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NPD: Online, smaller metro markets driving apparel sales


New York -- New York and Los Angeles may be the largest U.S. markets in terms of apparel sales, but online and smaller markets such as Orlando, Florida, and Washington, D.C., are the top markets driving both growth rate and dollar volume increases for the industry, according to global information company The NPD Group.

Both Orlando and Washington had strong performance across in-store and online channels.

“The big regions are no longer leading apparel industry sales growth,” said Marshal Cohen, chief industry analyst, NPD. “When New York and Los Angeles don’t even make it into the top 10 list of DMAs driving apparel growth, we have a big opportunity gap in the market. We need to understand the cause in order for the apparel industry to regain traction moving forward.”

Among the top 25 designated U.S. market areas (DMA), online dollar sales of apparel increased for most, but only a handful grew in-store sales in the 12 months ending February 2015. Total apparel industry dollar sales grew 2% in the 12 months ending February 2015, but sales of apparel purchased in a store declined 2%.

The downward trend of in-store sales was true for most of the top 10 U.S. markets. Washington, D.C., is the only one with notable in-store sales growth (+14%).

Online apparel sales, which now accounts for 17% of industry dollars, increased 19% in the 12 months ending February 2015. When looking at the top U.S. markets (New York, Los Angeles, Chicago, Philadelphia, Dallas-Ft. Worth) each grew online sales by double digits. However, the biggest growth is, yet again, coming from smaller markets.

In most cases, the DMAs that are outperforming the industry as a whole are also the ones with more dramatic in-store sales growth than online sales gains. Online shopping delivers great convenience to the consumer, but it cannot yet deliver the level of impulse purchasing that in-store shopping can. Impulse purchases of apparel occur for 32% of in-store sales, while online only generates impulsive purchases 22% of the time.

“Impulse purchases are the big growth driver, so the strategy of driving traffic to websites needs to exist in tandem with efforts to drive traffic to the stores,” added Cohen. “Regardless of regional market size, or method of purchase, the apparel industry needs to engage consumers with something new and different – something they can’t find everywhere.”

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