Fast fashion gains popularity in the US as luxury spending faces a downturn, according to recent insights from Consumer Edge, a global consumer transaction data provider. In contrast to the 2 per cent growth in US fast fashion spending, the direct-to-consumer luxury sector experienced a 7 per cent decline in 2023, following a 15 per cent rise in 2022.
SHEIN, a Singapore-based value-priced brand, dominates the US fast-fashion scene with a substantial 40 per cent market share, outperforming competitors. In the same period, H&M witnessed a 2 per cent drop in US spending share due to SHEIN’s rapid rise.
Uniqlo, another fast-fashion winner, recorded a 28 per cent increase in 2023 and plans to open over 20 new stores in the US and Canada in 2024. On the luxury front, major brands like Louis Vuitton, Gucci, and Burberry faced declines in spend growth, while Hermes stood out with a 15 per cent increase in the first ten months of 2023.
Consumer Edge’s VP Michael Gunther stated “The bifurcated performance, with more affordable fast fashion increasing while luxury brands decrease, is likely because of a squeeze on real incomes. This dynamic logically plays out in the luxury sector where products tend to have a higher price tag.”
The report also reveals a decline in US shoppers under 35 for both fast fashion and luxury items. This shift may result from lower discretionary incomes, presenting a challenge to weather macroeconomic pressures.
Consumer Edge highlights the potential obstacle of sustainability becoming a focal point in the US, comparing it to trends in France and Italy, where governments support repairing worn-out clothing and footwear.
