Framing the Future of Fashion Industry

The changing consumer behaviour has caused a drastic shift in the fashion retail industry. Prior to the lockdown, 80 per cent of the consumers said they were most likely to purchase online, 74 per cent felt comfortable with online shopping and 41 per cent of consumers preferred store shopping,  as per a privately conducted research. 

52 per cent of consumers still find it difficult to rebuild the trust and enter the stores and stroll the aisles, as they fear the baseline sanitary measures are being followed. While, 39 per cent feel transparency of safety and protocol is critical to feeling comfortable.

Younger consumers are some of the most powerful influencers and their use of social media plays a large part in enabling customers to share experiences that credit these brands. In addition, their reliance on ratings and review content only highlights the enormous opportunity brands have to use the voice of the customer to create more meaningful shopper experiences, which ultimately results in more sales and customer loyalty even during this rapid digital evolution.

Retailers and brands need to make decisions following consumers’ priorities over the coming months and ensure they provide store and product information that instills confidence in shoppers. As consumers return in-store, the use of technology to connect online and offline and provide shoppers with product information before they visit will be important. An omni-channel approach not only enables a stronger connection with consumers but also creates a seamless experience.

Consumers today are looking for ways to safeguard their health and that of those around them. With facemasks becoming the must-have accessory of the year, we expect to see even more emphasis on sustainable, ethical, and socially conscious wardrobes in the future.

When it comes to fashion marketing, leveraging ad creative that helps consumers understand what a brand is doing to promote global health, safety, and sustainable practices is a big step in the right direction.

Fashion retailers closed the 2020-21 with a 40-45 per cent decline in revenues, while there was a three times surge in online fashion sales.

India’s lockdown affected several retailers, but those in the apparel business saw a severe slump in demand as stay-at-home consumers felt little need for formal and occasion wear. Lockdown and, later, restrictions on store operations crushed the summer season sales.

Retailers are scrambling to adapt; they recognise the global response to the novel Covid-19 virus will have a significant impact on their business. 

Only 7-8 per cent of the retail industry is functioning at the moment, as the retailers are selling only essential items. The coronavirus also presents fashion with a chance to reset and completely reshape the industry’s value chain. 

We expect that themes of digital acceleration, discounting, industry consolidation, and corporate innovation will be prioritized once the immediate crisis subsides. Even after witnessing waves of insolvencies, industry leaders will need to get comfortable with uncertainty and ramp up their future-proofing efforts as the potential for further outbreaks and lockdowns loom.

Navigating this uncertainty will not be easy for fashion leaders. Players need to be decisive and start putting recovery strategies into motion to emerge with renewed energy. The crisis is a catalyst that will shock the industry into change, now is the time to get ready for a post-coronavirus world.

Recovery from the pandemic will coincide with a recessionary market, compelling fashion players to ramp up resilience planning and adapt their operating models. Companies surviving the immediate crisis will have made bold and rapid interventions to stabilise their core business before seeking out new markets, strategic opportunities, and future pockets of growth in a global fashion industry undergoing a dramatic transformation.

As deep discounting plagues retailers for the remainder of 2020, a decade-long build-up of bargain shopping culture will be exacerbated by a rise in anti-consumerism, a glut in inventory and cash-strapped consumers looking to trade down or turn to off-price channels. To reach increasingly frugal and disillusioned consumers, brands must find inventive ways to regain value and rethink their broader business mission.

Social distancing has highlighted the importance of digital channels more than ever and lockdowns have elevated digital as an urgent priority across the entire value chain but, unless companies scale up and strengthen their digital capabilities in the recovery phase of the crisis, they will suffer in the longer term. Consumers will continue to demand more in this space and brands must act fast to deliver.

A significant drop in consumer spending on apparel will result in massive inventory build-ups.

However, consumers are increasingly embracing digital solutions for shopping, entertainment, and communications thanks to the response of brands and retailers who quickly enhanced their digital capabilities by launching or improving innovative new channels.

Since digital channels can be less profitable than physical retail, players need to establish a balanced model that prioritises digital growth in an integrated way with cutting-edge customer experience. In many ways, the coronavirus pandemic is the first global crisis that will deeply impact the fashion retail sector since the industry morphed into a virtual oligopoly. However, in the aftermath of a crisis, resilient players can outperform rivals. Power can be consolidated as previously held market share is freed up once competitors fall away. Companies must strategically think about their future now. This includes identifying financial leverage, divestitures, acquisition opportunities, and strategic partners, increasing earnings, and creating operational and financial stability early in the recession.

To cope with new restrictions, mitigate the damaging impact of the pandemic and adapt to economic and consumer shifts, companies must introduce new tools and strategies across the value chain to future-proof their business models. Fashion players must harness these innovations and scale up those that work to make radical and enduring changes to their organisations — and the wider industry — after the dust settles.

Necessity is the mother of invention. The coronavirus has sent shockwaves through the fashion industry, forcing companies to rapidly dispense with age-old industry practices and create new ones just to stay afloat. In doing so, it has exposed long-overdue upgrades required by a fashion system that is ripe for disruption. Quick moves to halt production, close stores, find alternative revenue streams, and identify new ways of working.

Some technologies that had been slow to take hold — think virtual fashion shows and digital showrooms, sample sign-offs in sourcing offices, livestream commerce, and the latest 3D design tools — are now being relied upon to get business done. As soon as the immediate firefighting subsides, brands should identify where to focus their attention and make longer-term innovation investments. Technologies and processes successfully implemented during the crisis will have a profound effect on the industry’s future. With time, shoppers and business leaders will become acquainted with the benefits of new practices.

The author is Creative Head & Owner - Pink Peacock Couture 

 DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.