Fashion Trade NOW: Growth in fashion trade is slow, but supermarket fashion is strengthening
Last year, Finns spent approximately EUR 5.2 billion on clothing. According to the Finnish Commerce Federation’s forecast, the fixed-price consumption of clothing and footwear will grow at an annual rate of less than one per cent this year and next year, and consumption will not yet return to the level before the pandemic. Even though growth is slow, e-commerce and circular trade are changing the structure of fashion trade. At the same time, however, domestic supermarkets are able to respond to foreign competition.
The development of the fashion consumer market in Finland is slowed down by the slow growth of purchasing power, international price competition – particularly driven by ultra-fast and cheap fashion – as well as the ageing of the population and the growth of the second-hand fashion market.
According to a study by the Finnish Commerce Federation*, fashion trade customers have started using more channels than before: eight years ago, 40 per cent of them bought clothes online, while 69 per cent of them do so now. At the same time, the position of physical stores has also strengthened. In 2018, 88 per cent of those who bought clothes visited physical stores, and the share has increased to 94 per cent.
”Online purchases of clothes have become more common in recent years, especially among men,” says Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.
Prisma has maintained its position as the most popular fashion store
The position of supermarkets in Finland’s fashion trade strengthens the position of the physical purchasing channel. Prisma is the physical fashion store that is the most used by Finns, and Tokmanni and K-Citymarket are also in the top three. Over the past eight years, domestic supermarkets have been able to strengthen their positions in relation to international fashion and sportswear chains.
”The popularity of supermarket fashion is also increased by the fact that Finns primarily want their clothes to be comfortable and practical, clearly more than Swedes or Germans, for example,” says Kurjenoja.
Prisma’s position in fashion trade is strengthened by the growing popularity of prisma.fi, as prisma.fi is already the third most used online fashion store.
”The successful combination of a physical store and an online store makes everyday life easier for customers and supports both channels,” says Kurjenoja.
Zalando dominates e-commerce – Temu has become a favourite among older men
Zalando has maintained its position as the online fashion store that is the most used by Finns and strengthened its popularity over the past couple of years. However, the online fashion store that is the most used by men over the age of 55 was not Zalando, but Temu. In the corresponding age group of women, Temu is the fourth most popular.
”Temu’s user base clearly consists of mostly older age groups. People under the age of 35 use it fairly little when buying clothes,” says Kurjenoja.
At the same time, the second-hand fashion market continues to grow. Vinted has become the second most used online store for buying clothes and shoes after Zalando, and especially women under 55 shop there.
Men’s clothing returns have increased rapidly
Men’s increased online purchases of fashion are also reflected in clothing returns. Two years ago, women returned online purchases of clothes more often than men. Now, men under the age of 30 return clothes the most actively: up to half of them have returned online purchases of clothes during the past year. Men under the age of 45 have also started to make returns more frequently.
The most common reason for returns is the wrong size or cut. At the same time, however, checking the size guide before making an online purchase has become less common over a couple of years. 59 per cent of those returning clothes due to incorrect sizes did not check the online store’s size guide before making a purchase.
Men’s brand awareness has increased
The study also revealed an unpleasant phenomenon: ordering clothing for only one or two uses and returning them after use. The phenomenon is most noticeable among men under the age of 45, 14 per cent of whom report doing so. Two years ago, the share was only 7 per cent.
”The phenomenon is still relatively small, but it is growing rapidly. The increasing popularity of this behaviour is most likely supported by the strengthened role of social media in the customer journey, while men’s interest in brands has increased,” says Kurjenoja.
According to the study, Finnish men’s interest in brands and premium fashion has strengthened, although the difference between Finnish and Swedish men’s brand and premium fashion awareness is still large. Women are more focused on low prices when shopping for fashion than men, while men are more focused on brands and premium fashion.
*The Finnish Commerce Federation has investigated the fashion consumer market since 2018. In addition to different statistical sources, three separate consumer surveys have been used in the Fashion Trade NOW study: An international comparison collected by Statista, in which the Finnish sample comprises more than 7,000 continental Finns; a survey implemented by Kantar Finland and designed by the Finnish Commerce Federation, the sample of which consists of 4,014 continental Finns; and a survey designed and implemented by the Finnish Commerce Federation targeted at students, the sample of which consists of 664 students under the age of 30. Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation, is responsible for designing the research and analysing the results.
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For further information, please contact:
Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, jaana.kurjenoja(at)kauppa.fi