As disposable incomes fell, consumers increasingly looked to sample-sale websites
Los Angeles, CA (PRWEB) April 20, 2012
Since its emergence in the mid-2000s, the Online Fashion Sample Sales industry has experienced nothing but growth. Catering to a bargain-seeking customer base, the industry has experienced average revenue growth of 49.6% per year during the five years to 2012. As personal disposable incomes declined during the recession for the first time in decades, “Americans turned to discounted apparel and accessories to scratch the shopping itch,” says IBISWorld industry analyst Nikoleta Panteva. She expects this momentum to continue through 2012, with industry revenue growing an anticipated 26.3% to $2.2 billion. Profit has followed a similar path, growing from 16.7% of revenue in 2007 to 21.7% in 2012.
The Online Fashion Sample Sales industry's attractive opportunities have enticed a number of new entrants. Over the five years to 2012, the number of sample-sale websites is estimated to grow at an average annual rate of 40.9% to 89. While this factor has helped push up total industry revenue, it has also posed a competitive threat to individual players. More companies are fighting for the consumer's flash-sale dollar. “In order to compete successfully in this industry,” says Panteva, “players must secure the brands and products that are in high demand and sell them at discounts that are sometimes as high as 80.0% off the retail price.” This strategy has become increasingly difficult, though, as economic conditions improve and brands have less excess inventory that they are willing to sell at such steep discounts. In addition, increased competition has meant that more fashion sample-sale websites are actively looking for supply of brand-name products, which has further dried up the supply of inventory. One of the first major online flash-sale ventures, Gilt Groupe (Gilt.com), was launched in 2007 and its success has since spurred hundreds of other competitors to enter the flash-sale market, from start-ups like Rue La La and Beyond the Rack to players like Amazon's MyHabit and Nordstrom's Haute Look. This increased competition has limited the pace of growth for major industry players.
The Online Fashion Sample Sales industry is poised for continued growth over the five years to 2017. With per capita disposable income returning to solid growth, shoppers will be more likely to buy larger volumes and make higher-value purchases. Still, competitive threats from a saturated industry and from other online retailers will keep growth subdued. To remain competitive and top of mind to customers, industry operators are likely to enhance their services, dabbling in personalized product selections and exclusive designer collaborations. For more information, visit IBISWorld’s Online Fashion Sample Sales in the US industry report page.
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IBISWorld industry Report Key Topics
This industry offers flash sales (extremely limited-time discounts) on designer apparel, accessories and shoes; high-end makeup and precious jewelry. These websites are often members-only since they offer deep discounts that are not typically found in other outlets.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.