COVID-19 has resulted in a devastating economic impact, especially on the fashion and retail industry. Among the worst hit sectors, the retail industry is adapting itself in real time, to face drastically changing consumer behaviour and demands. The domino effects of the pandemic have further forced retailers and brands to announce delays in new stock arrivals and supply chain issues.
The entire situation calls for a change in the way the industry has been functioning so far, and a big shift has been underway with three groups of industry professionals issuing open letters to address – how the fashion calendar operates, sustainability, and discounting shifts within the industry.
A ‘reset and rethink’ approach has been called upon by designers to showcase fashion collections twice a year, allowing trends to be revealed closer to the season in order to optimise sell-outs and preserve brand margins.
In another move on the part of BFC and CFDA – two of fashion’s biggest trade groups, a joint manifesto stating the same, in addition to hosting virtual presentations, was released.
While luxury is somewhat handcuffed in responding to overarching market shifts, brands and labels are growing with the flow by coming up with new strategies in terms of stock, discounting, deliveries, and consumer engagement. Despite the fact that new arrivals across categories were down Y-o-Y ever since the virus took its toll, high sell-out rates for certain categories picked up during the lockdown.
With Work From Home (WFH) gaining worldwide popularity, office dressing has transitioned into more casual styles hailing a new category of ‘homewear’/loungewear. The rise of zoom meetings has resulted in tops outperforming bottoms categories Y-o-Y on a global scale. The closure of gyms and parks has given rise to at-home virtual workouts which has resulted in a spike in demand for the activewear category, and with majority of countries around the world requiring people to cover their faces while out in public spaces, face masks have become the Holy Grail to help brands stay afloat.
Apparel Resources analyses how COVID-19 has forced the retail calendar to change, the product categories to pay attention to, where consumer spending currently lies, and the direction it will take post-pandemic.
Home is where the $ is
The popularity of homewear/loungewear is far from over. As many companies plan to make WFH compulsory for several days a week, comfortable fabrics and casualwear will be in demand even in the post-pandemic phase. Additionally, rising levels of unemployment will see a huge number of consumers spending more time indoors, further fuelling this trend.
Ascertaining the same, Umashan Naidoo, Head of Customer and Cosmetics, Westside – A Tata Enterprise, said, “After being home for more than 3 months, people have definitely reconnected with comfort and are looking for essential clothing and products. The pandemic brought with it a new trend in the fashion industry, dubbed ‘WFH Style’ – we saw a rise in categories that support this trend when we opened our stores. We also noticed an increase in the sales of essential clothing such as loungewear and nightwear. The kidswear category has also seen a spike in sales. Since people are getting more time to focus on their health, our activewear brand has also been a favourite.”
“In the stores, we saw a trend in the sale of Westside Home products. Currently, home decor has been given equal importance as loungewear. Customers want to make sure that the background during zoom calls are perfect and have also started setting up their home offices or even chill corners with beautiful pieces of soft furnishings, cushions, décor products, and plants.” – Umashan Naidoo
In keeping with the market demand, many brands and labels have been quick to jump on to the homewear bandwagon. Many brands have extended their lines into new home or sleep collections with easy extensions from their existing product mix. For instance, Biba released a homewear collection with kaftans and sleep robes. Both H&M and Zara introduced home products such as easy shirts, comfortable dresses, and lounge sets. FabAlley upped its offering of casual loungewear to include pyjama sets, comfortable jersey bottoms – clothes which serve the dual purpose of lounging around in the day and double up as nightwear.
Commenting on the same, Manoshi Kamdar Kothari, Founder and Creative Director of Aara Inc., a creative fashion consultancy, said, “Many brands in India, have impulsively released work from home/loungewear capsule collections. In case the brand didn’t release a new product line, they were sure to remarket their existing relevant products to push them as loungewear.”
“Traditionally speaking, our wardrobe consisted of occasion-based ensembles such as ‘going out’, ‘work’, ‘party’, etc. The lockdown has mixed all these independent occasions into one giving impetus to homewear/loungewear which fuses all of these different characteristics into one new category which has currently fulfilled all the requirements of a consumer.” – Manoshi Kamdar Kothari
Assortment calendar and planning
Most brands prefer to work a season in advance – a practice that has caused the industry to suffer huge losses during this period calling for a radical change in how assortment calendars are planned. The intent is to amend and align the seasonal shopping and fashion calendars together.
FabAlley is amongst the few retailers who are in a much better position as compared to their counterparts – owing to its business acumen.
Contrary to traditional brands, FabAlley doesn’t follow the 6-month calendar or plan its collections one season in advance. Being a fast fashion brand, it tends to work within the season. This attribute allowed the retailer to shift gears in time to manoeuvre its collections in accordance with demand.
“We have been working with smaller lots ever since we started out and this has allowed us to have lower lead times. Between shifting some of our lines to the Autumn/Winter season and liquidating via our online channels, we have been able to manage inventory losses,” said Tanvi Malik, Co-founder of FabAlley, adding, “We have been fortunate to have not had to cancel a lot of orders. Many of our products that were planned for the second half of Spring/Summer have already been shifted to Autumn/Winter and the other good thing is that online has started performing really well.”
