FA S H I O N R E P O R TOnline Chal lenges & Tactics for Retai lers and Brands

US VERSION · 2019

THE US FASHION REPORT | 2

INTRODUCTION

2019 is showing more promise for brick-and-mortar retail.

Markets are trending up and several national chains are

actually opening new stores, like TJ Maxx and Ross Stores.

Accelerated growth in online shopping has always been

something retailers and brands lean on. Now that social

media is making fashion influences even more pervasive, the

industry is being challenged to innovate quickly.

But online fashion has slowed down and actually dipped

for the first time in Q1 2019. Is ecommerce plateauing for

fashion?

In this report, Hitwise breaks down changes in online fashion.

We detail:

• Top fashion players and risers winning online

• Key challenges faced in 2018

• Recommendations and tactics to overcome these

challenges

2016/17

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2017/18 2018/19

700

600

500

400

300

US FASHION INDUSTRY

Total Online Visits (‘millions)

Like 2017, Nov had more visits than Dec but growth is flattening

Fashion saw slower growth over the start of 2019

PART ONE

THE PAST QUARTER

ONLINE PERFORMANCE BY FASHION TIERS

PART TWO

RECOMMENDATIONS

DIGITAL TACTICS FORRETAILERS AND BRANDS

PART THREE

SUMMARY

KEY TAKEAWAYS

WHAT’S INSIDE

Hitwise is a global digital intelligence provider that helps brands

and agencies, like Walmart, Goldman Sachs, Condé Nast, and Group

M, segment and reach online audiences.

Powered by leading data transformation and modeling

technologies, Hitwise data is audience-first, actionable, globally-

compliant, and unmatched in terms of granularity. This allows us

to provide a complete understanding into how consumers behave

online - from initial search to final purchase, at any moment in time,

across any device.

MeasureCompetitiveBenchmarking

OptimizeSearch & ChannelOptimization

DiscoverConsumerInsights

LiftCampaignPerformance

PART ONE

THE PAST YEAR

ONLINE PERFORMANCE BY FASHION TIERS

THE US FASHION REPORT | 5

FASHION IS SLOWING DOWN ONLINE IN 2019

Each fashion tier (Fast Fashion, Mid and Premium) has decelerated online visit growth at the start of 2019.

The Fast Fashion Tier: Fast Fashion dipped slightly

below mid-tier retailers during the 2018 holiday season,

but is coming back on top in March 2019. However,

declining traffic from the majority of players in the

space led to negative visit growth during Q1 2019.

The Mid Tier: The Mid tier has followed a similar pattern

to Fast Fashion, but has maintained more positive,

albeit slow, growth. A colder winter caused activewear

brands in this category to maintain a steady rate of

visits year on year.

The Premium & Luxury Tier: This tier started the year

off right with an 8% increase in visits year on year in

January. Peaks in August and November indicate a

seasonal shift for the premium tier.

MONTHLY ONLINE VISITS (‘MILLIONS)

Fast Fashion MidPremium

Jan-

18Fe

b-18

Mar

-18A

pr-18

May

-18Ju

n-18

Jul-1

8A

ug-18

Sep-

18O

ct-18

Nov

-18D

ec-18

Jan-

19Fe

b-19

Mar

-19

300

200

100

0

MONTHLY GROWTH YoY

Fast Fashion MidPremium

Jan-

18Fe

b-18

Mar

-18A

pr-18

May

-18Ju

n-18

Jul-1

8A

ug-18

Sep-

18O

ct-18

Nov

-18D

ec-18

Jan-

19Fe

b-19

Mar

-19

35%

30%

20%

10%

0%

-10%

THE US FASHION REPORT | 6

LUXURY BRANDS SOARED DURING Q1 2019

The first quarter of 2019 saw top luxury houses reach impressive online growth.

This included traditional heritage houses like Lacoste and

Burberry, and e-tailers like Farfetch and Moda Operandi.

How did Lacoste grow 37% year over year?

The iconic brand brought on a new creative director

in October that has already made a big impact, like

launching the new collection with a runway show during

Paris Fashion Week.

Collaborating with the Keith Haring Foundation and

signing on US & Australian Open champion Novak

Djokovic as a brand ambassador has helped move the

brand’s image beyond its classic polo tee.

Luxury retailers like Farfetch and Moda Operandi also

experienced growth during Q1, which aligns well with the

launch of Spring/Summer fashion collections.

LUXURY TIER – FASTEST RISERS IN Q1 2019

Luxury brands, particularly Lacoste, saw impressive growth at the start of 2019.

FarFetch’s online success led to an IPO in Q3 2018 and it continues to grow.

Visits to Luxury Brands YoY

Visits to Luxury Retailers YoY

Lacoste

Burberry

Louis Vuitton

Chanel

Tommy

Far Fetch

Moda Operandi

ShopBop

Yoox

The Outnet 13.1%

16.6%

13.1%

20.6%

14.4%

21.9%

26.0%

27.3%

43.6%

36.6%

THE US FASHION REPORT | 7

Fast Fashion brands continue to grow even as they become more engrained in mainstream fashion.

