How Off-Price Came To Dominate Retail Apparel

Apparel shoppers are bargain hunting like never before.

According to a new report by The NPD Group, two-thirds of all retail apparel shoppers are making their purchases at off-price retailers, like Marshalls or T.J.Maxx.

“Off-price retailers are resonating with fashion- and cost-conscious consumers alike and are stealing department store business for good reason,” Marshal Cohen, The NPD Group’s chief industry analyst, said in a statement. “Off-price is second only to the online channel in terms of growth rate.”

These consumers are “not a particularly loyal group,” according to the report, as they often shop at multiple off-price retailers at a time, continually searching for the best deals on discounted apparel. More than half of them are 45 or above, according to the study, while millennials only make up 16 percent of this demographic.

“Consumers are clearly looking for better deals, and they know, if they shop at an off-price retailer, they will get them,” according to Cohen. “Apparel shoppers are finding just what they want at off-price retailers, at the right time and at the right price, and that isn’t always the case with department stores.”

Off-price sales grew 4 percent through April of this year compared to last year’s sales, according to the report.

The shift toward off-price retailing is also causing more and more brands and retailers to open outlet stores as a way to offer off-price items to customers. Macy’s and Kohl’s have both experimented with the off-price sales model in the past year or so, and the trend has also forced Gap to expand its outlet stores, even in the face of closing down some of its regular stores, according to Retail Dive.

More and more consumers are on the hunt for bargains like never before, and it appears that many retailers and brands are becoming increasingly eager to give them the deals they are after.