Dive Brief:

• Although sales were down for the fashion sector in the first quarter of 2023, customers are increasingly opting for luxury brands over fast fashion, according to a recent analysis sent to Fashion Dive from Mention Me, a brand referral platform.
• Average order volume grew 8% compared to the same period last year, despite sales falling 2% across the fashion industry, the analysis found. That’s been driven by the preference for luxury fashion over less expensive finds.
• Mention Me’s analysis echoes other reports that find customers are still prioritizing clothing purchases and opting for luxury fashion houses.

Dive Insight:

Despite forecasts of an impending recession, customers are still opening their pocketbooks for fashion. The sector was the third best performing sector during the first quarter, though financial services and travel experienced the largest growth during the period, according to the Mention Me analysis. 

“We often see a peak in booking holidays in January and February, while the April tax deadline drives a peak in orders for financial services,” Ben Henshall, data analyst at Mention Me, said in a statement. “It’s interesting to see fashion right up there in terms of order numbers at the start of the year.”

The analysis also found that fashion referrals grew 16% compared to the year before. That underscores that customers are introducing their friends and family members to the brands and companies they enjoy.

“The fashion sector is rife with potential brand advocates,” Simon Dring, chief operating officer of Mention Me, said in a statement. “Friends are often complimenting one another on their outfits, naturally leading to sharing where items are from and referring the brand in question.” 

Moreover, Mention Me’s analysis found that customers who buy apparel based on referrals tend to spend more than others. Within 30 days, 11% of customers who make fashion purchases also go on to make another one — representing the highest repeat rate out of any sector. 

“That presents a major opportunity for brands to grow a highly valuable customer base,” Dring said. 

Mention Me’s study, which was based on sales from more than 500 brands, aligns with similar information suggesting economic turbulence isn’t slowing down fashion purchases. 

Young consumers and those between ages 35 and 44 ranked these purchases as one of their most likely splurges for the year, according to a report from 5W Public Relations and market research consultancy Censuswide. 

Though some luxury revenues have been soft lately, other luxury fashion houses are recording strong financial results for the first quarter. That includes French luxury conglomerate LVMH, which saw a 17% revenue increase despite signs of a softening U.S. luxury market. Hermès similarly saw a 22% boost in sales, with particularly large growth in Asia.