In this global context characterised by economic slowdown, also the fashion industry is suffering with a drop-off in revenue between -27 and -30% and with a forecasted return to pre-pandemic levels only during the second half of 2022, beginning of 2023. There are however significant differences: China and Asia will experience a quicker recovery, while in Europe and the USA it will be slower.
Growing concern among consumers is the price that is being paid: between growing unemployment numbers, an immense demand for unemployment benefits, and uncertainties about the future, many of them expect to cut back on the number of purchases they make (75% in Europe and the USA) and in any case favour purchases that are more “conservative”, with a preference for goods that are long-lasting. At the same time, social distancing has accelerated the trend of digitalisation even among generations that are less digitally addicted like the Millennials and Generation Z, thus providing a big boost to e-commerce: according to McKinsey, platforms have grown between +5% and +55% in key markets, and in Italy, in the month of February alone, there was a +81% rise in transactions.
Likewise in crisis is also the model of globalisation: there is a return to values like nationalism, protectionism, and even localism, and a return to the short supply chain that promotes local productions, which at the same time are also more sustainable. Sustainability has become a key factor for consumers who are urging companies to become more responsible, ethical, inclusive, and attentive to the environment and to climatic change.
In this scenario, over the course of the webinar “Fashion markets, shifts and strategies”, Maria Eugenia Errobidarte pointed to five strategies that fashion brands must focus on in order to intercept consumers in the fashion industry:
We are witnessing a rise in the demand for products related to hygiene, health, medicine and in general well-being. At the same time, we are spending more time at home, where more physical activity is being undertaken in order to remain in shape, even at an age that might seem surprising, as with the 55-75 age bracket.
Among the brands that have known how to interpret this trend are: Target, with an inclusive sportswear proposal; Foot Balance, which makes custom insoles for shoes; and Adidas e-play connected sneakers that are able to combine physical performance with digital, thanks to the sole with integrated chip.
The current economic slowdown is pushing us towards purchases that are more cost-conscious and frugal, in search of products that are not only essential and functional but also sustainable. At the same time, second-hand goods are becoming increasingly important (during the pandemic the rise in demand for them grew by +150%): Farfetch, for example, allows you to free yourself of unwanted garments on its platform, while Revivo has successfully launched a site for second-hand shoes that are reconditioned.
Because of the restrictions placed on travel, we are shopping from our homes more often and once again starting to promote local products. It is an important trend that supports local artisans and focuses on quality, while promoting the idea of a slow product with a number of examples provided by the following brands: Selfridges London presents local brands to UK clientele; Marrakshi presents a concept of slow, non-seasonal, fashion; Song for the Mute is a chain that focuses on local artisanal products; and Shakudo sells footwear and accessories made in Lagos-Nigeria using local techniques and processes, while promoting a sense of community.
When Covid is finally over, there will be a strong desire to go out, once again start travelling, and surround ourselves with nature. Even the changes in work hours and workplace arrangements, with the introduction of smart working, will have an impact on fashion purchases. Products for urban travel will be favoured, while reinforcing the leisure-workwear trend with a focus on comfort, and there will also be a return to nature.
Among the brands that have already intercepted this trend are: The North Face, which launched an urban outdoor line inspired by the mountain office; Columbia, which produced a fabric that reflects light to guarantee maximum freshness even in the hottest climates; and Tibi, with its line of versatile apparel that adapts to both business and sportswear.
The lines dividing physical from digital will increasingly be blurred and products will be increasingly immersed in these two channels. This mix will allow for hyper-personalised solutions to be offered, while allowing new purchasing formats to emerge. Two luxury brands provide some examples of this as follows: Burberry with its development of 3D designs, and Gucci, which in collaboration with the GreenCookies gaming agency allows the avatars of its games to wear the brand’s clothing. There is then Nike, which allows its Air Max sneakers to be personalised with the possibility of virtually trying them on through your smartphone.
And for retail? Maria Eugenia Errobidarte in the webinar “2020 Retail Update” identifies three trends in the creation of new spaces and formats.
Designing for distance
Way is made for omnichannel strategies that are combined to create a “phygital” experience. One example is Philips people counts which has put a traffic light system in place to manage entries into the store; while Cuyana in Miami prefers to not display all the products in the store at once, so that a larger and more hygienic area is made available to customers. There is then the beauty brand Dr. Jart in Seoul, which has installed air shower booths to sterilize the inside of the store.
In terms of digital channels, consumers expect increasingly personalised products, services that cut back on the decisional process and models that quickly create a bridge between supply and demand at the absolute best price. We Chat offers a service that transmits the promotional messages of brands to the smartphones of those passing by; Endurance Styling Service recommends matching items to go with already selected clothing items; Squatted allows you to share information on products with your friends and receive their feedback; and Ikea has a digital influencer who allows you to experience second-hand a virtual in-store experience.
This trend intercepts the desire of consumers to escape, a desire for messages that amplify positivity, while introducing playful and out-of-the-ordinary elements and enjoying experiences first-hand, rather than simply being satisfied with a hurried purchase. Among the examples are that of Burberry, which promotes interaction between physical and virtual spaces; the rental services campaign of Inventory Pooling; while The Commons of Bangkok offers consumers the possibility to reacquire outdoor spaces, creating a bona fide oasis for relaxation.
Replying to the demand of 83% of consumers for a more equal society, this trend promotes local and smaller-scale retail, where themes like inclusivity and sustainability are in a primary position of importance. Examples are provided by Patagonia, which closed its stores during election day to support active participation in elections; Nike that promotes workshops with local artists; Primark that presents products “designed for sustainability”; StockX, the sneaker resale platform where consumers can do business at lower prices but with maximum quality; and Project Earth of Selfridges that offers a rental and reparation service and which, in collaboration with Prada, recovers nylon.