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How Americans Spend on Clothing?

We live in precarious economic times. While the unemployment rate is at a historic low, the inflation along with factors is keeping Americans from spending their hard-earned money. 

A report by the Bureau of Labor Statistics gives an important overview of how average American households spend their money. It showed that 3.1% of the total expenditure (valued $1,833) went into apparel and services. 

But that is just a brief overview of the entire situation.  When you dig deeper, there are several trends that speak volumes on how average Americans spend on clothing. To get the clear picture, it’s first important to understand how the spending patterns have changed when it comes to fashion.

Shoppers Are Spending Less Percentage of their Income on Clothes 

When one looks at American shopping statistics, some interesting trends are revealed. Risk management firm Deloitte spent a year analyzing government data, communicating with industry leaders, surveying around 4000 customers and examining more than 200 billion credit card transactions through its consumer-insight division. 

Their report articulates that despite everything, the spending habits of the everyday American has not changed that much. But there is one exception, the share of money spend on apparel has almost halved since 1987. 


Almost across all age groups, the percentage of money spent on clothing has decreased. In 1987, buyers dedicated around 5% of their discretionary spending to their wardrobe. But in 2017, the same number dropped to 2%. 

The comparison of how much percentage Americans spent on clothing between 1987 and 2017 becomes more interesting when you factor in the rise of eCommerce. Although it’s easier to buy clothes than it was 30 years ago –people are still dedicating less portion of their income to fashion. 

Despite average Americans spending per year decreasing on clothes, the global eCommerce fashion market is thriving. 

Global Fashion Ecommerce Market is Expected to Grow to $873 Billion

Statista reported the global fashion market to be around $533 billion in 2018. Footwear made up 25% of the market with bags and accessories having a 10% share. Understandably, apparel had the majority portion with 65%.

The fashion industry as a whole is expected to hit $873 billion by 2023.


While the internet is flooded by online retailers targeting different niches, few familiar names continue to dominate the market. 

Amazon Sells More Apparel than Any Other Website

When you think about Amazon, fashion is not the first thing that comes to your mind. Of course –the company has come a long way since it was an online book store in a garage. Still, the website isn’t renowned for hosting trendy and fashionable apparel. 


But according to a survey Internet Retailer, Amazon is website where Americans spend most on clothing. 

Most People Buy Apparel from their Smart Phones

Recent online shopping statistics reveal another great piece of information. Not only does mobile provides the most traffic to fashion sites (65.4%) but most sales (57.1%) –higher than the overall average. 


The population under the age of 34 in both the United States and the United Kingdom spend on clothing through their smartphones. 


But for a number of mobile shopping are in it for the experience. Ragtrader reports 67% of shoppers to use their smartphones to window shop for fun. 77% of these online window shoppers make impulse buys. 


The growth of mobile shopping is quite extraordinary. It’s estimated that by 2021, mobile will dominate the 54% of all sales. 


Mobile has become such a force that it drove the majority of the traffic on the cyber week 2019 (November 25-29). Most of the transactions during this period also happened through cell phones.


On a similar note, the orders on Thanksgiving coming through mobile as a whole were up by 11.5% this year.



Despite the growing influence of fashion eCommerce, believe it or not, there is a contingent of shoppers that have never bought clothes online. 


14.9% of US buyers Don’t Buy Clothes Online

While ordering clothes with a few clicks is a hip thing to do for many, it’s not how many American like their money spend on clothing. As per Internet Retailer, 14.9% of Americans don’t spend on clothes online as opposed to 6.4% who don’t buy from brick and mortar stores. 

Meanwhile, 20.4% of fashion-lovers get their fix from an online retailer at least once a week. The majority (30.5%), however, orders online once or twice a week. 
Interestingly, 34% of shoppers pay a visit to their favorite stores once or twice a year. Comparatively, 36.1% buy offline every 2-3 months. 


One can assume the major reason some customers prefer in-store is because they do not trust online retailers. These customers prefer to try on the apparel themselves before spending any money. These Americans spend on clothing inside stores rather than in front of a Laptop screen.


It’s interesting to note this in light of the fact that overall trends favor online commerce over brick and mortar. For instance, the online sales grew on Black Friday 2019 for eCommerce sites but fell for conventional retail stores. 


