mexico and the global apparel industry may 2018 · use refillable water bottle (91%) limit water...

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%


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



5

Outline

Do Better for Self

Do Better for the World

SelfExpression

Retail Experiences


Do Better for Self

6

Do Better for Self

Stress in Modern Life

Smart Clothing for Stress Relief

Performance Technologies

Outline


Problem: Stress in Modern Life

Source: Zipjet

Modern life has brought high stress to many


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


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


Apparel for Stress ReliefIntegrating technology in “smart apparel”


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



13


Environmental Issues

Circular Fashion

Marketing Sustainable Fashion


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


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%)


© 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


Influence of Sustainability on Clothing PurchasesSustainability clothing matters to consumers


61%

46%

69%


Influence of Sustainability on Clothing PurchasesSustainability is especially influential in the Baja and Gulf regions.


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


Brands Partner in SustainabilityBrands connect with consumers over environmental concerns


Circular FashionCommitment to a more sustainable future


Circular Fashion: Increasing Longevity Brands increase clothing durability to reduce industry waste


Circular Fashion: End of lifeBrands looking for end of life uses for garments


Cotton Isn’t Just for ClothingCotton has many uses



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


Self Expression

25

Outline

SelfExpression

Athleisure Lifestyles

Denim Reimagined


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%


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


AthleisureBrands utilize cotton-rich collections for their athleisure lines

Percentage of consumers who prefer cotton-rich activewear.

54% 71%

U.S. Mexico



Microplastics IssueMicroplastics pollution widespread

Source: Adventurers and Scientists for Conservation Microplastic Study


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


Denim AffinityMexican consumers especially love denim


55%

71%

Percent who love or enjoy wearing denim:

Average days/week wear denim:

4.6 days

3.4 days

U.S. Mexico


22% 21%

36% 37%

8% 30% 8%

49%32%

23%

32

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



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%


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


All About Retail

35

Outline

All About Retail

Consumer Shopping Journey

In-store Experiences

Online Inspiration


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


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


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%



Closets Full of ClothesMexicans own more clothes

World

75

Mexico

54

U.S.

76

Average number of garments owned:

84



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:



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


Where Clothing Ideas Come From: - Mexico


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


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%



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


Quality of clothing

16%

Prices28%Selection36%


AmazonShare of the Fashion Market Expanding


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


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


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™


Searching for CottonEasing the Search for Cotton Clothes

Aggregates Cotton Collections

Shoppable Cotton Runway


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


cottonworks.com


Trends and Challenges

May 2018

mexico and the global apparel industry may 2018 · use refillable water bottle (91%) limit water...

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