Segmentation

•  Euromonitor divides the United States denim market into four price segments: super-premium, premium, standard, and economy.
• The market can also be segmented based on end-user and age group.

Super-premium

• Super-premium jeans are priced $250+.
•  7 For All Mankind and True Religion are super-premium brands.
• According to Bernstein's research, over 70% of super-premium jeans are purchased by women.

Premium

• Premium jeans are priced between $75 and $250.
•  Diesel and Good American are premium denim brands.
• According to Bernstein's research, two-thirds of premium jeans are purchased by women.

Standard

•  Levi's and Wrangler are standard brands.
• Levi's are Wrangler typically priced at $50-$75.
• Over 70%--$4 billion out of 2018's revenue of $5.6 billion--of Levi's revenue comes from men.

Economy

•  Forever 21 and H&M are economy (or value) brands.
• The majority of Forever 21 and H&M jeans are priced at $20-$40.

• Forever 21 women's jean pricing:
• $0-10: 0.7% 
• $10-20: 6.8% 
• $20-30: 39.3% 
• $30-40: 35.5% 
• $40-50: 8.2% 
• $50-60: 6.3% 
• $60-70: 2.8% 

• H&M women's jeans pricing:
• $0-10: 3.2% 
• $10-20: 17.5% 
• $20-30: 37.7% 
• $30-40: 24.7% 
• $40-50: 13% 
• $50-60: 1.3% 
• $60-70: 2.6% 

Trends & Share

• The sales of super-premium and premium jeans have been slowing for some years and saw a sharp decline in 2018, although lesser than in 2017. On the other hand, the sales of economy and standard brands have grown.
• Economy and standard brands are innovating with denim's fit and fabric, which has reduced the difference in quality between super-premium and premium brands and economy and standard brands significantly.

• Global denim market share by segment in 2017:
• Super-premium: 14 billion (10.9%)
• Premium: 32 billion (25%)
• Standard: 44 billion (34.4%)
• Economy: 38 billion (29.7%)

Research Strategy

Introduction

Demand for Sustainable Production

• Younger generations, specifically Gen Z consumers are increasingly concerned with how their denim purchases impact the environment.  
• Thus, the industry is rising to create greater transparency around how denim is made.
• Young consumers are more likely to research brands and purchase those that meet their ethical demands, and denim brands are doubling down to make an effort to mirror consumer sensitivities.  
• Water saving and chemical free processes are in higher demand, with the likely use of laser and ozone technologies likely to increase in the denim industry in 2020.
•  Cotton farming techniques are also projected to shift in order to mirror mindful consumers' demands.

Upcycling & Second Hand

• Similar to the demand for sustainability, environmental values are increasing the demand for upcycled denim items as well as second hand and vintage denim.
• Jeans that have been redesigned from existing products, such as two-toned or fabric patched items are creative options the industry has incorporated to meet this demand.
•  Nostalgic styles are also mirroring the current desire to buy vintage denim from consignment shops and re-sale websites.
• Companies are also using a chemical process to dissolve old jeans at a cellular level and use it in production, as well as partnering with non-profits to purchase used clothing to be upcycled into denim products.
• It's projected that the 4 Rs, "repair, recycle, reuse and reduce" will continue to increase as a consumer trend in the denim space.

Leisure Focus

• During the peak of athleisure wear, around 2015-2016, denim sales declined, as fitness related pants became more popular casual wear items.
• However, jeans are currently re-emerging in popularity for casual wear, with jeans being the most popular type of bottomswear for running errands
• The denim industry is meeting this demand by understanding the new consumer desire for comfortable and authentically casual looking items, vs. factory-washed looks.
• Similarly, jeans that mirror vintage distressed jeans are most popular, as these have a casual look that mirrors the in demand leisure styles over less in demand formal styles.

Price Climb

• The price US consumers are willing to pay for a single denim item has increased in the past several years. 
• The price of men's jeans increased 28% in last quarter of 2019, to $210.86 per pair, and women's increased 10% to $165.44 per pair.

Denim Demand Varies by Gender

• Women currently buy more jeans than men in the US.
• This is contributed to an increased variance in styles by denim brands, who are stretching stylistically in order to find a place with athleisure consumers and compete with other fabrics.
• Men tend to have a different demand, preferring rugged wear and durable but casual denim items.
• The male denim segment is projected to grow by 4.77% in the next year.

In Store Preference

•  Store-based purchases of jeans continue to be more of the market than online or non-store based purchases.
• This is contributed to the demand for personalized experiences and desire to interact with physical items.
• However, the non-store-based denim segment is projected to grow by 5.3% in the US in the next year.

Research Strategy

Skinny Jeans Trend

• The skinny jeans silhouette is here to stay according to the fashion show runways. The 2020 skinny jeans trend includes belts with highwaisted skinny jeans.
•  Two examples of brands selling the skinny jeans trend are (1) Re/Done Originals Ultra High-Rise Ankle Crop Skinny Jeans ($239), and (2) NYDJ Ami Stretch Skinny Jeans ($109).
•  Two more examples of brands selling the skinny jeans trend are (3) Urban Outfitters BDG Vanya High-Waisted… $69, and (4) Urban Outfitters BDG Twig High-Waisted… $59.
• How people can wear the skinny jeans trend with other clothing was suggested by stylecaster.com. "Wear your favorite pair with a turtleneck and statement duster jacket in the winter and flow-y crop top in the spring."

