As luxury spending declines, fast fashion becomes more popular in the US, according to new research from Consumer Edge, a global provider of consumer transaction data. After rising by 15% in 2022, the direct-to-consumer luxury sector saw a 7% decrease in 2023, in contrast to the 2% growth in US fast fashion spending.
Value-priced SHEIN, a Singaporean company, outperforms rivals in the US fast-fashion market, holding a commanding 40% of the market. Due to SHEIN’s sharp increase, H&M saw a 2% decline in its US spending share during that time.
Another winner in the fast-fashion industry, Uniqlo, saw a 28% increase in sales in 2023 and has plans to open more than 20 new locations in the US and Canada by 2024. Major luxury brands, such as Burberry, Gucci, and Louis Vuitton, saw a decline in spend growth in the first ten months of 2023; Hermes, on the other hand, stood out with a 15% increase.
Michael Gunther, vice president of Consumer Edge, said: “A squeeze on real incomes is probably the cause of the bifurcated performance, with more affordable fast fashion increasing and luxury brands decreasing.” This dynamic makes sense in the luxury market, where goods are typically more expensive.
According to the report, American consumers under 35 are becoming less interested in fast fashion and luxury goods. Lower discretionary incomes may be the cause of this shift, making it difficult to withstand macroeconomic pressures.
Consumer Edge draws attention to the possible barrier to sustainability becoming a priority in the US by drawing comparisons with the policies of France and Italy, wherein worn-out apparel and footwear are repaired by the government.