Apr 8, 2022
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Off-price fashion market to fuel full-price segment from 2025 to 2030 - McKinsey

Apr 8, 2022

Off-price, a large segment within the overall fashion market, is set to grow five times faster than the full-price segment from 2025 to 2030. 

Report: Off-price fashion market to fuel full-price segment from 2025 to 2030. - Facebook: Premium Outlets Montreal

According to a new report by McKinsey, which included an analysis of global data on the off-price market and a survey of 11,000 consumers in 10 European countries, total revenue for the European Union’s fashion industry was €368 billion in 2021, with the off-price segment accounting for 11 percent, or €40 billion. This share is projected to rise to 12 percent in 2025.

Overall, the European online off-price supply is estimated to grow 13 to 16 percent annually from 2021 to 2025, leaving sufficient stock if demand growth accelerates. 

Fuelling off-price fashion is an increasingly strong online presence. In fact, the online channel makes up about 40 percent of the off-price market, a far higher share than fashion overall, which is only expected to grow as it provides greater convenience, simplicity in filtering and browsing, and breadth of assortment.

Currently, there are off-price players that base their sales models on flash sales, including dress-for-less, limango, Veepee, and Zalando Lounge, who offer products for a limited time. Off-price players are also offering a standing assortment of fashion items, while luxury mystery box platforms have emerged in the past several years. 

Likewise, the offline world has also evolved over the past few years with off-price malls now offering a better and more refined shopping experience. 

Looking ahead, for brands who want to capitalize on off-price, the report suggests “they should treat it as a complementary rather than stand-alone channel.” 

“Fashion brands should develop a strategy that treats off-price as a largely separate yet complementary segment for their full-price offerings. The goal should be to expand the overall business while fiercely protecting brand reputation,” the report said. 

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