Retailers, especially fast fashion companies, must prepare for consumers seeking fewer, higher-quality goods, writes Managing Director Deborah Weinswig
For some, downsizing and organizing belongings is a matter of choice, the report observes. For others, the process is a necessary response to rising housing prices that are forcing people to live in smaller homes. Others are focusing on sustainability and the ethical standards of manufacturers, writes Deborah Weinswig, Managing Director of Fung Global Retail & Technology. Retailers, especially those in fast fashion that have thrived on consumers buying a larger quantity of lower-priced items, will have to adapt to changing consumers’ needs and values.
“Consumers’ future priorities will be ethics, a concept of ‘disownership’ and sustainability,” Weinswig writes. “Retailers … should align their product and service offerings more closely within the values of their target customers.”
Though the idea of living with fewer possessions has been around for centuries, the term “declutter” was born in the 1970s and the concept has continued to gain popularity, Weinswig writes. Decluttering resonates particularly strongly with urban dwellers, who struggle to fit belongings into small apartments. Fung Global Retail & Technology’s analysis of housing pressure in the U.S. and Europe (especially in the Netherlands) reveals a strong correlation between housing prices and Internet searches regarding decluttering.
The trend should be long-lasting, as millennials, now the largest generation in history, are more consciously frugal in terms of living arrangements, product consumption and travel expenses. The growth of the “sharing economy,” too, among U.S. adults has resulted in the growth of platforms such as Uber and Lyft in transportation, and Etsy, eBay and Craigslist in retail, further minimizing consumer ownership.
This will have long-term results for more traditional retailers and brands, especially in clothing. Helped by the rise of fast fashion, apparel consumption had skyrocketed over previous decades. The average woman owned 120 items of clothing in 2015, up from 36 items in 1930, according to Cladwell, a company that helps users create their own capsule wardrobe. However, this trend may be reversing due to several factors. A growing focus on ethical consumption has created consumer concern about hiring practices (sometimes involving children) at fast-fashion manufacturers. Online retailers including Zady, Cuyana and Everlane all emphasize durable, ethical garments.
Some retailers are responding to the evolving preferences of their shoppers. Patagonia’s Common Threads initiative provides a framework for responsible consumption based on five precepts: reduce, repair, reuse, recycle and reimagine. Muji offers waste-reducing packaging, minimalist housewares and eco-friendly products. Other brands espousing minimalism include Scandinavia’s Bang & Olufsen and Cos, the U.S.’s Calvin Klein and Japan’s Uniqlo.
“Decluttering is a long-term trend that is here to stay,” Weinswig writes. “Retailers can capitalize on this opportunity by responding to the evolving preferences of the consumers they sell to, and seeking ways to influence consumer behavior.”
The full report can be found here. Previous reports issued by Fung Global Retail & Technology include “US Furniture Market 2016: Preferences and Trends” and “Deep Dive: The Changing Retail Landscape & the Evolving Opportunity for Better Demand Planning.” Fung Global Retail & Technology’s reports and analyses can be found at www.FungGlobalRetailTech.com and www.deborahweinswig.com. Subscribe here to Deborah Weinswig’s daily news and analysis on retail, fashion and technology.
About Fung Global Retail & Technology
Fung Global Retail & Technology is a think tank whose research team, based in New York, London and Hong Kong, follows emerging retail and tech trends, specializing in the ways retail and technology intersect, and in building collaborative communities.
The team, led by Deborah Weinswig, former top Wall Street and retail tech analyst and startup advisor, publishes ongoing thematic and global market research on topics such as the Internet of Things, digital payments, omni-channel retail, luxury and fashion trends and disruptive technologies.
More information can be found at www.FungGlobalRetailTech.com.