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Subscription Services Could be a Boon for Apparel—And Here’s Why

While some retailers keep missing the mark on personalization, apparel subscription services are answering the call for a more tailored shopping experience.

According to The NPD Group, clothing subscription services, including Stitch Fix and Trunk Club, are snapping up their share of the $217.6 billion U.S. apparel market. Both companies came out on top for their individualized approach, diverse inventory, convenience and appeal to cost-conscious consumers.

“We have entered a new world of retail where the traditional leaders are faced with unconventional channel competition, and subscription services are the newest player. Consumers are more critical about the purchases they make today and no longer purchase just for the sake of purchasing,” The NPD Group chief industry analyst Marshal Cohen said. “The personalized approach of subscription services complements the shift toward more prioritized spending.”

Consumers are also becoming more aware about subscription services and their ability to deliver on their individual apparel needs. According to NPD research, 15 percent of consumers have ordered subscription box services, while 14 percent haven’t ordered them but plan to in the future.

[Read more on  the growth of subscription services: Subscription Services Deliver on Personalization and Experiences]

Although 35 percent of consumers are unaware about subscription services, companies including Stitch Fix and Trunk Club have grown their consumer reach. NPD data said membership for these services increased to nearly 5 percent of online shoppers, while their average annual spend grew by 5 percent to $170. Subscribers also allocated most of their online clothing spending to subscription box services. Stitch Fix subscribers gave a third of their designated online apparel dollars to Stitch Fix, while Trunk Club subscribers gave more than 30 percent of their online spend to Trunk Club.

Retailers are also acknowledging how this emerging channel could make or break their business initiatives. Fung Global Retail & Tech explained how some retailers, including Amazon, have launched their own subscription box services to stay relevant and keep consumers satisfied with their digital shopping journeys.

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“The boom in the subscription model poses at least some competitive threat to conventional retailers and product manufacturers, who have been responding by launching their own subscription services or acquiring subscription startups,” Fung Global Retail & Tech said in a report. “Subscriptions offer increased variety and constant, rotating newness as well as the thrill of discovery; moreover, deliveries are usually packaged in attractive boxes and appealing packaging, which enhances the feeling of ‘unwrapping’ a treat.”

What’s more, subscription services also help brands and retailers expand their global footprint as it allows consumers to find new products and apparel companies to reach new audiences.

“There is a great deal of room to grow within the subscription model, and the competitive field will continue to expand as online retailers develop subscription services and options for auto-replenishment of fashion basics,” Cohen added. “This kind of innovation, delivering personalization and convenience, will continue to change the face of retail for fashion.”