless of price point, and she does not want to make a wrong choice. Just like buying a car, it’s a very personal choice. I can relate to this, and studying the findings of this research offered me the opportunity to do a bit of soul-searching, comparing my own behaviors to those of the women that were surveyed and interviewed, and I learned a few things about myself. What follows is an exclusive tell-all about my handbag ownership and buying behaviors.

The biggest revelation for me was that I’m a “Status Seeker” (there – I said it!). In terms of my closet inventory (the brands that I own and have purchased recently), I fall into the “Luxury Seeker” sub-segment. This means that most of the brands I own are from the Status brand group, but like the typical Luxury Seeker, I do splurge on Designer brands occasionally. That’s where the similarities to buying a car come in – when I’m going to spend a large sum of money that I’ve set aside for a bag, I research for weeks or months before making a decision. Like many of the respondents, I don’t like large logos, but do want others to recognize what I’m carrying (who doesn’t like a little approval from others?). I also learned that I belong to the segment with the smallest collection of handbags (although my husband would never believe it). In this regard, I’m more like a “Luxury Loyalist,” and I suppose my aspiration is to one day have my brand assortment match that of this segment as well.

How much do you know about your current, target, and/or aspirational consumer? How does she approach buying a new bag? Chances are, like I do, she fits into a number of the segments profiled in the study, which means your competition is wider than you may have thought, and that has significant implications on your product and marketing strategies.

And by the way, I’d like to be a loyal luxury car buyer one day too…