In our Street Fashion Business Resource Report”, Label Networks uncovers what’s going on in the changing denim marketplace, not only with brand preferences, but also spending patterns, key price points based on specific demographics, and new opportunities for price-point denim and premium denim. As the economy continues to spiral downward, reports indicate that the Premium Denim market in some cases has also declined. As the owners from Drifter, for example have indicated, Brands in the premium [denim] market can no longer sell jeans at $200, a pop and expect people to continue buying at that price at the pace they used to. Now once someone has their cool jeans, they might wait a bit longer before buying another premium pair.
One reason the denim market media indicates that the market has decreased is because of the volume of high-end or premium denim that’s being sold mostly among older males (30-50). However if you look at youth culture, particularly 15-25-year-olds, it’s clear that there are significant market opportunities if price points can start matching consumer demand, which some brands have been able to provide (i.e., Cheap Monday, Fox, Hurley, Levi’s).
In this story, we take a look at the results to the question “How much do you spend on denim jeans on average?”
Denim, like T-shirts, is an extremely important market for young people and continues to represent a fundamental aspect of their wardrobes, especially in the United States–which is where denim started as a utilitarian apparel item with the original Levi Strauss miner jeans. Despite the down economy, the marketplace of denim is reaching out in many directions including younger demographics buying more denim, and a greater number of brands and prices for denim which results in a dynamic market size that shifts depending on other factors in fashion primarily T-shirts and sneakers when it comes to youth culture.
Based on our data from a representative sampling of 5″, 275 young people between the ages of 15-35, on average, they spend $50 per pair for denim jeans. The highest percentages overall are 15.8% of this age group spending $30 on a pair, followed by 14% spending $40, and 11.4% spending $50. However with 5.9% spending $60, and 4.9% spending $100 on a pair of jeans, among other percentages, the average is at $50 overall. The size of the marketplace based on these averages, and the number of people within the age groups of 15-35- year-olds in the United States, and average amount of denim jeans purchased per year results in the denim size of market at $18.81 billion. Clearly with a market doing this volume of sales, denim is very important to youth and street culture fashion in general and extremely competitive. Yet while it’s competitive for most brands today, it’s vital to be in this marketplace as spending patterns indicate the importance of denim (which isn’t going away), and moving into niche directions.
For example, by gender females spend on average $47 on a pair of denim jeans; males spend on average $54 on average. This again quantifies the strength of the denim marketplace for both genders. However if factored in with the volume of denim jeans, females tend to buy more per year, but at a lower average cost. What this means is a size of market for females among 15-35-year-olds at
196 million pairs on average per year. At an average spending of $47 per pair, this is a size of market of $9.212 billion.
The size of market for denim jeans among males 15-35-years-olds is on average
178 million pairs per year. Based on average paid per pair of $54, the size of market for males within this age range in the U.S. is $9.612 billion.
In terms of targeting one’s denim brand, therefore, the balance in achieving market share is about going for a price point that equals a certain achievable volume for the brand, and/or price points that attract different target markets, with less volume, but the difference is made up from the higher costs charged. Going after target markets that buy premium or pay higher prices only can backfire not only because this sector is extremely competitive and takes a longer time and usually marketing dollars to achieve credibility, but also because there is opportunity in other markets and at other price points that can achieve brand success without losing ones cred-factor. And in a down economy, as many denim companies have noted, people who do buy premium may not buy as often, and/or are looking for a different price point without sacrificing quality.
By age groups, 26-35-year-olds spend the highest average on denim jeans at $66 per pair, followed by 15-17-year-olds spending on average $53 per pair, which indicates a strong new younger demographic thats buying denim. This is followed by 21-25-year-olds who spend on average $50 per pair on denim jeans, then 18-20-year-olds who spending on average $42 per pair on denim jeans.
Overall, the denim section quantifies the specific price points for attracting specific demographics, as well the brands that fit into various categories.
Also, based on the size and changes of the marketplace, you can see where opportunities lie and how various strategies need to be targeted based on gender and age groups. For example, at 26-years old, people tend to spend more on average, but buy less pairs per year. However this is a strong marketplace for premium denim. However the savvy demographic of 18-20-year-olds are not paying quite as much on average as 15-17-year-olds, often because they are out on their own for the first time, which again changes their preferences in types of denim, and therefore brands which are different than top preferences among other demographics. However just because this age group has a lower payment average, it doesn’t mean there is less market opportunity. For example, some savvy denim brands will see this as a way to increase sales by creating a brand, fit, and style that attract this age group, but at a price point that makes more sense such as $42 a pair vs. premium at $100. The offset amount of sales volume at the correct price point may result in a successful strategy for a target demographic that has a smaller size of market dollar- wise.
Among 21-25, while they are not buying denim as often, they are spending more per pair than 18-20-year-olds, which also indicates the brands that are most successful in capturing this marketplace, including a greater variety of premium denim but also a crossover of denim brands that are targeted for a lower price point. What’s most interesting in terms of the future of denim is with the 15-17-year-old age group that is buying denim in the highest volume, and at higher averages than even 18-20-year-olds and 21-25-year-olds. This indicates a market that’s growing up understanding denim, and is buying in volume and quantity but often still with parents money. Premium denim brands and boutiques should take note of this in terms of market opportunities in appealing to style, texture, washes, and cuts in style that may appeal most to this younger demographic.
For more information on the Denim section from Label Networks, including top brands, frequency, and stores, email firstname.lastname@example.org; (323) 630-4000 about our Premium Global Youth Culture Subscription 2008.