IBM Says These Apparel Categories Set For Biggest Growth Gains in 2019
By Jessica Binns
IBM fellow and chief scientist Dr. Mike Haydock, who tabulated the company’s official retail forecast that calls for 3.04 percent retail growth across all categories, said the “other” apparel category comprised of items including coats, vests, raincoats, scarves and purses is set to see the largest gains at 5.81 percent.
“It’s easy to see why this category is a standout,” Dr. Haydock told Sourcing Journal, adding that casual vests check both the “practical” and “stylish” boxes while “layering for winter is very popular now.”
Weather deserves some credit for influencing sales trends, he noted. Winter, already a month underway, is projected to bring frigid temperatures, compelling many shoppers to upgrade synthetic gloves with styles made from warmer and more durable leather. Plus, Dr. Haydock continued, “people want the right fit so they’re going to a retail store for the service.”
An early spring season could also buoy clothing sales, according to IBM.
IBM data shows men’s fashion, another highlight, gaining 3.23 percent in the coming year. “Women may be buying more online, while men may prefer the personalized service of brick-and-mortar retail stores,” Dr. Haydock explained. “With the unemployment rate so low, more men are working and dressing for work—trying to be casual, yet sharp.” He points to Walmart’s success with Bonobos, the men’s wear staples startup, as one example of success in the category.
Retailers searching for growth strategies might be tempted to consider expanding into men’s wear but Dr. Haydock cautioned against taking a scattershot approach to new assortments. “As for entering the men’s category, there is real value in ‘sticking to your knitting’ and not straying too far from the brand,” he said. “But if a retailer has the product, brand recognition, commitment and resources to try it, why not? The brand would have to be one that is not 100 percent feminine, but can carry over to men’s clothes.
“The time to try is now,” he added.
Consumer love of convenience and choice will propel online shopping to outsize growth of 11.62 percent, according to Dr. Haydock’s forecast, which incorporates neural networks and deep learning systems and draws from 27 years of U.S. Census Bureau retail sales data on top of unemployment rates, personal disposable income and U.S. Treasury yield curves.
IBM said that the growth seen ahead for online and offline shopping signals not only that e-commerce investments are bearing fruit but also that retailers are figuring out how to attract shoppers into bricks and mortar via exclusive, differentiated assortments and engaging store layouts.
IBM’s forecast calls for nearly equal growth among sales of clothing for kids, expected to climb 2.66 percent, and for women, projected to tick upward 2.65 percent. However, the headwinds and tailwinds at play could upend the outlook altogether. Negatives like rising interest rates and slow-moving new home sales could dampen projections, though a strong economy, affordable prices at the gas pump and a tight job market are among the factors in retail’s favor. To manage these variables, IBM said retailers might boost their promotional activity and undertake similar efforts to improve sell-through on products marked by historically sluggish sales velocity.
“I think 2019 will be a good year for retailers—but keep in mind, we are coming off a terrific year, one of the best in a long time,” Dr. Haydock said, adding that despite an encouraging holiday season, “the stock market signals caution.”
“Most people don’t have enough skin in the game to be affected much by market moves, but if the trend continues into next year, we could see consumer savings rise,” he added.
With growing paychecks and bank accounts, many consumers want to put their hard-earned dollars toward well-made products when expanding their wardrobes, and Dr. Haydock encouraged apparel companies to “source quality first.”
“People have a lot of disposable income—and they are spending it,” he said.