There are only a few fashion capitals in the world, and they all paint a stark picture for the future of retail worldwide. From New York, London, and Paris to Milan and Tokyo, retailers are searching for relevance as consumers learn to live with the reality of Covid-19.
Whether reeling from a pandemic-induced slump or ramping up for a recovery, fashion retailers face a new set of consumer sensitivities and preferences. Everyday moments such as visiting the local mall, dining inside restaurants, socializing over coffee and heading to the gym no longer seem as safe as they did a few months ago. And this new reality is compelling shoppers to favor value over luxury, personal health over entertainment and homebody lifestyles over out-of-home activities.
[callout]Nontraditional fashion business models may be creating new alternatives to brick-and-mortar stores. However, they do not necessarily get to the heart of what consumers need right now.[/callout]
The full impact of Covid-19 remains to be seen. Yet, the past six months are shedding light on the need to reinvent the entire fashion retail industry. Brands may not be able to go back and make a new start, but they can undoubtedly deliver what their consumers need to come back again.
It\’s Time to Mix Things Up
Nontraditional fashion business models – such as subscription rentals, curated boxes, and digital-only niche startups – may be creating new alternatives to brick-and-mortar stores. However, they do not necessarily get to the heart of what consumers need right now.
According to McKinsey & Company, in most countries, more than 70 percent of consumers are not yet comfortable with leaving home and resuming their pre-pandemic social activities. This finding indicates that few people are willing to justify the purchase of high-end shoes, dry-clean-only clothing and fine jewelry. Instead, they will most likely gravitate toward comfort, practicality and convenience.
Breaking through this new market dynamic requires more than offering the right price at the right time. Fashion retailers also need to redesign their supply chains to ensure that the right assortments are available at e-commerce and the brick-and-mortar store. Consumers will not merely look for a similar alternative if a desired product is not available on the digital and physical store shelf. Instead, they will tap, swipe and click their way to a competing brand that carries it.
Let\’s face it: if your favorite Levi\’s are not available, would you merely purchase the next-best brand at the same store? Of course not! You\’re going someplace else until you find those Levi\’s, even if they cost more. And more likely, you\’ll return to that new retailer first when you are ready to purchase a new pair.
Reinvention Begins with Responsive Inventory Management
So, how can fashion brands ensure they always have relevant products on hand? While it\’s true that supply chains are still at risk, they can get ahead of disrupted inventory availability by engaging directly with consumers to find out what they want, even if they are not spending.
Such a relationship must be built in an authentic way that matches the brand and resonates with existing and potential shoppers without being intrusive. Messaging is key: Retailers may choose to communicate on their branded website, through social channels or in an e-mail why it\’s safe to shop online and how the health and safety of warehouse workers are assured. They may even spark honest conversation around the comfort and joy that a seemingly frivolous purchase brings at a time of uncertainty and turbulence.
The idea is to provide a source of connectedness that consumers desire, while the fashion brand understands consumers more intimately and forges an engaged and loyal community. With this insight, retailers can quickly assess their entire inventory – both in season and out of season – to make decisions based on timing and relevance, category by category.
This exercise may mean delaying the availability of spring and summer fashions for the next year or repurposing them for the upcoming fall transition or winter seasons. Some products may also be sold in flash sales during the holidays to improve the company\’s cash position. Meanwhile, orders for new items can be readjusted to address expected shifts in style preferences.
A Renaissance (not an Apocalypse) Is Rising
As much as news headlines like to declare that retail will undergo a devastating apocalypse, I believe that fashion retail is undergoing a renaissance that centers around customer wants and experiences.
Old, well-loved brick-and-mortar brands may be consolidating under different names or disappearing altogether. But fashion retailers that choose to invite input from consumers and let that insight inform and direct their inventory decisions will be the ones that will profitably become part of long-lasting shifts in the industry.