Now that fast fashion brands like Shein, Rotita, and

BooHoo have been in the US for over a year, their growing

success shows that they have become leaders in this

space.

Shein has really leveraged Google Shopping and made

a big push to advertise on key social channels to make

their presence pervasive online. Fashion Nova is able to

take popular outfits from social media and turn them

into product within a week. A streamlined process and

targeted social media strategy have enabled these brands

to find great success online.

Meanwhile, activewear companies benefitted from a

particularly cold winter in the states. The polar vortex this

season contributed to year on year Q1 growth for brands

like Columbia and retailers like Moosejaw.

FAST FASHION & ACTIVEWEAR FAST RISERS Q1 2019

Visits to Fast Fashion YoY

Visits to Activewear YoY

Activewear brands are growing in Q1 due to colder weather this season.

Scheels

Moosejaw

Columbia Sportswear

Lululemon

Backcountry 18.3%

23.1%

27.8%

33.7%

37.4%

Overseas e-tailers have continued to grow their presence in the US.

Shein - International

Liligal

Fashion Nova

BooHoo

Rotita 34.4%

39.5%

43.3%

47.5%

102.2%

FAST FASHION & ACTIVEWEAR SEE POSITIVE GROWTH

THE US FASHION REPORT | 8

But it’s not all good news for fashion brands online. A number global labels have had lackluster results over the first quarter of the year.

A year ago, dozens of international fast fashion sites were

launching in the US, but it appears that some of the craze has

settled.

While some fast fashion brands continued to grow, others fell

flat at the start of 2019. Modlily, Rose Warehouse and Dresslily

were all on the rise but have quickly fallen behind.

Aside from pure-plays, fast fashion brick-and-mortar players

have also suffered. Mall staples like Charlotte Russe, rue21 and

Bebe are declining online. As these brands continue to become

impacted by store closures, it’s evident that ecommerce is not

providing the lift required to remain relevant in today’s market.

What does this quarter’s data tell us?

Some brands are continuing to innovate and it’s translating to

acceleration online, but many players are quickly falling behind.

In the next chapter, we address tactics to combat these

challenges.

SELECTED GLOBAL BRANDSQ1 2019 YoY

Modlily

Rose Wholesale

Dresslily

Charlotte Russe

Romwe

rue21

Rosegal

Bebe

dressbarn

Lilly Pulitzer

Rue La La

Victoria’s Secret

Forever 21

Destination XL

GAP

-49.6%

-49.1%

-46.7%

-44.1%

-41.9%

-35.7%

-34.8%

-34.4%

-33.4%

-32.6%

-27.4%

-20.9%

-19.0%

-17.6%

-15.7%Even as brands close doors, their online activity is not offsetting challenges.

A NUMBER OF GLOBAL BRANDS HAVE STRUGGLED

PART TWO

RECOMMENDATIONS

DIGITAL TACTICS FOR RETAILERS AND BRANDS

THE US FASHION REPORT | 10

TOP SEARCHES FOR “AMAZON COAT”

OROLAY PURCHASES ON AMAZON

As a fashion brand or competing retailer, track Amazon’s movements.

Identify the brands that are driving growth in the fashion

category by analyzing purchase and search trends. The recent

craze over ”the Amazon coat” by Orolay is a great example of

how an unknown brand can become a category leader.

Although the coat emerged online in Winter 2018, Orolay’s

Thickened Down Jacket quickly became an internet sensation

during the 2019 season.

Searches with the term “amazon coat” included keywords like

“lab coat” in January 2018. But by January 2019, 15% of these

searches included the keyword “orolay.”

The number of purchases for Orolay grew 8.5x in January

year on year.

Armed with these insights, a competitor retailer could

then push equivalent products and labels on their own site.

Identifying these product trends, a manufacturer brand could

also strengthen their like-for-like products listed on Amazon.

January 2019orolay amazon coat

amazon orolay coat

lab coat amazon

amazon brown teddy coat

amazon coat

Share4.01%

3.34%

2.87%

2.70%

1.98%

January 2018white lab coat amazon

amazon north face coat

amazon lab coat

trench coat amazon

boyd harris tween coat amazon

Share8.40%

6.53%

4.95%

4.93%

4.69%

Jan-

18Fe

b-18

Mar

-18A

pr-18

May

-18Ju

n-18

Jul-1

8A

ug-18

Sep-

18O

ct-18

Nov

-18D

ec-18

Dec

-17

Jan-

19

10,0009,0008,0007,0006,0005,0004,0003,0002,0001,000

0

1. IDENTIFY TOP RISING BRANDS AND PRODUCTS

THE US FASHION REPORT | 11

2. FIND THE RIGHT MIX OF DIRECT AND INDIRECT BUYERS

To compete and reach a broader audience, many brands need to sell indirectly through retailers and marketplaces.

