As we monitor the start of the busiest time of year for Retail sales, we look to The Crowd to indicate what the next few months will bring. Leveraging HundredX’s proprietary listening methodology, we evaluate more than 230,000 pieces of feedback from real customer experiences across the country. Focusing on the Apparel sector, we develop insights into future Net Purchase Intent (NPI), the sentiment drivers behind changes in intent, and Customer Satisfaction (CSAT).
We observed a broad pullback in overall consumer Retail Net Purchase Intent during the past year, falling from 1% trailing three months ended (T3M) October 2021 to -4% T3M October 2022. During the last six months, this trend became more pronounced across almost every Retail sector. Overall Apparel NPI remained stable in October 2022, indicating growth for retail sales for clothing and accessories stores, as reported by the Census Bureau, is likely to remain low single digits in the coming months. Reported growth in that category was 2%–4% for July to September 2022 versus the prior year, down from 20%+ in the first quarter 2022.
As a reminder, NPI reflects the percentage of customers who plan to purchase more of a brand during the next 12 months minus the percentage that plan to purchase less. The monthly retail sales data reported by the US Census Bureau for 10 sub-sectors HundredX covers has an average correlation of about 70% with the NPI data for those industries. We find changes in the direction of NPI tend to occur two to six months before the same trend occurs for reported retail sales figures.
NPI for E-Commerce is one Retail group that has seen improvement during recent months and is positive overall, at 1% for T3M October 2022, up from -1% in June 2022. We believe modestly positive NPI, along with its gains over other sub-sectors that remain flat to down, indicates consumers will most likely continue to spend more money on E-commerce relative to other Retail areas. Year-over-year growth in Retail sales for Electronic shopping improved every month, moving from 8% in May 2022 to 14% in September 2022. These strong rates should remain sustainable and may even improve further during the coming months.
Despite the overall Apparel industry remaining flat on NPI, we do see certain brands within the industry showing positive NPI changes, implying they will likely see improving growth and market share. Analyzing the entire Apparel group, The Crowd intends to spend more with the following brands.
When we compare trends in a brand’s NPI relative to the Industry NPI, we find the top performers who gain in NPI relative to bottom performers tend to gain market share within a sector. A number of brands within the Apparel sector appear to continue gaining market share, indicated by positive change growth above the sector’s average.
We also show select positive change for brands that still may have lower overall NPI but saw customers’ purchase intent change much more than the rest of the group.
We also find Customer Satisfaction (CSAT) for Apparel (4.5) remained steady over the course of the last year, one of the top measures for any sector in our coverage. HundredX measures CSAT on a 5-point scale.
Sentiment towards a driver of CSAT is measured by Net Positive Percent (NPP), which is the percentage of customers who say a driver (such as Quality or Price) is a reason they like a brand/product minus the percentage who say it is a reason they do not like it. The top factors driving Apparel customer satisfaction, and the reason why they prefer a specific brand include Comfort (chosen as top driver 70% of the time), Quality (67%), Styles (67%), Sizes & Fit (66%), Durability (65%), and Brand Image (52%).
While The Crowd tells us that the overall outlook for Retail purchase intent will most likely continue its mixed trend, with Retail continuing to show negative or little NPI growth, select Apparel brands will gain market share relative to the broader sector. We continue to monitor trends within Retail, Apparel, and other areas to see if any changes emerge as the shopping season progresses as well as into 2023.
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