Apparel’s 2021 Global Growth Opportunity

The 2020 Effect

As COVID has shuttered stores and kept shoppers at home, unsurprisingly, e-commerce and omnichannel offerings have seen explosive growth. For many consumers, the safety and convenience of online shopping will mean the move is a permanent one.

With fashion sales in 2021 dipping below 2019 levels by as much as 15%, retailers and brands need to double down on outperforming channels and markets.

With many consumers still wary of spending, retailers are facing reduced demand. In 2021, fashion brands will pivot to navigate the new normal, looking to rebuild with a more resilient and adaptable business model. Understanding new shopper behaviors and needs and meeting customers wherever they are is more imperative than ever.

71% of fashion executives expect their online business to grow by 20% or more in 2021.

Responsive retailers are seizing the global e-commerce opportunity and looking to new markets, where there is faster recovery, for revenue opportunities. Many brands that embraced cross-border e-commerce in 2020 or earlier have seen impressive results as demand popped up in unexpected markets. Increasing geographic diversity is imperative to mitigate risk and maximize the addressable audience.

Brands need a solution that will enable rapid entrance to new markets, offering a domestic-equivalent experience that is personalized and friction-free. These brands will be in a better position to recover from 2020 and weather future economic uncertainty.

“Successful fashion players must optimize their online experience and channel mix while finding persuasive ways to integrate human touch.”
Business of Fashion

Resilient Brands Act Fast During Economic Slowdowns

In 2021, we will see businesses working hard to recover from the economic blow caused by the pandemic.

With extended lockdowns, store closures, travel restrictions, and the reopening of stores still unpredictable, brands and retailers must embrace changing consumer behaviors and make quick, bold decisions. Investing in top-line growth as early as possible accelerated the rebound of resilient brands after the 2008 financial crisis and led to revenue increases of up to 30% compared with those of non-resilient brands.

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Even as the vaccine is rolled out around the world, the future of in-store shopping is uncertain. Today, more than 80% of leaders at consumer and retail companies report that they are making and implementing major decisions faster than before. Best in class retailers know that to recover from 2020 and be in a strong position for the future, they need to think creatively about identifying revenue opportunities.

The Global Growth Opportunity

Cross-border growth has accelerated beyond all expectations.

In 2018, cross-border e-commerce was a $175 billion market and was on track to grow to US$423 billion by 2023. It is now projected to make up 17% of e-commerce in 2023, with sales of US$736 billion globally.

According to an ESW global shopper survey in December 2020, one in every four consumers had purchased clothing from a country outside their own in the past six months. The need for apparel brands to invest in cross-border e-commerce is undeniable.


Brands and retailers partnering with ESW saw explosive cross-border growth in 2020 in multiple and often surprising markets, with same-store order volumes up 82% in 2020 vs. 2019.

400% Growth for Iconic US Fashion Brand

This US-based fashion brand was looking to reinvent its direct-to-consumer (D2C) strategy in Canada, a market of key strategic importance.

Having identified demand in that market, they needed a rapid way of reaching Canadian consumers and fulfilling orders without compromising the brand experience or requiring extensive in-house development. They selected ESW because of the company’s experience in localization in over 200 markets, its speed to market capability, and the bespoke capabilities ESW was able to provide for the company, such as a ‘ship from store’ solution.

ESW worked with the client to ensure that Canadian shoppers would have a domestic-equivalent brand experience, localized to make checkout smooth and seamless. ESW developed a robust solution that could handle increased logistics and supply chain demands during peak periods and unexpected events like COVID-19 when order volume increased by over 400%. One of their key requirements was an omnichannel solution. This would enable them to leverage SKUs held in-store, in addition to their warehouses. This approach both increased efficiency and enabled the brand to offer a wider array of items, sizes, and price points. To support the great online experience that shoppers would expect, ESW also implemented an efficient returns process that allowed them to issue refunds within about 48 hours.

“We could see that ESW was as invested as we were in making this market as successful as possible. Having them on board meant that [we] could leverage their years of experience and technology R+D to enter the market efficiently and effectively.”

– Director of Ecommerce Operations

This well-known fashion house has seen remarkable results since implementing ESW’s solution:

Calvin Klein3

2021 Consumer Trends

After a year of social distancing, consumers in all demographics have become more confident purchasing online, in many cases regardless of geography.

In a December 2020 global survey, 68% of consumers had shopped cross-border in the past six months. More than half of those (52%) said they had made six or more purchases from a website outside their own country.

