Agosh Baranwal | May 18, 2021 12:00:00 AM |

Fashion e-commerce industry in 2021 - trends and strategy

Not until recently, fashion was considered a saturated industry with high competition for small businesses while low-profit margins for big ones. But these myths feel long lost as the continued growth in this industry has broken records in the past couple of years. Today, statistics and sentiments appropriately place fashion among the top few eCommerce niches. One can rightly say that this sector has fully embraced e-commerce even more so than other industries.

Low investment e-commerce ideas-2

Let’s start with some numbers to get up to speed with global fashion e-commerce trends. This industry was expected to decline from $531.25 billion in 2019 to $485.62 billion in 2020 largely due to the ongoing pandemic. However, the market is set to recover and hit $672.71 billion by 2023.

As indicated by some of these boring yet magnificent statistics from Statista, this growth in fashion e-commerce is here to stay for good. And it’s not very difficult for you to stay competitive in this saturated online clothing industry. We have prepared a guide to 2021 fashion eCommerce trends and how to set your business strategy accordingly.

The 2020 Throwback

Due to the ongoing pandemic, retailers faced an unprecedented number of challenges in 2020 considering the sudden shifting of consumer behaviours and logistical hurdles. Brands were forced to be quick on their feet rethink their marketing, distribution, and sales strategies.

With physical stores closed, eCommerce exploded but this made it even more difficult for brands to grab attention. To stand out from the crowd, 78% of direct-to-consumer (D2C) brands increased their marketing budget in May 2020. Marketers had to find new ways to attract and connect with customers, whether by hosting community events on Zoom or creating TikTok challenges or bombarding other social media platforms with lucrative ads.

The fashion industry — which encompasses everything from footwear to jewellery — was not spared. During the first wave of COVID-19 shutdowns last year, consumer spending declined manifold. However, although a McKinsey study found that over 60 per cent of consumers reduced their fashion spend, e-commerce fashion brands who used the right mix of digital advertising and proper organic targeting scored big. In just eight months, e-commerce’s share of fashion sales nearly doubled from 16 to 29% of total global revenue.

So, it’s 2021 now and you must be wondering how do you still stay relevant with the new trends that have been accepted as a norm by the fashion industry during the crisis we faced. Let’s lookout for some trends that can dominate this year - some are based on sustainable marketing strategies that work, and it’s well worth the effort to make the most of their popularity. Others aren’t merely trends, but new approaches that will endure.

1. Chatbots


The fashion industry was among the first to recognize the importance of chatbots in their online commerce. Sometimes termed as a spin-off from AI, Chatbots are used by businesses to perform multiple customer service tasks. From the fashion eCommerce perspective, brands use chatbots to direct customers towards relevant deals and products and help them identify products they might want or need – all aimed to drive sales and revenue.

Facebook Messenger, for instance, is being increasingly used by the fashion eCommerce industry to exchange Facebook messages with their current and prospective customers. Some of the top fashion retail brands like H&M uses bots that allow shoppers to customize and buy their outfits.

2. Personalization enhances the Online Store Experience

Given that the true essence of fashion lies in self-expression, it makes sense that modern fashion consumers actively seek personalized experiences. This goes well beyond the typical personalization techniques that have become status quo by today’s standards. Things like including the customer’s name in your emails or delivering product recommendations based on their purchase history are table stakes.

There are many personalization tools such as Nosto that take this concept a step further by delivering dynamic onsite content to users based on their engagement history. This goes for product recommendations, page copy, and more.

3. Omnichannel Fashion Ecommerce


If the past few years have taught us anything, the omnichannel customer is here to stay. As opposed to multichannel marketing, omnichannel marketing places your customer at the heart of your marketing strategy and personalizes their experience. It’s the perfect answer for fashion eCommerce merchants aiming to stay relevant.

Omnichannel marketing allows you to gather data from your customers to create an individualized experience pertinent to their customer journey stage. No matter their demographics, how they interact with your campaigns, the way they shop, or their favourite products, omnichannel lets you respond with the perfect message that will resonate best.

Luxury brand Net-a-Porter is one of the best fashion eCommerce sites using an omnichannel strategy. This online fashion retail brand created an application allowing customers to browse products, gather inspiration and share products they love. The company effectively launched its native ecosystem of Net-a-Porter enthusiasts immersed in a cohesive e-commerce fashion experience from beginning to end.

4. Vertical Growth: Accessories, Apparel, Shoes, Luxury & Eyewear


Aggregate data can be a tricky thing. Especially during a global pandemic. But against the +9% year-on-year change, Statista shows slight declines in 2020 versus 2019. Also, we can see marked disparities, with luxury products and accessories (i.e., watches, jewellery, luggage, and bags). Here are some numbers from Statista.

Accessories: -12.69%
Luxury: -11.11%
Footwear: -5.54%
Eyewear: -4.9%
Apparel: -2.88%

The good news is that compounded annual growth rates over the next five years are up and to the right for fashion at large as well as every subcategory. In other words, no matter what source you turn to the result is the same: The fashion industry’s losses will rebound in 2021. Thus, the above-mentioned portions of fashion can see vertical growth.

5. Many Companies Are Attempting to Incorporate AI


Numerous fashion retailers have already invested in AI over the past 12 months and other big names are following suit. E-commerce giant Alibaba, which is already heavily involved in fashion retail, invested $15bn in R&D labs in a push to become the AI leader.

The ever-increasing scale and granularity of personalization in online fashion retail are impossible to manage without the assistance of AI and related automated processes. Gartner predicts that by 2021, customers will manage 85% of their relationships with an enterprise without interacting with a human.

AI development teams are coming up with new solutions to test across multiple online retailers, proving their feasibility beyond a pure hypothesis or single-use.

By developing and perfecting new algorithms, companies are now focusing on empowering their clients to leverage their collective know-how and become highly competitive in their respective markets. Now you as a fashion business owner don’t need to be intimidated by any of these new technologies. Just contact your eCommerce service provider to fill you in with any new features that they can or are planning to provide you with.

Hope this comprehensive guide will help you in 2021 and beyond. Feel free to contact us for any queries or doubts.

Read more:

Headings: Tips, Marketing