Retail news that keeps industry pros in the know
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We all know inflation continues to be a top-of-mind concern for retailers and consumers alike, and also that consumers continue to shop despite rising prices.
But what are these consumers shopping for and what sort of luxuries have they done away with for the time being? It’s clear that while some retailers are still struggling, it does not spell bad news for every category within retail, especially luxury and fashion.
However, a very plausible recession still seems to be in sight, so nothing’s certain, which is why even luxury retailers need to be aware of what consumers want.
Well, worry not, Square and Afterpay data in the US dove into the data to unpack what strategies retailers should be employing and how they should be targeting shoppers to keep them engaged, as part of their latest State of Retail report.
The report is based on data from the first quarter of 2023, and we broke it all down for ya (you’re welcome!).
All that glitters is…probably bought with BNPL
Yes, consumers are shopping, but a lot of them are paying it off later. Yep, still. Of course much of this demand for buy now, pay later is coming from young shoppers with a taste for all things luxury. Big surprise there!
In fact, Afterpay noted that the number of designer merchants on the Afterpay shopping app doubled between 2021 and Q1 2023. millennials accounted for 45% of luxury purchases on the platform, while Gen Z made up 16% (up from 13% in 2019), over the last 12 months ending March 31, 2023.
Ssshh…quiet luxury is on the rise
While there are several factors behind the growth and sustenance of luxury as a market despite hard times, quiet luxury (thank you, Succession) is a big one.
Square and Afterpay reported that office reopenings and a desire for sophisticated office wear is pushing the trend further as data from Square noted a rise in items such as dress shirts (19%), oversized blazers (44%), and dress sneakers (40%).
See ya later, resale: Yep, we’ve all heard it before: Resale is booming and honestly, who doesn’t like a great secondhand luxury find? Well, the current market doesn’t and seems to show a drop in both offline and online secondhand sales.
In Q1 of 2023, sales at vintage, secondhand, and thrift stores fell by 30% compared to 2022, according to the report.
This does not mean consumers have given up on sustainability, but retailers might need to rethink the types of brands that they offer through their secondhand rental programs as shoppers would likely choose premium brands over others, according to the report.