It would also be fair to point out that Desktop computers are a preferable option for many shoppers. When you look at the conversion rates on the shopping season, the desktop has a clear lead on other devices. 


But any analysis on American spending statistics would be incomplete without highlighting an important factor–the generation gap. 

Millennials Make Twice As Many Fashion Purchases Online than Boomers

How much average an American spends on fashion is greatly influenced by their age group. Although Millennials are accused of ‘killing’ everything under the sun, they’ve taken a liking to online fashion stores. 

But what really constitutes a Millennial? Well, Millennials are the generation sandwiched by Generation X and Generation Z. 

  • Baby Boomers are born between 1946-1964
  • Generation X is middle of 1965-1980
  • Millennials or Generation Y are born between 1981-1996
  • Generation Z  are born between 1997-2015

Studies shows 84% of Baby Boomers prefer brick and mortar stores while getting clothes. Among other causes, the hassle of returning faulty items is cited as the common reason why boomers are not spending on clothing on sites like Amazon.

But according to the Bureau of Labor Statistics, the hip Millennials love ordering their apparel from the internet. The generation spends twice as many as boomers on online clothing but they spend less per transaction.   

It’s interesting to note that the amount Americans spend on clothing per transaction increases with age:
  • $101 for Millennials
  • $160 for Generation X
  • $173 for Boomers

Generation X spends most on clothing per year with $2,300. This makes average cost of clothing per month around $192 for this generation.  Millennials follow Zoomers with $1,950 per year and finally –Boomers spent the least amount at $1,390.

A study conducted by Tinuiti concludes that Millennials and Gen Z –who have the shopping power of over $200 billion–, dominate when it comes to buying online. 57% of Millennials and 63% of Gen Z prefer buying from the internet while the latter gets item directly from the brand’s website. 


Millennials are also big into saving money. This is perhaps the reason why the overwhelming majority of them planned on shopping on Black Friday and Cyber Monday 2019. 
While age has a significant influence on a person’s online habits, gender plays an important role too. Women’s spend on clothing is much more than men and it seems this trend will continue well into the future.

Men Shop More Frequently Online But Buy Fewer Clothes

A study from Business Insider Intelligence shows that men shop online on a more frequent basis than women. According to the report, 40% of men from ages 18 to 31 would prefer to ‘buy everything online’. Only 33% of women shares the same sentiment with many still prefer the classical in-store approach. 

How Americans spend on fashion cuts through generation. 86% of male teens are reported to have shopped online compared to 76% teen girls. 

But things get a bit interesting when you compare American spending habits statistics based on gender. 


American women’s money spending habits are almost unsurprising. Clothes make up 40% of the products women order online. Books, grocery and medicine are other items they get from the web. Meanwhile, men order more heavy-duty items such as furniture and electronic equipment. The amount men spend on apparel failed to register in this particular study. 

So how much does the average man spend on clothes per month? Well, Credit Donkey estimates that an average person spends $161 per month on clothes with women spending 76% more than men per year. 

Technology plays a major role in how both American men money spending habits and women’s choice of fashion is determined.  And this is why it’s important to understand the significance of the tools that assist online shoppers. 


Chatbots Continue to be Important for Online Shoppers

Throughout 2018-19, 60% of customers used chatbots to have their queries answered. Interestingly, Millennials prefer chatbots to other methods of customer support. 

Speed and efficiency of chatbots are said to the main reasons behind their rise. Whilst speaking to speak to service agents, it hardly takes about 10 minutes before the patience of the customers wears out. In stark contrast, a chatbot is able to reply within a few seconds meaning that customers don’t have to wait for information.


Voice assistants are also playing an important role in online retail. 20% of searches on Google are made via voice assistants. This year, its estimated voice searches will soar to 50%.

Conclusion

One can take away many important insights by analyzing the money spent on clothes.  The apparel industry is clearly being powered by online retail but there’re many social factors at play as well. Age, gender and cultural events have a say in how much people spend on their wardrobe. By analyzing how Americans spend on clothing–retailers can look for ways to precisely target their potential customers.  

Published On: February 14, 2020








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