With weight reduction drugs like Wegovy and others, some retailers are struggling to fulfill demand for smaller sizes.
Rent the Runway, a subscription service for clothing rentals, has seen the trend toward smaller sizes firsthand. CEO and co-founder Jennifer Hyman told Wall Street Journal that more customers are switching to smaller sizes than at any time within the last 15 years. The company is especially targeting women who want to vary their clothing size, Hyman said.
“As a company, we have spent years perfecting our fit algorithms to ensure that women who are either gaining or losing weight can find the perfect size,” said Hyman Assets in an email.
A study conducted Monday by Impact Analytics, which uses AI tools to assist retailers make inventory decisions, found that demand for smaller sizes is skyrocketing in some areas. Sales of girls’s button-down shirts in small sizes (XXS, XS and S) are up 12% this yr in comparison with 2022. At the identical time, sales of larger sizes, including XXL, XL and L, are down about 11% in comparison with 2022, Impact Analytics found through a study of outlets within the Upper East Side neighborhood of Manhattan.
“Slimming America will have a huge impact on retail and could cost it about $20 million annually due to incorrect sizing curves,” said Prashant Agrawal, CEO of Impact Analytics, in a press release.
The trend towards smaller clothing sizes can also be affecting the way in which retailers view their inventory, based on a study. report by Impact Analytics. Retailers have stuck to a rigid sizing system for years that does not necessarily reflect consumer preferences and may result in lost sales and losses, Impact Analytics wrote. The proliferation of GLP-1, which is used to treat diabetes but may trigger weight reduction, is exacerbating this problem and will leave retailers with 10% of their inventory unsold at the top of the yr in the event that they don’t adapt to changing preferences.
Inaccurate sizing is a pain for retailers with already tight margins and may result in lost sales if customers cannot find the dimensions they need. Forecasting and making the suitable purchasing decisions are critical because retailers can start planning and buy inventory a couple of yr upfront, based on Impact Analytics. According to retail analyst IHL Group, retailers lose $1 trillion annually just by not stocking the sizes they need.
“To put it bluntly, in a market where precision and adaptability are paramount, failing to adapt to this dramatic shift in body sizes could spell financial disaster for fashion retailers,” wrote Impact Analytics.
Responding to consumer preferences is particularly vital for an industry whose sales have been stagnant in recent months. According to a 2018 study, sales at clothing and clothing accessories stores within the U.S. have stagnated at just below $26 billion per 30 days since January. Data from the Census Bureau.
Demand for Wegovy and other weight reduction drugs is increasing rapidly
The Food and Drug Administration approved Novo Nordisk’s Wegovy for weight reduction in 2021, and since then, demand for this and similar drugs has exploded. An estimated 15.5 million people within the U.S., or about 6% of adults, have used injectable GLP-1 preparations, based on a May study. Gallup pollAccording to Gallup, women, individuals with insurance, and older adults ages 40 to 64 are the groups most definitely to make use of these drugs.
Retailers who goal people in groups more more likely to use GLP-1, comparable to women or those on higher incomes, shall be more affected by changes in size preferences, based on Impact Analytics. However, most of these consumers are also more more likely to spend “out of revenge” after losing a few pounds – and that would also present a chance for retailers.
Wegovy’s impact on clothing size preference could possibly be magnified in the longer term, as outsized demand has led to shortages of this and similar drugs. Last month, telemedicine company Ro launched a free tool that uses user input to assist track GLP-1 doses in pharmacies. Within three weeks, users submitted 35,000 reports to tell the tracker that a pharmacy was out of stock of the GLP-1 drug they were on the lookout for. Those reports far outpace the 1,500 reports users submitted through the same period to tell the tracker that a GLP-1 drug was in stock. The company said it continues to receive a whole lot of reports of shortages daily.
