There are early signs that "sweatpants nation" is shrinking as Americans emerge from lockdown, but it's unclear how far back to normal the pendulum will swing.

Why it matters: Retailers don't know whether the pandemic comfy era has forever changed what we want to wear. Billions of dollars worth of retail inventory is on the line.

How it works: What's on the racks in the summer and the fall months is planned months in advance.

• There's always some uncertainty — but this year is beyond the norms, Sarah Wyeth a retail analyst at S&P Global Ratings, tells Axios.
• "Is it going to be more athleisure? Is it going to be dressy? Is it going to be business formal, business casual?"

One sign of a shift already in motion: Urban Outfitters said at the end of February seven out of 10 of its top selling items were dresses for its Anthropologie brand.

• "Up until that point over the past year, we were lucky if [top selling items] included one or two dresses ... We're beginning to see what I'm calling go-out fashion start to take hold," CEO Richard Hayne said in early March.

Flashback: Last year, fashion seasons were essentially traded for the "pandemic season." Retailers reined in other inventory at the onset of the pandemic and raced to meet the demand for comfort.

• A similar pivot could happen if they suss out a bigger "dress up" thirst, though fast-fashion retailers will be more nimble here than others.

How it's playing out: Retailers have been "extraordinarily cautious" with buying loads of inventory in light of the uncertainty, Jan Kniffen, a retail consultant to investment firms, tells Axios.

• "What that means is the consumer is going to go out to buy stuff that ain't there sometimes," Kniffen says.
• And there might be fewer deals, since the retailer won't have to use discounts to sell-through excess inventory.

Factors at play: The pace of vaccinations and the economic reopening. Both will lead people to do and socialize more — and potentially buy more clothes for the occasion.

• Plus: The sustained economic recovery (which has been uneven) propelling people to shop.

What's next: Winners of "the comfy era" are trying to keep their stronghold.

• "When [customers] shift back to more casual wear, they are going to be looking unique and different ... and some of the team is creating and building that," Lululemon's CEO Calvin McDonald told Wall Street last week.

The bottom line: "I think we're going to see a real trend toward Great Gatsby-ism," Kniffen says.

• "It will be a more casual dress up than 10 or 15 years ago — but it's still gonna be a hell of a lot dressier than it was for the last year."