mexico and the global apparel industry may 2018 · use refillable water bottle (91%) limit water...
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Mexico and the Global Apparel Industry
Trends and Challenges
May 2018
© 2018 Cotton Incorporated
COTTON INCORPORATED’S
2
CONSUMER & RETAIL INSIGHTS
625,000+
REVIEWS ANALYZED
1,500,000+
GARMENTS AUDITED
300,000+
INTERVIEWS CONDUCTED
© 2018 Cotton Incorporated3
Global Apparel Spending 2030Growth from 2016 to 2030 (Billions USD)
3
$587+112%
$401+19%
$439+18%
Source: Euromonitor
$25+37%
$14
+49%
© 2018 Cotton Incorporated4
Global Trends and ChallengesMexican consumers have a strong interest in clothes
4 Source: CCI & Cotton Incorporated’s Global Lifestyle Monitor
Preferred Item to Shop
Food – 33%
Clothes – 32%
Shoes – 13%
Electronics – 12%
Cosmetics – 5%
Top Purchase Drivers
Comfort
Durability
Quality
Style/ Price/ Fit
© 2018 Cotton Incorporated
Mexico and the Global Apparel Industry
5
Outline
Do Better for Self
Do Better for the World
SelfExpression
Retail Experiences
© 2018 Cotton Incorporated
Do Better for Self
6
Do Better for Self
Stress in Modern Life
Smart Clothing for Stress Relief
Performance Technologies
Outline
© 2018 Cotton Incorporated7
Problem: Stress in Modern Life
Source: Zipjet
Modern life has brought high stress to many
© 2018 Cotton Incorporated8
Performance Features in Apparel - MexicoConsumers want their clothing to do more
TemperatureControl
78%
Fade Resistant
76%
EasyCare
78%
UV Protection
70%Moisture Management
74%
OdorResistant
76%
Stain Resistant
75%
Wrinkle Resistant
78%
Percent saying they are likely to look for the following features in apparel:
Source: CCI & Cotton Incorporated’s Global Lifestyle Monitor
© 2018 Cotton Incorporated9
Stress-Relieving PerformanceConsumers are attracted to smart textiles that address physical symptoms of stress
53% 49% 49% 44%37% 34%
51%44% 47%
41% 40% 44%
69% 64% 63% 58%49%
79%
Relieve Stress Monitor HeartRate
MonitorHydration
Alert forIncorrect
Movement
ManageMood/Emotions
MonitorPerspiration
U.S. Mexico Colombia
Percent saying they are likely to purchase clothing with the following features:
Source: Cotton Incorporated’s Lifestyle Monitor and CCI & Cotton Incorporated’s Global Lifestyle Monitor
© 2018 Cotton Incorporated10
Apparel for Stress ReliefIntegrating technology in “smart apparel”
© 2018 Cotton Incorporated11
Apparel for Stress ReliefIntegrating technology in “smart apparel”
© 2018 Cotton Incorporated12
Do Better for SelfApparel can help ease burden of modern life
Stress is building for consumers across the globe
Add performance features so that clothing can do more for consumers
Explore smart textiles for stress-relieving performance
© 2018 Cotton Incorporated
Do Better for the World
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Do Better for the World
Environmental Issues
Circular Fashion
Marketing Sustainable Fashion
© 2018 Cotton Incorporated14
Environmental Issues Affect Daily Life
China94%
India91%
Mexico94%
Italy91%
Germany81%UK
75%
US75%
Consumers in developing markets are especially concerned with environmental change
Source: CCI & Cotton Incorporated’s Global Environment Survey
© 2018 Cotton Incorporated15
Common Sustainable ActionsConsumers take various actions to improve environmental conditions.
Purchase appliances that conserve energy (87%)
Recycle cans, bottles, paper, etc. (85%)
Use refillable water bottle (91%)
Limit water usage at home (88%)
Purchase locally made products (80%)
Use my own bags while shopping (71%)
Recycle clothing or textiles (78%)
Buy clothing made from sustainable or natural materials (67%)
Reduce consumption of goods (78%)
Source: CCI & Cotton Incorporated’s Global Environment Survey
© 2018 Cotton Incorporated16 Source: CCI & Cotton Incorporated’s Global Environment Survey
Mexico• Protect the world for
future generations
• Live a healthier lifestyle
• Create a better world for myself
U.S.• It is the right thing to do
• Protect the world for future generations
• Live a healthier lifestyle
Why Take Sustainable ActionsConsumers across the globe have different motivations for seeking sustainability clothing
© 2018 Cotton Incorporated17
Influence of Sustainability on Clothing PurchasesSustainability clothing matters to consumers
Source: CCI & Cotton Incorporated’s Global Environment Survey
61%
46%
69%
© 2018 Cotton Incorporated18
Influence of Sustainability on Clothing PurchasesSustainability is especially influential in the Baja and Gulf regions.
