Since the outbreak of the new coronavirus, the global economy has fallen into recession, and residents’ lifestyles and spending power have undergone important changes. As the country with the largest number of confirmed cases and deaths, the United States’ economic decline and consumption contraction have become even more severe. In the second quarter of 2020, the U.S. GDP fell by 32.9% at an annualized rate from the previous quarter, the largest decline since records began in 1947. Among them, personal consumption expenditures, which accounted for about 70% of the total economy, fell sharply by 34.6%, which was the first time since such data were recorded. Worst performance. U.S. clothing and apparel retail has also been hit hard. In April, it recorded the largest decline in history, with a year-on-year decline of 86.5%. Many well-known clothing retail brands such as Brooks Brothers, Ann Taylor, LOFT, J. Crew, etc. have filed for bankruptcy protection, and thousands of clothing stores is closed.
According to the latest data from the U.S. Department of Commerce, as shown in Figure 1, in June 2020, American Apparel Clothing retail sales fell by 23.2% year-on-year, making it the category with the largest decline in retail sales. The apparel inventory-to-sales ratio was as high as 6.2 in May, much higher than the normal level of around 2.5. As can be seen from Figure 1, after the outbreak of the international financial crisis in 2008, U.S. clothing retail sales showed relatively good stability, with retail levels ranking among the top in various categories. The retail shrinkage was more severe in furniture, electrical appliances, automobiles, and gasoline. and other categories, this was also the long-term structural law of U.S. consumer goods retail sales before the outbreak of the new crown epidemic. So, with the same economic recession, high unemployment, declining income, and impaired spending power, why did the retail sales of clothing, which seemed to be daily necessities, decline so severely under the 2020 epidemic?
Figure 1: Comparison of retail sales growth of major categories of goods in the United States during the international financial crisis and the new coronavirus epidemic
Data source: U.S. Census Bureau
Usually, consumer goods respond to changes in income or price based on their elasticity of demand. different consumption changes. For example, furniture, electrical appliances, cars, etc. are durable consumer goods with relatively high demand elasticity. When personal income decreases, expenditure plans for updating durable consumer goods are more likely to be postponed. Except for a small number of luxury goods, clothing consumption mainly consists of non-durable necessities that meet daily needs, and the elasticity of demand is relatively low. Judging from the retail sales data of the United States in the past 20 years, the consumer retail sales of non-durable goods such as food and clothing are more stable. In the case of economic downturn and declining income, retail sales usually show the characteristics of slow and small decline. The retail sales of consumer goods have declined more significantly; conversely, when income growth accelerates, the demand for durable consumer goods also increases faster.
The outbreak of the new crown epidemic in 2020 broke this economic law, and clothing became the consumer product with the sharpest decline. The main reason is that the epidemic caused major changes in the consumption scene, resulting in Changes in consumption structure. In order to prevent the spread of the epidemic, various countries have generally adopted measures such as home quarantine, reducing going out, and prohibiting large-scale gatherings. In countries and regions where economic development has reached a high level, clothing has long gone beyond the basic function of covering and keeping warm, and has more functions such as improving the quality of life, carrying social etiquette, and expressing personality and style. Since the epidemic, anti-epidemic measures such as working from home and studying at home have almost completely interrupted social activities. The demand for dress in social scenes such as offices, campuses, conferences, clubs, banquets, and friend gatherings has inevitably been greatly reduced. Relevant information shows that nearly 80% of residents in the United States choose to work from home, and changes in consumption scenarios have caused a significant decline in consumer demand for clothing and accessories. When consumption scenarios are more concentrated in home life, the focus of consumption will shift more to areas related to home life. For example, since the epidemic, American residents’ spending on construction decoration, sports and leisure, etc. has increased significantly (see Figure 1) . Since most American families have terraces and courtyards, DIY house painting and garden repairs, purchasing gardening equipment such as lawn mowers, adding home fitness equipment such as trampolines and swings, and courtyard entertainment facilities such as outdoor tables, chairs, and barbecue equipment have become important during home epidemic prevention. Consumption growth point.
Figure 2: U.S. household income growth, unemployment rate and retail sales growth of some commodities from 2007 to 2020
Data source: U.S. Bureau of Economic Analysis, U.S. Census Bureau, U.S. Department of Labor
It can be seen that the new coronavirus Since the outbreak of the epidemic, multiple factors such as rising unemployment, declining personal income, and the suspension of retail businesses have caused consumer demand to shrink. The changes in lifestyle and consumption scenarios brought about by epidemic prevention and control measures are important reasons for the significant decrease in clothing and apparel consumption. , this is an unavoidable feature of the consumption structure in the United States and even many consumer markets during the ongoing epidemic. When the international financial crisis broke out in 2008, although the U.S. financial system suffered heavy losses, the economy fell off a cliff, and the unemployment rate increased, social life was not interrupted and the consumption scene did not change significantly. Therefore, the consumption structure of residents did not change. .
Recently, many countries, including the United States, have begun to gradually restart their economies. However, as the global epidemic has not yet peaked, maintaining social distance has become a priority.This indicates that clothing and apparel consumption will continue to be weak until the epidemic is effectively controlled and social activities basically return to normal. According to a McKinsey survey of U.S. consumers in April, 67% of respondents expected to spend less on clothing than before; an annual back-to-school survey conducted by Deloitte in early June showed that college students during the back-to-school season Clothing consumption will be reduced by 17%.
Fiber products related to epidemic prevention have become the most important consumption highlight in the textile industry chain. From January to June, the United States imported 8.95 billion US dollars of global masks, a year-on-year increase of 444.4%. 87.3% of them are from China.
The epidemic is still ongoing, and it is still unknown when the lifestyle can return to what it was before the epidemic. According to the principle of disaster economics and the mutual exchange of benefits and benefits, we can better adapt to the changes in lifestyle and scenarios under the normalization of epidemic prevention and control, and develop more fiber products that meet the needs of health protection and home life scenarios, which may be able to provide people in the darkest moments. brings a new dawn to the fashion industry.
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