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Great Weight Loss Result. Unrecognizable Fit Black Lady Showing Abdominal Muscles And Flat Belly Wearing Old Oversized Jeans After Successful Slimming Indoor. Cropped Shot<\/span><\/p>\n getty<\/small><\/div>\n<\/div>\n<\/figure>\n Ozempic and other GLP-1 drugs are starting to have a positive impact on Americans\u2019 weight, leading to a shift in demand for smaller clothing sizes. However, U.S. retailers are unprepared for the change, suggests a new study from Impact Analytics<\/a>. Retailers could take up to a $5 billion margin hit by 2027, resulting from a misalignment in size demand and increased clothing returns. <\/p>\n \u201cOzempic is upending America\u2019s size curve in retail time \u2013 and traditional retail industry planning processes are not ready,\u201d warned Prashant Agrawal, Impact Analytics CEO. \u201cOur data shows billions of dollars in retail margins for inventory are at risk unless brands start planning for the shopper of 2027, instead of the shopper of 2022.\u201d <\/p>\n On the flip side, weight loss often leads consumers to reward themselves with new clothing purchases, sometimes even buying entirely new wardrobes. This will be good news for fashion retailers\u2019 topline results, but as Agrawal warns, retailers need to plan for the downward sizing shift to protect their bottom lines.<\/p>\n Based on the latest data, a JAMA study found<\/a> that obesity rates started to retreat slightly in 2023, after steadily rising from 2013 to 2021 and plateauing in 2022. The decline in BMI was most notable in the South region, where the dispensing rate of GLP-1 medications is highest. There also was a modest decline in obesity among GenZ consumers, aged 18 to 25 years. <\/p>\n As the Trump administration\u2019s MAHA movement, spearheaded by Health and Human Services Secretary Robert F. Kennedy Jr., fights the upstream causes of obesity, the shrinking of the American consumer will continue to pick up steam. In turn, the fashion industry could experience even greater downstream disruption in the years ahead. <\/p>\n Following a downsizing trend it observed in New York City early last year, Impact Analytics identified that up to 400 million apparel units could be misaligned with nationwide consumer demand by 2027, particularly if the use of GLP-1 medications, such as Ozempic, Mounjaro and Wegovy, increases from its current 6% rate to 8%. <\/p>\n \u201cThe rise of GLP-1 is collapsing traditional demand patterns at a speed retailers have never experienced before,\u201d Agrawal said. <\/p>\n In the analysis of aggregated point-of-sale and returns data from major U.S. fashion retailers, including both brick-and-mortar and online retailers, it found that sales of larger apparel sizes (L, XL, XXL) fell and sales of small sizes increased from 2022 to 2024.<\/p>\n Specifically, these fashion items experienced a downward sizing shift over the past two years:<\/p>\n Despite the two-year percentage shifts being small, the trend is expected to intensify through 2027, resulting in rising return rates and higher markdown pressure as working capital is tied up in unsellable large sizes.<\/p>\n Along with the shift toward smaller sizes, the study also identified an uptick in fit-related returns over the two-year study period. Return rates were highest for women\u2019s bottoms, which increased from 12% of units to 15%, followed by a one-percentage-point increase in returns for men\u2019s tops.<\/p>\n Returns are a perennial problem for retailers \u2013 one that cost the retail industry $890 billion in 2024, according to the National Retail Federation<\/a>. Clothing is among the top categories for returns.<\/p>\n \u201cFit has always been the top driver of apparel returns, and GLP-1 use is amplifying the trend,\u201d shared ReturnPro CEO Sender Shamiss. \u201cAs body sizes change quickly, shoppers are less certain about fit and more likely to bracket their purchases, i.e. buying multiple sizes and returning what doesn\u2019t work. That uncertainty is pushing return rates higher, especially in categories like denim and dresses where sizing is less forgiving.\u201d<\/p>\n The practice of bracketing is particularly pervasive among high-income consumers \u2013 just the ones most likely to be able to afford GLP-1 medications for weight loss, which generally isn\u2019t covered by insurance for that purpose \u2013 suggests a recent Bank of America Institute <\/a>study. <\/p>\n BoA analyzed transaction data from U.S. credit and debit card holders and found that higher-income consumers make returns to department stores at about twice the rate of lower-income shoppers. High-income shoppers return 20% of their department store spending as compared with 11% for low-income shoppers. While clothing isn\u2019t all that department stores sell, they certainly sell a lot. <\/p>\n Impact Analytics suggests that retailers should use fit-related returns as a leading key-performance-indicator to signal the direction and pace of change. It also advises retailers to adjust their planning models away from traditional ones that assume slow change based on five-year averages to a half-year, even quarterly schedule to recalibrate sizing curves in real time. It also stresses the need to plan sizes by region, rather than relying upon national averages.<\/p>\nChanges Starting To Show<\/h2>\n
Changing Sizes In Real Time<\/h2>\n
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Returns Are The Canary In The Coal Mine<\/h2>\n
Recalibrate Now<\/h2>\n