The lockdown had a direct and resounding impact on physical retail, with significant losses in terms of revenue, but at the same time it accelerated the growth of online commerce, changing the way purchases are made by consumers. With the re-openings, stores have had to adapt to new safety standards and social distancing, while also having to manage a season, summer 2020, that presented itself to the public with timing that had been completely thrown off. All of this while consumers were going through a profound transformation with regards to their needs and visions of reality, which will also undoubtedly have an impact on long-term choices.
“First off, in our 250 stores present in Italy, we applied all the safety measures requested by the national and regional competent authorities, starting from the training of personnel in stores with special programmes and digital training courses, applying the rules with social distancing measures, while asking our customers to follow hygiene guidelines so they can enter the store. We also have international guidelines in this regard. The Bata Group, in fact, serves more than 1 million customers a day in over 5300 stores worldwide”, explains Claudio Alessi (Bata).
Attention to safety is also confirmed by Nino Scaffidi (Killin), who comments: “We respected with maximum attention and rigor the decrees issued by the Government, with one-way paths and dedicated entrances in our stores, while providing all the safety material needed. In some cases, we even went beyond current legislation, for example, by offering free protective masks to customers wishing to enter the store, who did not have them. This is all in line with our company policy, which has always been oriented towards offering clientele maximum service”.
Always in the period immediately following the re-opening of stores, distribution had to manage SS2020 collections already present in stores, and in general, it was necessary to rethink clearance sales strategies and orders for new winter proposals. In Germany, already at the end of April, the HDS/L Federal Association of German Footwear and Leather Goods Industry, in accordance with some large German purchasing groups, proposed postponing the seasonal calendar by four weeks, extending the period of summer sales to the end of July and delaying winter deliveries, thereby resulting in the rescheduling of presentations in the showroom and at fairs.
This past May, also in Italy, the State-Regions Conference declared, for the entire national territory, the postponement of summer clearance sales to 1 August, even if some Italian regions have decided to allow stores to start applying discounts and promotions already in the month of July.
This was a choice made, for example, by the region of Sicily, where Killin Spa is located, allowing the company to start offering discounts as of July: “In my opinion, delaying clearance sales would have given more breathing room to the summer season, which most assuredly suffered during the period of forced store closings – comments Nino Scaffidi. Nevertheless, we must not forget that the overall policy of clearance sales must be managed with careful deliberation and with respect for the consumer. In fact, it’s important to remember that apparel and footwear have quite different profit margins: as far as footwear is concerned, excessive discounts superior to 50 percent are unthinkable in the presence of prices that have already been adjusted. Our policy has always been that of offering our customers products with the right quality/price ratio and reasonable, yet genuine, discounts during the periods of promotion”.
Another aspect that distribution must consider more than ever before is the attentive management of orders and development of collections, with a strict control of pricing policies, to avoid large leftover quantities of stock that remain unsold in warehouses.
“At the moment, we have not overturned our pricing policies, because there is no need. We are in any case developing a plan of promotional initiatives to sell out items from certain categories, so that we can cut back on certain kinds of stock we no longer want to promote during the summer season”, confirms Claudio Alessi (Bata).
Nino Scaffidi (Killin) is of a similar opinion and declares: “Now, more than ever before, it is important to make careful decisions. As far as continuative products are concerned, we will try to use those already present in the warehouse, while for new orders, we will focus our attention on newer products, not only in terms of fashion trends, but also those that are more innovative and technological, offering materials and technologies oriented towards comfort and the well-being of the foot”.
Another thing that must be considered is that consumers of all ages, during the long period of lockdown, were forced to use digital channels to purchase staple goods and other kinds of goods, and among these was also included apparel and accessories. This kind of “familiarization” with online purchases has created profound cultural changes, which will undoubtedly lead to growth for e-commerce and the need of distribution to increasingly integrate offline and online channels, while developing omnichannels, until potentially arriving at initiatives like the virtual fitting room and 3D Avatars.
“In this final period of lockdown for physical stores, e-commerce represented one of the only sources of revenue for the company – confirms Claudio Alessi (Bata) – and so at a strategic level, we focused on improving the ‘customer experience’ on our bata.it website, as well as on a customer service that is increasingly focused on the end customer. The project of integration between the online and offline channel began quite a few years ago, when projects of digitalisation still seemed extremely challenging. Now, every initiative that we develop is created with a view to the omnichannel. We have numerous services in this regard, like Bata Finder and Click&Collect (which allows for free in-store exchanges for goods acquired online), while a short while ago, we inaugurated the possibility of making reservations for in-store visits in a simple, fast, and completely free way through our website, allowing customers to avoid lines, but also decide if they would like to be directly
followed by one of our personal shoppers while they are in the store”.
Nino Scaffidi (Killin) confirms that integration between online and offline will be especially important in the years to come: “Online sales were already going through a period of growth in recent years, but without a doubt the phase of lockdown accelerated this trend. In the future, we will try to increase our online commerce, which today represents an exceedingly small percentage of our revenue, connected to sales through our platform and through Amazon. In any case, I believe that now more than ever before customer service is the factor that will make the difference in the future in terms of growth and customer loyalty. This means professionalism by sales personnel, post-sales service, and a serious offering”.
Finally, another thing to consider is that the Covid experience has led to profound changes in the purchasing choices of consumers, who are more attentive not only to the quality/price ratio as a consequence of this period of on-going economic difficulty, but also inclined to purchase products conceived to last over time, instead of those that tend to wear out over the course of one season. Likewise, comfort will be an important variable in purchasing decisions.
“In the period immediately following the lockdown in our stores in Sicily, Calabria, and Malta, slippers for the home were our number-one selling item, but also slip-ons for the seaside and sports-related items – confirms Nino Scaffidi (Killin). Without a doubt, comfort will be one of the most important factors in purchasing choices, but it is also important to consider that the upheaval created by Covid will lead to greater attentiveness to the quality of what we are buying and the potential use of the footwear. Probably, fewer purchases will be made, but with greater care and closer to real everyday needs”.
This is also confirmed by Claudio Alessi (Bata): “Customers search for quality in products, but also pay attention to price and promotions. Without a doubt, there is now also a lot of attention on hygiene standards, so our standards, which were already high, have been adapted to satisfy present-day needs. We also see that since we reopened on 18 May, customers like to compare and receive assistance in their purchasing choices by our personnel, but above all they desire to see and ‘touch with their hand’ the product, so they can make the right choice”.
What is the best way for distribution to recover quickly and more strongly from this troubled period?
“In the era of fast fashion, where everything moves quickly, this slowdown dictated by processes could help us to find greater creative momentum, while dedicating even greater attention to the needs of our customers”, is the message of Claudio Alessi from Bata.
For Nino Scaffidi (Killin), instead, the answer lies in staying committed to customers and instilling a rapport of trust with them, a formula that has been rewarding this company with positive numbers since 1986.