“The good thing is that even though the consumer is looking for more discounts, the demand is there and as long as you are able to offer a good price, albeit a slightly more discounted price, online will continue to perform well.” – Tanvi Malik
In times of an industry crisis, nailing your assortment is crucial. The wrong investment or deadstock can seriously deter a retailer or brand’s ability to stay afloat. While the future performance of the market is uncertain, brands and retailers need to downsize by cancelling unnecessary orders, and be quick to change gears when the markets recover.
Commenting on the same, Manoshi said, “Retailers should be extremely tight with their numbers moving forward and should work a bit closer to the season to accurately predict demand and place orders. Focus should be placed on high performing categories with a tight option plan and lean depth. With more sales moving online, merchandise should be chosen carefully so as to be able to perform well if the customer is not able to feel or try the product. The approach should be totally data-driven with focus on what the consumer wants.”
A sound example of the same can be found in FabAlley’s case which has been able to accommodate its existing S/S collection into favourable pieces for A/W.
The retailer is working with three types of themes, namely –
First, summer prints and summer silhouettes – which comprise its current online offering. Post lockdown, many of its physical stores have resumed operations and during the peak summer, these styles followed standard retail format till they eventually moved into EOS July sales.
The second type comprises agnostic print and summer silhouettes – under this theme, the retailer is working with prints such as polka dots or stripes or a dark floral or geometric print based on FabAlley’s in-house trend forecast which predicts certain prints that would work for two seasons.
These are available with the retailer in-house as fabric inventory and are quickly being converted into longer sleeves and hemlines to suit the approaching A/W season rather than strappy sleeves intended for summer.
The third category comprises a theme wherein both the print and silhouette are season-agnostic – these are products for which quantities have been ordered and these can easily shift to A/W.
Also Read: Reaching out to customers in the new normal
Prints and colours
Colours and prints have been known to have a direct impact on our moods and surroundings. Florals, soothing pastels, Pantone colour of the year – Classic Blue for its calming effect; minimal aesthetics that imbibe a clutter-free and chaos-free vibe have never made more sense than now when the world is in dire need of such emotions – these are some of the themes that have been observed to be working well with consumers during this period of uncertainty.
Tapping on the same, Westside came up with its latest campaign titled ‘Mood Lifting Brights’. The campaign focuses on collections which are bright, feature geometric patterns, stripes, block prints, or slogan prints. “During the lockdown, we noticed that our consumers were opting for casual clothing which are a mix of bright and pastel colours. We also see this trend branch out into self-pampering, extending itself as key spends in self-care essentials and bath and body or fragrances,” Umashan corroborated.
Pre-COVID, minimalism was already poised for a comeback and hints of the same were visible in Daniel Lee’s appointment at Bottega Veneta and also in the rise of Scandi style influences. Furthermore, minimalism supports the cause of sustainability by promoting timeless fashion.
It is prudent to keep in mind that during this period when consumers have lesser disposable incomes, they will be looking for classics that can be worn over a longer period of time in multifarious ways and settings.
Supporting the same, Tanvi said, “My advice to other retailers and brands is to really look at investing and putting your assets into products that are going to be durable, stylish, and timeless, rather than trend-centric.”
Offline retail has been accounting for almost 90 per cent of overall retail in the country and around 94-95 per cent in fashion alone.
Retail spaces are being reimagined in light of the ongoing pandemic where reopening physical stores has to take into account various factors such as proper and frequent sanitisation, in-store social distancing and hygiene norms, temperature checks of staff, etc.
In such a scenario, it is imperative to mention the opportunity for retailers and brands to look at in the online space.
“We have been on the fence of being an online adoption country for a couple of years now, and this is something that has been in the pipeline. COVID-19 has just accelerated this into acceptance. This is a wake-up call for retailers who have been more offline-centric, to shift to the digital age,” Tanvi stated.
Due to the pandemic, consumers are going for various e-commerce platforms to meet their demands and are looking for new shopping experiences through technology. The transformation into a digital world will be faster than we have imagined.
Commenting on the same, Umashan said, “Many brands are opting for touchless shopping experiences, but we at Westside feel otherwise. We believe that the customers need to experience the material, fit, feel and look of any garment before purchasing. Therefore, we are doing our best to retain the joys of shopping people enjoyed before social distancing was imposed.”
Keeping all these factors in mind, it’s important to mention that in no way does this period signal that the ship has sunk for retail – in fact it signals quite the opposite. It is a time for the industry to rethink and restrategise by adopting the online route more prudently, re-engage with its consumers, be it via offering more discounts or faster deliveries with lesser discounts, revamping their communication strategy, and being quick to alter their existing and future assortments in tune with current market demand.
With deliveries opening up and lockdown restrictions easing, the market is already showing positive signs of improvement and with all these factors implemented, one can expect the industry to come out of this temporary setback by Q3 of this financial year.
Also Read: Re-accelerating retail to quick recovery