Adidas is one such brand. Since they distribute through several partners, Adidas would want to know if their products are converting on

retailers or if they are cannibalizing their own direct sales.

From October to December 2018, 592K people bought directly from the US Adidas site. A further 45K bought Adidas products on Foot

Locker, and another 43K purchased on Nordstrom. But looking at their indirect buyers, 59% of Foot Locker-Adidas buyers and 36% of

Nordstrom-Adidas buyers also visited Adidas’ site. To rectify this, Adidas could analyze the differences between who the direct and indirect

buyers are and when they buy to create strategies that will engage each group.

VISITORS VS ADIDAS BUYERSDirect (on Adidas) and indirect (on Foot Locker & Nordstrom)

59% of Foot Locker-Adidas

buyers also visited Adidas’ site36% of Nordstrom-Adidas

buyers also visited Adidas’ site

Adidas Visitor

5.1M

AdidasDirect Buyer

592K(12%)

Nordstrom Visitor

12.2M

NordstromAdidas Buyer

43K(0.4%)

Foot Locker Visitor

3.2M

Foot LockerAdidas Buyer

45K(1.4%)

THE US FASHION REPORT | 12

3. UNDERSTAND WHERE ELSE YOUR CUSTOMERS GO

Finally, to protect your audience share, identify where else your customers go to and why.

This is detailed in the following example for Louis Vuitton.

During Q1 2019, Louis Vuitton had a 9% visitor overlap

with Burberry, although this dropped by 1% YoY. Louis

Vuitton had more significant visitor overlap at 15% with

Chanel and this grew 12% YoY.

Through search analysis by segment, we can identify why

Louis Vuitton’s overlap audience is going to competitor

sites. The overlap audience is searching for scarves,

wallets and trench coats from Burberry, and visiting

Chanel for sneakers, earrings and boy bags.

A quick tactic would involve re-targeting customers with

selected product offers on their scarves or sneakers, or

upping their PPC on these specific terms. Louis Vuitton

could also feature these items on product suggestions or

check out pages onsite, to upsell existing customers.

LOUIS VUITTON’S COMPETITOR OVERLAPQ1 2019 YoY

Louis Vuitton’s overlap audience is going to Burberry

for:

“classic trench coat”“scarf” “wallet”

Overlap dropped by

-1% YoY

9%

Louis Vuitton’s overlap audience is going to

Chanel for:

“sneakers”“earrings” “boy bag”

15%

Overlap grew by

+12% YoY

Burberry

Louis Vuitton

Louis Vuitton

Chanel

SUMMARY

PART THREE

THE US FASHION REPORT | 14

A number of challenges are top of mind for fashion retailers and brands at the start of 2019.

These include:

• Amazon’s Opportunities: Emerging brands can quickly

become category leaders on Amazon. Page views and

purchases are growing for international brands like Ororlay.

• Site Traffic Plateau: For many fast fashion retailers, online

activity is not giving them the lift required to offset losses

from declining in-store sales.

• Loyalty in Question: And as online grows, customers are

shopping around on multiple sites, making “exclusive” customers

a rarity.

But certain brands like Lacoste and Shein are finding success online.

The key lies in understanding your customers – where else do

they go online, what are their brand and product interests, and

what proportion are searching for discounts – and devising digital

tactics to acquire and grow them.

Ready to reach and engage your

fashionistas? can help uncover digital insights about your strategic audiences.

CONTACT US HERE

APPENDIX

Chapter 1

Page 2: Hitwise. Fashion Industry = Custom industry of top 150 Fast

Fashion, Mid and Premium Tier Fashion Brands and Retailers.

Page 5: Hitwise. Fashion Industry Monthly Online Visits and YoY

Growth in Q1 2019.

Page 6: Hitwise. Fashion Industry Top Growing Premium Tier Brands

based on Q1 YoY Growth.

Page 7: Hitwise. Fashion Industry Top Growing Fast Fashion &

Activewear Brands based on Q1 YoY Growth.

Page 8: Hitwise. Fashion Industry Most Declining Fast Fashion Tier

Brands based on Q1 YoY Growth.

Chapter 2

Page 10: Hitwise, Retailer Analytics – brands and products in

Amazon’s Clothing, Shoes & Jewelry category.

Page 11: Hitwise, US. Audience = visitors/buyers to Adidas’ site,

visitors/Adidas buyers on Foot Locker, visitors/Adidas buyers on

Nordstrom. Period = 12 weeks ending December 29, 2018.

Page 12: Hitwise. Visitors of Louis Vuitton and/or Burberry and Chaneland search terms of overlap audience to Burberry or Chanel.

Period = Q1 2019.

Ready to reach and engage your

fashionistas? can help uncover digital insights about your strategic audiences.

CONTACT US HERE