Diet pills like Wegovy have some retailers scrambling to meet demand in smaller sizes.
Rent the Runway, a clothing rental subscription service, has seen the small-size trend firsthand. CEO and co-founder Jennifer Hyman told wall street journal More customers are moving to smaller sizes than at any time in the past 15 years. Hyman said the company caters specifically to women who may change clothing sizes.
“As a company, we’ve spent years perfecting our fit algorithms to ensure women who are gaining or losing weight can find the perfect size,” Hyman told wealth in an email.
A study from Impact Analytics, which uses artificial intelligence tools to help retailers make inventory decisions, found on Monday that demand for smaller sizes is surging in some areas. Sales of button-down shirts in women’s small sizes (XXS, XS and S) are up 12% this year compared with 2022. About 11% of the impacts were analyzed through a study of nearby retailers on Manhattan’s Upper East Side.
“America’s downsizing will have a huge impact on retailers, who could lose approximately $20 million annually due to incorrect scale curves,” Impact Analytics CEO Prashant Agrawal said in a statement.
The shift toward smaller clothing sizes is also starting to impact how retailers view their inventory, according to a report from Impact Analytics. Impact Analytics writes that retailers have been sticking to a strict set of sizes for years, which doesn’t necessarily meet consumer preferences and can lead to missed sales and losses. The spread of GLP-1, which is used to treat diabetes but can also trigger weight loss, is making the problem worse and could leave 10% of inventory unsold at the end of the year if retailers don’t adapt.
For retailers whose margins are already tight, sizing inaccuracies are a headache and can lead to missed sales when customers can’t find the size they need. According to the impact analysis, forecasting and making the right purchasing decisions is critical as retailers begin planning and can purchase inventory approximately a year in advance. According to retail analysts IHL Group, retailers lose $1 trillion a year simply by not offering the sizes customers want.
Impact Analytics writes: “Let’s be honest: In a market where precision and adaptability are paramount, failure to accommodate dramatic changes in body size could spell financial disaster for fashion retailers.”
Listening to consumer preferences is especially important for an industry that has seen stagnant sales figures in recent months. Sales at U.S. clothing and clothing accessory stores have remained steady at just under $26 billion per month since January, according to the Census Bureau.
Demand for Wegovy and other weight loss pills surges
The U.S. Food and Drug Administration approved Novo Nordisk’s Wegovy as a weight-loss drug in 2021; since then, demand for it and similar drugs has surged. An estimated 15.5 million people in the United States, or about 6% of adults, have used GLP-1 injections, according to a May Gallup survey. According to Gallup, the groups most likely to use these drugs are women, people with insurance and seniors between the ages of 40 and 64.
Impact Analytics says retailers that target groups more likely to use GLP-1, such as women or those with higher incomes, will be more vulnerable to changes in size preferences. However, such consumers are also more likely to engage in “revenge shopping” after losing weight, which may also provide opportunities for retailers.
Wegovy’s impact on clothing size preferences may still increase in the future, as outsized demand leads to shortages of this and other similar drugs. Last month, telemedicine company Ro launched a free tool that helps track pharmacies’ GLP-1 doses through user input. Within three weeks, users sent 35,000 submissions, notifying the tracker that a pharmacy did not have the GLP-1 drug the user was looking for. These submissions far outnumber the 1,500 submissions users sent over the same period to notify trackers that GLP-1 was in stock. The company said it receives hundreds of shortage applications every day.