Source: CCI & Cotton Incorporated’s Global Environment Survey
Percent saying environmental friendliness influences clothing purchases
North 67%
Gulf, 75%
Pacific, 67%
Central, 67%
Baja Peninsula
Gulf Coast
Mexico City
North
Central
Pacific Coast
Yucatán PeninsulaYucatan, 65%
Mexico City, 70%
Baja
Peninsula, 77%
More influence
Less influence
© 2018 Cotton Incorporated19
Brands Partner in SustainabilityBrands connect with consumers over environmental concerns
© 2018 Cotton Incorporated20
Circular FashionCommitment to a more sustainable future
© 2018 Cotton Incorporated21
Circular Fashion: Increasing Longevity Brands increase clothing durability to reduce industry waste
© 2018 Cotton Incorporated22
Circular Fashion: End of lifeBrands looking for end of life uses for garments
© 2018 Cotton Incorporated23
Cotton Isn’t Just for ClothingCotton has many uses
© 2018 Cotton Incorporated24
Do Better for the World
Recognize that environmental issues are important to consumers
Connect with consumers by speaking to environmental concerns and motivations
Partner in sustainability with durable clothing and circular fashion
© 2018 Cotton Incorporated
Self Expression
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Outline
SelfExpression
Athleisure Lifestyles
Denim Reimagined
© 2018 Cotton Incorporated26
Global Denim Jeans and Athleisure SalesSales of athleisure levels off but both denim and athleisure are still projected to grow
Source: Global Industry Analysts, Inc. & Euromonitor International
50
52
54
56
58
60
62
64
66
68
2009 2010 2011 2012 2013 2014 2015 2016 2017
Bill
ion
s o
f U
SD
Sports-Inspired Apparel Denim Jeans
+3.5%
+2.5%
+28%
© 2018 Cotton Incorporated27
AthleisureAthleisure has slowed but is still projected to grow as consumer interest remains strong
Source: CCI & Cotton Incorporated’s Activewear Survey
U.S. MEXICO
56%67%
44%61%Activewear is my new casual wear
Athleisure will be around for a while
© 2018 Cotton Incorporated28
AthleisureBrands utilize cotton-rich collections for their athleisure lines
Percentage of consumers who prefer cotton-rich activewear.
54% 71%
U.S. Mexico
Source: CCI & Cotton Incorporated’s Global Lifestyle Monitor
© 2018 Cotton Incorporated29
Microplastics IssueMicroplastics pollution widespread
Source: Adventurers and Scientists for Conservation Microplastic Study
© 2018 Cotton Incorporated30
Microfiber ResearchCotton Research on Microfiber Degradation
Aquatic Biodegradation – Results0
10
20
30
40
50
60
70
80
90
% B
IOD
EGR
AD
ATIO
N
0
Cotton76%
Polyester4%
DAYS
25020015010050
Source: North Carolina State University
© 2018 Cotton Incorporated31
Denim AffinityMexican consumers especially love denim
Source: Cotton Incorporated’s Lifestyle Monitor and CCI & Cotton Incorporated’s Global Lifestyle Monitor
55%
71%
Percent who love or enjoy wearing denim:
Average days/week wear denim:
4.6 days
3.4 days
U.S. Mexico
© 2018 Cotton Incorporated
22% 21%
36% 37%
8% 30% 8%
49%32%
23%
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Preference by Type
At Work
RunErrands
Out toDinner
Hang OutAt Home
Denim
Activewear
Bottomswear Preferences by Occasion – MexicoConsumers prefer denim jeans outside the home
Just Be Comfortable
Source: CCI & Cotton Incorporated’s Global Lifestyle Monitor
© 2018 Cotton Incorporated33
Authentic DenimConsumers view cotton as the only authentic denim
Source: Cotton Incorporated’s Lifestyle Monitor
Percent of consumers who say cotton jeans are more ________ compared to jeans made with manmade fibers
Authentic
88%
Sustainable
88%
Comfortable
87%
Quality
85%
© 2018 Cotton Incorporated34
Self-Expression
Consumers value self-expression and look to clothing to express themselves
Incorporate cotton into activewearofferings to increase its comfort
Build on denim jeans’ cachet by marketing its versatility and style
© 2018 Cotton Incorporated
All About Retail
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Outline
All About Retail
Consumer Shopping Journey
In-store Experiences
Online Inspiration
© 2018 Cotton Incorporated36
Consumer Shopping JourneyConsumer shopping journey is complex
SEARCH THE WEB
EMAILED ADS
SHOPPING IN STORE
WORD OF MOUTH
PURCHASE
MOBILE SEARCH
ONLINE REVIEWS
SHARE
TV/DIGITAL ADS
ONLINE PURCHASE
© 2018 Cotton Incorporated37
Stores Opening Focus on Price, Convenience, and BeautyOver 4,000 net stores opening
Source: Company Reports & IHL Group
• Rue 21
• Sears & Kmart
• Gymboree
• The Limited
• Bebe Stores Inc.
