What’s the Story? 

We discuss five key insights into the custom clothing and footwear market and identify opportunities for brands and retailers. Our coverage of apparel customization includes clothing and footwear with customizable colors, sizes and styles (including decorations, patterns and fabrics). We exclude custom apparel in the luxury and wedding sectors.

• Color customization services enable consumers to select their own product color combinations, with services including the NIKE By You Shoe Customizer, the New Balance Custom Shoes service and PUMA’s Custom offering.
• Size customization includes made-to-measure and made-to-order items, with offerings includingAmazon’sMade for You, Indochino’s custom suits services and LogoSportswear’s custom plus-size clothing. We exclude services offered by dedicated tailors as opposed to apparel brands and retailers.
• Style customization services include Ralph Lauren’s Create Your Own service, Levi’s Tailor Shop and UNIQLO’s UTme! app.

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Figure 1. Coresight Research’s Coverage of Apparel Customization [caption id="attachment_128689" align="aligncenter" width="725"] Source: Coresight Research[/caption]  

Why It Matters

The apparel industry is in continuous evolution and, in 2021, is experiencing a bounce back from the slump in demand in 2020. In this context, we see customization as a key way for brands and retailers to differentiate themselves with innovative and compelling product offerings. Among 24 apparel brands and retailers in the Coresight 100 (our focus list of the largest and most influential companies in the global retail ecosystem), 13 offer apparel customization services. We expect the role of customization to continue to grow and discuss five key insights to inform retail players of opportunities in the global apparel market.

Five Key Insights into the Custom Apparel Market: A Deep Dive

1. Market Positioning Coresight Research estimates that the global custom apparel market captured just under 5% of the total apparel market in 2020. The market is gaining traction and is set to see year-over-year growth of 7% in 2021 according to Euromonitor International. While we don’t expect custom apparel to become mainstream in the near future, we view customization as an important part of the market—it serves a niche consumer group looking to showcase their individuality with unique purchases, as well as consumers looking for solutions to personal style or size requirements. We identify three key drivers of the global custom apparel market:

• Overall apparel market recovery

The coronavirus pandemic drove varying levels of apparel market decline across countries worldwide in 2020. In 2021, we expect to see an overall recovery of the global apparel market. Specifically, we estimate that the US apparel and footwear market will recover with 7.0% growth in 2021, and we expect to see 8.0% and 11.8% growth in the UK and China apparel markets, respectively. With the rollout of vaccinations and the gradual easing of lockdowns in many countries in 2021, we expect consumers to turn their interest to customized apparel as they look to renew their wardrobes after cutting spending on new clothes in 2020.

• Sizing problems

Consumers’ sizing and fit concerns, including size ranges and consistency, present a challenge for retailers in terms of consumer satisfaction and managing returns. These issues are often exacerbated through online shopping which removes the option to try before you buy. Offering products with personalized sizes, styles and fits through customization services will help retailers to address this issue and attract consumers.

• Supply chain optimization

Driven by disruptions amid the pandemic, many apparel players are looking to shift toward leaner supply chains. Made-to-order or made-to-measure models enable brands and retailers to produces products in response to orders, helping to reduce returns and better manage warehouse inventory. Many global apparel manufacturers accumulated a stockpile of goods during the pandemic and are now calling for demand-driven technologies and business models to lower inventory risk and improve production efficiency. We view this trend as beneficial to the growth of the custom apparel market. 2. Key Customization Categories  We have identified denim, T-shirts, sports shoes and suits as four focus categories at the forefront of apparel customization. Consumer demand for customized denim, T-shirts and sports shoes is primarily driven by a desire for unique products whereas suit customization is largely driven by sizing problems. Apparel categories such as accessories, blouses, dresses, skirts and trousers are currently underdeveloped as customization categories in the apparel market.

• Denim

We are seeing numerous denim retailers offer denim customization services to expand style options to suit individual consumers. For example, Levi’s offers consumers the option to personalize products with options including type of denim wash, tint color (midnight, black or rose), pattern (natural, worn, bandana, logo, camo or leopard) and “wear,” which refers to added rips or distressing. Consumers can also customize the leather logo patch on the brand’s jeans, with a choice of six colors. Moreover, Levi’s offers customized embroidery or graphics services on selected denim products. Other denim brands and retailers that offer custom product services include Denim Ink, Method of Denim and Unemployed Denim.

• T-Shirts

T-shirts are a popular category in apparel customization, with retailers such as Rag & Bone, UNIQLO and Zazzle offering customization services to boost customer engagement. For instance, UNIQLO offers consumers the option to “design your own T-shirt” featuring photo uploads, pictures, stickers or messages, with customized items available for next-day collection. Rag & Bone looks to attract customers interested in personalizing T-shirts with custom embroidery. Zazzle offers customers the option to add text and images to its range of T-shirts, with two printing options depending on the color of the fabric. [caption id="attachment_128690" align="aligncenter" width="725"] UNIQLO’S UTme! customized T-shirt service
Source: UNIQLO [/caption]  

• Sports shoes

Converse, New Balance, NIKE and Puma are leading customization in the sports shoe category. We see continued enthusiasm for the NIKEiD (also known as Nike By You), which launched initially in 1999. As of June 3, 2021, NIKEiD offers customization services on more than 100 sneaker styles and the service resonates strongly with its customers. NIKE’s subsidiary brand Converse also allows customization of more than 100 products. Following this lead, Puma and New Balance also offer customization in terms of color and design on many of their footwear items.