With travel expected to be limited for at least the first half of 2021, brands will need to focus on markets where recovery is accelerating at a greater pace. To have a strong position in the future, providing a domestic-equivalent experience in all cross-border markets should
be a priority.

Sixty-six percent of fashion executives don’t expect travel retail sales to recover their former growth levels for 2-3 years. Given this trajectory, it’s important that retailers offer an online experience that’s local, convenient, safe and seamless, regardless of customer location.

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Without ready access to in-store shopping, and with the heightened need for contactless transactions, many consumer behavior trends that accelerated as a result of COVID are here to stay.

Click & collect transactions will represent 8.2% of e-commerce sales, up from 6.1% in 2019, and will account for 20.4% of total US e-commerce growth in 2020.

59% of US online shoppers think it’s important for a retailer to offer the ability to buy online and pick up in-store.

Following the pandemic, 27% of consumers expect to spend more time browsing/researching online before visiting stores.

Personalizing the online experience will also be key to retaining loyal customers. Brands are seeing virtual try-on tools like Zeekit increase conversion rates by as much as 5x and reduce return rates. These will be particularly important for digitally savvy Gen Zers, a demographic of steadily growing influence for retailers.

“Brands will need to continue offering top-notch digital customer service even after the pandemic subsides. And it has to be seamless.”
– Sarah Willersdorf, Boston Consulting Group

The conscious consumer

The rise of the socially conscious shopper also continued in 2020. A clear understanding of what is important to these shoppers as they move through the purchase journey will set brands apart. Issues such as employee working conditions and a brand’s environmental impact will be factors in the buying decision for many consumers.

66% of consumers said they would stop or significantly reduce shopping at a brand if they found it was not treating its employees or suppliers’ employees fairly.

More than 3 in 5 consumers said sustainability was a factor in purchase decisions in a May 2020 McKinsey survey.

Spotlight: Social Commerce
The rise and growth of social commerce also highlights the importance of brands having a holistic strategy in place. Nearly 30% of US shoppers have made at least one purchase via social channels; that number is expected to increase to nearly 40% by 2024.

Apparel Trends

In tandem with the conscious consumer is the rise of circular fashion. With the demand for sustainability growing, especially in the fashion sector, retailers need to adapt to a different business model that incorporates circular fashion and sustainability.

The online second-hand market is set to grow 27% in 2020 by 2029, it will be a larger market than fast fashion.

Extending the lifecycle of a product is one avenue for addressing the environmental costs of the fashion industry. As well as being able to influence brand perception, brands can drive additional sales by tapping into this alternative revenue stream and generating higher traffic.

With the exception of athleisure and activewear, most apparel categories saw double-digit declines in 2020. In a recent Klarna report, 90% of items in customers’ wishlists were athleisure products.

This trend is unlikely to disappear any time soon, particularly as work-from-home remains prominent in 2021 and beyond. A number of brands across the fashion world, from luxury to traditional sportswear, are adding loungewear categories to their offering to embrace this trend.


Investing in D2C

With many retail partners and wholesalers on shaky ground and the lack of control marketplaces provide, investment in D2C is more essential than ever.

  • Provides visibility of all data, allowing for better decision-making around experience, merchandising, inventory positioning, and more.
  • Offers full control and flexibility over the shopper journey, identifying and optimizing conversion points.
  • Positions brand closer to the customer
  • Protects and avoids dilution of the brand
  • Supports brand marketing initiatives
  • Builds loyalty to the brand – not the platform
  • Drives higher customer lifetime values

Unlock Cross-Border Demand for Your Brand: A To-Do List

  1. Identify your most profitable markets and find a way to scale them. Can you optimize current markets, or are there regions where you are receiving web traffic but currently not set up for e-commerce?
  2. Look at your shopper experience in existing markets and identify ways to optimize it. Can you add more local payment options? Better local shipping carriers? A more transparent shopping experience that doesn’t surprise shoppers with duties or other fees at checkout?
  3. Build internal teams as well as partnerships with multiple vendors to handle cross-border complexities, including local demand generation, omnichannel, compliance, payment, returns, and customer service, while maintaining a consistent brand experience across markets.

Partnering With a Solution Provider is the Fastest, Most Cost-Effective Way to Achieve Your Goals of Cross-Border Expansion

ESW combines innovative technology, deep expertise, local knowledge, and global infrastructure to create frictionless shopping experiences in over 200 markets.


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