A 2 percent bump in U.S. apparel sales over the past year was driven mostly by online shopping and strong growth in smaller metro markets such as Orlando, Fla., and Washington, D.C., according to a report released Monday by market research firm NPD Group.
Online sales of apparel were 19 percent higher during the 12 months ended February than they were the same period a year earlier, while in-store apparel sales fell 2 percent over the same period, the report said. Online sales now account for 17 percent of the apparel industry's dollars, it said.
While New York and Los Angeles account for the biggest share of apparel sales, at 8 and 5 percent, respectively, smaller markets are behind much of the growth.
Orlando's apparel sales were 23 percent higher over the year ended February than a year earlier, and Washington, D.C., experienced 18 percent growth. Phoenix and Cleveland each saw apparel sales grow 16 percent.
In Chicago, apparel sales declined 2 percent over the year ended February compared with a year earlier, the report said. Chicago accounts for 3 percent of the total apparel market, the same share as Philadelphia, San Francisco, Atlanta and Washington, according to NPD.
"Smaller metros are enjoying the growth because stores and the regions are maturing," NPD industry analyst Marshal Cohen said in an email. "The consumer has similar choices now.
"Stores are more focused on local markets and providing more of what the consumer really wants, not what the stores provide nationally. Chicago is a major shopping mecca, and as such the lack of newness of product has an even greater effect on those meccas."
The regional findings surprised retail consultant Neil Stern, senior partner at Chicago-based McMillanDoolittle, who said Chicago's larger population should give it a higher share of apparel sales than a smaller market such as Atlanta, and other reports have shown it to have a reasonably healthy retail market. But Chicago has a higher jobless rate than the rest of the country so a decline in apparel sales could reflect the continued struggles of consumers to recover from the recession, he said.
Cohen described the overall 2 percent growth in apparel sales as "good."
But with retail sales generally growing 3 to 5 percent annually, apparel is a trailing category, Stern said. It has been difficult to get sales growth in the category because of price deflation stemming from the rise of inexpensive fast fashion garments, he said.
Most of the market areas that outperformed the industry as a whole saw more dramatic in-store sales growth than online sales gains because of the greater likelihood of shoppers making impulse purchases in person, NPD said. Impulse purchases of apparel occur for 32 percent of in-store sales, compared with 22 percent of online sales.
"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," Cohen said in a press release. "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."