Why Summer Promotions Could Boost Apparel's Recovery

Forbes

08-07-2025

The constant ebb and flow of tariffs in the news cycle has created a hyper-aware consumer who is ultra-sensitive to the effects that pricing changes may have on their wallet. This mindset represents a marked shift from earlier in the year, when tariffs were just hitting the headlines and many consumers remained unaware of potential implications. In fact, as of May, 71% of U.S. households expect tariffs to drive up prices — which is up 12 points from January, according to data and technology company Circana.
(Photo by HENRY NICHOLLS / AFP) (Photo by HENRY NICHOLLS/AFP via Getty Images)
When it comes to clothing, this heightened awareness can lead to a whole host of behavioral shifts. In the first quarter of this year, two-thirds of consumers said they would either trade down, delay, or altogether skip their apparel purchase due to potential price increases from tariffs. While price increases are nothing new in the apparel industry — in fact, prices have been increasing for the past three years — what was once a tolerance for price increases is transforming, and consumer behavior is changing along with it.
From Want to Need: The Behavioral Shift
So, why is it that consumers are expecting to change their apparel shopping behavior now, when they've been feeling price pressures for the past few years? The answer lies in evolving consumer needs. In the one to two years following the COVID-19 pandemic, consumers ravenously replenished their wardrobes. It happened in waves that aligned with consumers' needs: first it was the basics like bras and underwear, next activewear, and then swimwear and tailored pieces. When inflation hit consumers' wallets, they didn't have to trade down in apparel and hunt for promotions because they had recently replenished their wardrobes. They either bought something if they wanted it, or they didn't buy at all.
What's different now is the replenishment cycle has gone full circle and the 'need' factor has returned. Consumers have gone a few years without replenishing some of their must-have items, causing a fundamental change in shopping behavior. The shift from "want" to "need" is causing more of a focus on price.
The Summer Promotional Opportunity
As we enter the season of summer promotions across retail, apparel has the chance to be one of the better performing categories. Industries like beauty and tech often dominate during these timeframes as consumers pinpoint specific deals for desired items. However, we may see more of an opportunity for apparel as consumers wait until the price is right, or at least more desirable, to replenish basics, activewear, or other put-off categories.
We have been seeing a bit of a shift toward promotions in recent weeks. In the 13 weeks ending May 31, the average promotional depth in apparel remained relatively flat, but the sales of promoted items grew by 2%, compared to last year, outpacing sales of full-price items.
We are seeing sales of promotional items increase for replenishment categories like underwear, sweatshirts, and sleepwear. These upcoming promotional weeks remain an opportunity for seasonal apparel. "Buy now, wear now" has shifted to "need now, buy now," which not only aligns with weather needs, but lifestyle needs as well. Consumers shopping for an upcoming vacation may buy swimwear a week before, as opposed to the month before.
Kids' apparel, especially, is experiencing increased sales of promotional apparel, with boys' and girls' promotional apparel up 16% and 9%, respectively. This presents a significant opportunity for retailers to highlight seasonal apparel and even get ahead of some back-to-school needs.
The Innovation Imperative
While the opportunity remains, it wasn't too long ago that the apparel industry found itself all too reliant on promotions to move sales. Consumers played promotional chicken with retailers, waiting out for those steep discounts. While promotions will play a role the back half of 2025, it is imperative that the industry doesn't fall into a discount loophole.
The challenge for apparel brands and retailers is striking the right balance: meeting consumers' heightened price sensitivity while maintaining the innovation and newness that drives long-term category growth. Those who can navigate this delicate balance will be best positioned to capture the tariff-aware consumer's attention and wallet share in the months ahead.