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Sales Data Suggests Apparel’s on the Upswing

Apparel sales rose 60.6 percent compared to last year, while department store sales jumped 114.3 percent, according to the Mastercard SpendingPulse report for March 2021.

The comps don’t tell the full story, of course, given that retail lockdowns began in March last year when the coronavirus began circulating in the U.S. However, comparisons to the same period in 2019 show that apparel sales were up 18.7 percent, with department store sales up 0.1 percent.

Total retail sales, excluding autos and gas, rose 26. 3 year-over-year and up 14 percent over 2019. E-commerce sales were the biggest winner, up 56.8 percent year-over-year and 85.9 percent from two years prior.

In other categories, furniture and furnishings jumped 64.8 percent year-over-year, a nod to people spending time at home during lockdown, and rose 26.9 percent over 2019. Of all the shopping categories, jewelry spiked 106.1 percent year-over-year, and up 29.7 percent compared with 2019, according to Mastercard, which measures in-store and online retail sales across all forms of payment.

The card-payment firm said sales in the first half of March rose 1.6 percent versus year-ago sales figures, and rose 46.9 percent year-over-year in the second half of the month. “Retail sales benefited from the infusion of stimulus payments, coupled with broader reopening across the country,” Mastercard said.

In a separate study of over 15,000 adults, survey takers said they were confident about the safety and effectiveness of the Covid-19 vaccines, and expressed a desire to return to “normalcy” after getting their jab, according to IBM’s Institute for Business Value. However, companies may need to update their marketing and outreach to remain competitive and successfully engage customers due to different rules, personal preferences and social norms that developed last year, IBM added.

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The good news was that most of the global consumers IBM surveyed said they’re ready to return to malls and shopping centers once vaccinated. That doesn’t mean they’ll abandon online shopping, but at least one in five respondents plans to increase in-store purchasing. Toys, games and hobbies could see an uptick of 121 percent in in-person shopping. Apparel, footwear and accessories could also see some significant gains, at up 76 percent, according to the study.

What could drive consumers to stores? In-store promotions were the top factor, especially for Gen X, at 54 percent of those surveyed and boomers at 52 percent. Additionally, local products that aren’t available online, such as small batch food products and hand-made apparel, may attract nearly 50 percent of surveyed millennials, Gen X and boomers to shop in person.

But there was one catch. Those surveyed also said vaccination levels need to exceed 70 percent in order for them to return to their pre-pandemic lifestyle patterns. The U.S. has vaccinated roughly 20 percent of the population.

If current Covid-19 vaccination rates continue, the IBM study determined that there’s a chance “most people may not regain pre-Covid-19 pandemic comfort levels until well into 2022. Amidst this uncertainty, consumers are rethinking the way they want to work, socialize, travel and shop.”

“Habits formed during the Covid-19 pandemic have raised consumers’ expectations of digital engagement, especially in service industries like retail, travel & transportation,” Jesus Mantas, senior managing partner, IBM Global Business Services, said. “As we anticipate the ‘post-Covid-19 pandemic normal,’ businesses should accelerate their digital evolution with AI and Cloud based solutions to help remain competitive. Investing in hybrid physical and digital experiences can help provide a more personalized experience.”

Gen Z respondents tended to be outliers compared with counterparts from other cohorts. While 27 percent said they plan to increase outside interaction at restaurants and free venues such as beaches and public parks, once they get their shots, most were less inclined to return to large crowd venues, like sporting events, theme parks, museums and movie theaters.