• Suits

While suits may have become less significant amid shifts to more casual workplace attire over the past few years in many countries, global suit sales are still growing and are set to reach $57.7 billion in 2021, up from $50.3 billion 2020, according to Euromonitor International. We expect this growth to boost the custom apparel market in 2021 as the made-to-measure model is prevalent in the suits category. To weather store closures and the dip in demand for suits during the pandemic, made-to-measure suit brands and retailers such as Alan David, Hockerty and Indochino launched virtual stylist services and promoted customized work-from-home outfits. 3. Customization Experiences Typically, apparel retailers and brands offer customization services as a standalone experience. In the next few years, we expect to see brands and retailers enhance apparel customization services by embedding them within experiential retail. For example:

• We see denim brand Levi’s Tailor Shop’s Connected Experience as an example of a shift toward integrating product customization into engaging experiences in the future. Connected Experience is a project that uses in-store technology to blur the line between digital and physical shopping experiences. The company improves consumer interaction through in-store iPads that host digital platforms with inspiration and information on the specific customization options available in the store. In addition, in Levi’s Tailor Shops, the retailer displays its tailoring equipment, custom fabrics and personalized garments to encourage customers to touch the fabrics and draw inspiration. Levi’s opened a new Next-Gen store at the Stanford Shopping Center in Palo Alto, California, in October 2020, featuring a Tailor Shop with a direct-to-garment printer and iPads interfaces that allow customers to customize T-shirts or jeans.

[caption id="attachment_128691" align="aligncenter" width="725"] Levi’s Tailor Shop in Palo Alto
Source: Levi’s [/caption]  

• Zara offers custom online and in-store embroidery services, with its offerings still evolving and some based on seasonal demand. In March 2019, Zara launched its EDITED collection, featuring denim jackets, jeans and shorts, as well as tote bags, and sweatshirts with six embroidery color options and two different fonts. In December 2019, Zara launched a new custom capsule collection, offering custom embellishments on a range of leather bags. We expect to see more retailers trial and launch custom apparel services in the future.

4. Technology Enhancements Apparel retailers and brands are working to improve production efficiency in product customization through investment in new technology and automation capabilities. We discuss two key technology drivers in the market.

• 3D Design and Printing

Customization efficiency presents a challenge for many retailers and we see 3D design and printing as a strong solution. Retailers such as Eloquii, Everlane and Under Armour have experimented with on-demand, 3D-designed and printed apparel and footwear. 3D design and printing techniques are increasingly being used to create custom product parts with fewer manufacturing constraints than traditional manufacturing techniques. Moreover, 3D design and printing saves reduces material waste and speeds up communication between designers, merchants and manufacturers.

• Automation

We are seeing apparel brands and retailers building strong automation capability for product customization. For example, Adidas management stated on its August 2020 earnings call that its Speedfactory centers use advanced automation technologies to eliminate the need for manual stitching and gluing—a move toward the automated production of sports shoes. The company is set to use more automation technology to reduce production lead times at its operations in Asia. We see automation as an important step in scaling customization services in the future. Adidas tested automation technology in its pop-up store in Berlin in 2017, which featured full-body scanners connected to knitting machines capable of producing a customize item within one hour. [caption id="attachment_128692" align="aligncenter" width="725"] Source: Adidas[/caption]   5. Price-Related Headwind  Without economies of scale, apparel brands and retailers typically charge higher prices for custom apparel products—for instance, Ralph Lauren typically charges a 15% premium on customized apparel—generatingsome uncertainty regarding consumers’ capacity and tolerance to pay a premium for custom items.Nevertheless, NIKE charges an average 20% premium on customized sneakers and receives strong feedback on the business according to the company—which it primarily attributes to consumer interest in unique customized sneakers. We find that the majority of apparel retailers and brands still use custom apparel as one strategy to attract customers, rather than taking a mass customization approach. This is primarily due to issues with scaling in customization, whereby customization costs need to offset the added charges to the retailer and limited options for mass production keep costs high. Apparel retailers and brands must position custom products at appropriate prices and conduct trial tests with customized offerings for hero products to establish a picture of the market response. [caption id="attachment_128693" align="aligncenter" width="725"] Premium By You Nike Air Max 95 sneakers with custom design options at $200 (Top) compared to Essential Nike Air Max 95 sneakers at $170 (bottom)
Source: NIKE [/caption]  

What We Think

Implications for Retailers and Brands 

• We see customization as an important part of the apparel market as it serves a growing consumer group that seek to showcase their individuality with personalized and unique apparel items. We expect custom apparel to gain traction in 2021 but remain outside of the mainstream.
• We identified four apparel categories at the forefront of apparel customization: denim, T-shirts, sports shoes and suits. Brands and retailers should look to capitalize on customization demand in these categories.
• We recommend that apparel retailers and brands with custom apparel businesses adopt automation and 3D design and printing techniques to facilitate faster production processes. We believe that the future of apparel customization for the retail industry will be consumer-centric, demand-driven and fueled by advances in technology.
• Apparel retailers and brands must position custom products at appropriate prices and conduct trial tests with customized offerings for hero products to establish a picture of the market response.

Implications for Technology Vendors 

• Technology vendors with automation and 3D design and printing solutions should seek opportunities to help apparel retailers and brands facilitate faster and more efficient production processes to drive down costs and lead times.