Distressed and Ripped Jeans Trend

•  Ripped and distressed jeans will be popular in 2020.
•  Two examples of brands selling the ripped/distressed jeans trend are (1) Edwin Cai Classic Straight Jeans ($208), and (2) Levi's Wedgie Jeans ($33).
•  Two more examples of brands selling the ripped/distressed jeans trend are (3) Urban Outfitters BDG Vanya High-Waisted… $69, and (4) Urban Outfitters BDG Wilco Destroyed… $69.
•  Stylecaster.com suggested clothing to wear with ripped and distressed jeans would be "a sophisticated high-neck blouse or a polished blazer...."

Vintage Denim Trend

•  Fashion trend writers saw an "emphasis on vintage-looking denim on the S/S 20 runways."
•  Two examples of brands selling the vintage look in denim were (1) Citizens of Humanity Premium Vintage Campbell Relaxed High Rise Jeans ($308), and (2) Bldwn Vintage Straight Jeans ($238).
• Suggestions of clothing to wear with the vintage denim look included 1970s fashion items such as aviator glasses, fur vests, blouses with gathered sleeves, blouses with ruffled necklines, crochet tops, suede jackets, and wide brimmed hats.

Boot-Cut Jeans Trend

•  Fashion writers affirmed that boot-cut jeans are once again in style. Designers that showed boot-cut jeans at the runway shows included Celine, Marc Jacobs, and Gucci. The "leg-lengthening, flared denim silhouette" will be widely available.
•  Two examples of brands selling the boot-cut jeans silhouette are (1)Re/Done High Break Flared Jeans ($250) and (2) Agolde Vintage Flare Jeans ($188).
•  Two more examples of brands selling boot-cut jeans were (3) Citizens of Humanity Georgia Jean $148, and (4) Wrangler Exaggerated Bootcut Jean $119.
• A suggestion for how to wear the boot-cut jeans was made by Stylecaster.com: "[G]row your hair long and grab a poncho...."

Front Seams, Ribbing, and Pleats Trend

• The return of jeans with front seams, ribbing, and/or pleats was noticed by fashion writers who studied the S/S 20 runways. Visible seams are a trend for 2020.
• Two examples of brands selling jeans with front seams, ribbing, and or pleats were (1) Mother Superior the Springy Ankle Jeans ($258), and (2) Alice & Olivia Jalisa Trouser Jeans ($275).
•  Two more examples of brands selling jeans with front seams, ribbing, and/or pleats were (3) Mother Superior The Pleated Popular Peg… $238, and (4) One Teaspoon '80s High-Waisted Jean $148.
•  Suggestions for how to wear this style of denim included tucked-in chic blouses, graphic tees, and belts.

Short-length Jeans Trend

• Denim in Bermuda-length shorts, culottes, jean cut-offs, capris, and cropped wide-leg styles were seen on the runways.
•  Two examples of brands selling denim in shorter hemlines are (1) RE/DONE '60s Wide Leg $192, and (2) Wrangler High Rise Utility Crop Jean $50.
•  Two more examples of brands selling the shorter denim hemlines were (3) Celine Culotte B4 Rigid Indigo Denim ($890), and (4) BDG Denim High-Rise Bermuda Short ($30).
• A suggestion for how to wear the shorter hemline styles included pairing them with knee-high boots, mules, or strappy sandals, or with a navy blazer. 

Different Color Trends for Denim

• Some designers used non-blue colored denim in head-to-toe monochromatic looks. Balmain's collection of denim included yellow, pink, cobalt blue and Kelly green in S/S 20 jeans.
• Other designers who used non-blue colored denim for 2020 include (1) Isabel Marant with orange denim puffed sleeved blouse, matching jeans, and green denim cut-off shorts; (2) Chanel with red jeans; and (3) Alberta Ferretti with red and orange in tie-dyed denim overalls and boyfriend jeans.

Denim Purchasing Decisions

1. Price is not the main factor

• Price is not the main factor in the denim jeans purchase decision of consumers. This is true even among Gen Z shoppers who are a generation that spends the least on denim.
• According to Cotton Incorporated's Lifestyle Monitor Survey in 2013, only 58% of consumers say that price is an important factor in their denim purchases.

2. Fit and comfort are very important

• The 2013 Lifestyle Monitor Survey also reports that 75% of consumers say the fit is very important to their denim jean purchases while 68% of consumers say that comfort is very important. Consumers value fit and comfort over price.
• While in the 2019 Monitor Survey, it's revealed that it's now 98% of denim jeans consumers that say fit and comfort are important in their denim purchase decision.

3. Consumers value durability

• Consumers put great value on a product that will last longer and fit better. That's why they purchase denim jeans for their durability, longevity, and versatility.
• In 2013, 52% of consumers say that durability is important in their purchasing decision. That percentage rose to 89% in 2019. That doesn't mean though that they value as much the brand name.

4. Celebrities have the least influence

• According to a study conducted in 2013, celebrities have the least influence on teens and college students' purchasing decisions. But 34% of these consumers are influenced by the opinion of their friends while 15% are influenced by the opinion of their family.

5. Millennials consider the company behind the product

• Millennials don't simply look at the product without considering the values of the company behind it. Millennials value substance in such that they consider the product not in isolation to the motivations of the company.

• Millennials prefer a product experience that reflects or embodies their values. This could mean that they research the company first before buying since the process behind the production is of importance to them.