• Wet Seal
• JCPenney
• BCBG
• American Apparel
• Gordmans Stores, Inc.• Michael Kors• Macy’s• Gap• Guess• Chico’s• Lucy Activewear• Lululemon Athletica
• Dollar General
• Dollar Tree
• 7 Eleven
• Couche-Tard
• Aldi
• TJX
• Tractor Supply
• Sally Beauty
• Casey’s
• Ulta
• Five Below
Stores Closing: Stores Opening:
For Each Company Closing Stores, 2.7Are Opening Stores
© 2018 Cotton Incorporated38
Mexicans and ShoppingDespite its changes, Mexican consumers still enjoy the retail experience
I love/like clothes shopping
68%
I enjoy the experience of shopping for clothes
in a physical store
47%
I would rather spend my money on things other than clothes
40%
Source: CCI & Cotton Incorporated’s Global Lifestyle Monitor
© 2018 Cotton Incorporated39
Closets Full of ClothesMexicans own more clothes
World
75
Mexico
54
U.S.
76
Average number of garments owned:
84
Source: Cotton Incorporated’s Lifestyle Monitor and CCI & Cotton Incorporated’s Global Lifestyle Monitor
© 2018 Cotton Incorporated40
Consumer Shopping JourneyMexicans spend more of their shopping journey in physical stores
73% 69%77% 77%
45%
66%72%
55%54%
67%74%
61%
Clothing research Pre-purchasequestions
Purchase Repeat purchase
Mexico
U.S.
World
Percentage of consumers who prefer a physical store for the following:
Source: Cotton Incorporated’s Lifestyle Monitor and CCI & Cotton Incorporated’s Global Lifestyle Monitor
© 2018 Cotton Incorporated41
Online is an emerging source of ideas for younger consumers
41
35+ yrs. old 15-34 yrs. olds
8%Brand or RetailerSites/Emails/Apps
26%Traditional
Media
9%Social Media
48%OtherPeople
58%OtherPeople
26%Traditional
Media
13%Brand or RetailerSites/Emails/Apps
17%Social Media
Source: CCI & Cotton Incorporated’s Global Lifestyle Monitor
Where Clothing Ideas Come From: - Mexico
© 2018 Cotton Incorporated
76%
71%
66%
65%
64%
63%
56%
49%
46%
19%
Argentina
United States
UK
China
Mexico
Colombia
Japan
Indonesia
Germany
India
42
Social Media Continues to Influence ConsumersSocial network users by country
Source: Hootsuite & We Are Social’s Digital in 2018
© 2018 Cotton Incorporated43
Traditional Retail Is Still Very Much Alive In-store apparel shopping still king
Percentage of consumers who have ever shopped for clothing online:
Mexico
49%
U.S.
89%
World
72%
Source: Cotton Incorporated’s Lifestyle Monitor and CCI & Cotton Incorporated’s Global Lifestyle Monitor
© 2018 Cotton Incorporated44
Enjoy Most About Shopping – MexicoConsumers find much to like about their favorite stores
Ease of Shopping
35%
Convenient Location
18% Styles16%
Sales/Promotions
52%
Percent saying they like the following features about their most-shopped clothing store
Source: CCI & Cotton Incorporated’s Global Lifestyle Monitor
Quality of clothing
16%
Prices28%Selection36%
© 2018 Cotton Incorporated45
AmazonShare of the Fashion Market Expanding
© 2018 Cotton Incorporated46
Shopping is about ExperienceConsumers prefer a multifaceted shopping experience
Communication
REI: Climbing Wall, Denver, COB8ta technology “experience” stores
“The best retail environments will create a true sense of arrival, destination, and community”
- Retail Design Collaborative, 2018
© 2018 Cotton Incorporated47
Frictionless Payment A new way to bring shopping ease to physical stores
Support Frictionless
Payment Methods
79%
Sensor
Fingerprinting
50%
Facial
Recognition
35%
Retinal
Scanning
31%
Source: Juniper Research report: Future In-store Retail Technologies: Adoption, Implementation & Strategy 2017-2022
© 2018 Cotton Incorporated48
Mixing Digital and Physical Is Essential Keep your customers focused on your brand and shopping experience
Would like brands to combine
digital in physical stores
43%
Gen Z55%
54% Gen Y
Overall
Source: Cotton Incorporated’s Lifestyle Monitor™
© 2018 Cotton Incorporated49
Searching for CottonEasing the Search for Cotton Clothes
Aggregates Cotton Collections
Shoppable Cotton Runway
© 2018 Cotton Incorporated50
All about Retail
Preference for physical stores remains strong, especially in Latin America
Invest in consumer experience to combine entertainment and commerce
Seamlessly blend digital in the physical stores to keep consumers engaged
© 2018 Cotton Incorporated51
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Mexico and the Global Apparel Industry
Trends and Challenges
May 2018