Every week, The Interline rounds up the most vital talking points from across the fashion technology landscape. We provide our take on what matters, and why. This roundup is also delivered to Interline Insiders by email. And, for the first time, this Roundup is available in audio format, setting the stage for upcoming multimedia content from The Interline.
On the cusp of reopening, retail needs platforms more than it needs floorplans.
Depending on where you are in the world, you might soon be able to step back into a clothing store – if you can’t already. Here in England, “non essential” retail is targeted for a mid-June green light from the government (guidelines differ elsewhere in the UK), while the USA proceeds on a state-by-state basis, and Chinese retail premises have been open for weeks – despite initial concerns about low shopper numbers.
But early indications suggest that lifting restrictions on movement and operations might not create the sort of sudden rebound that retailers are hoping for. While having retailers open their doors is likely to have a psychological impact – everyone, The Interline included, is hungry for a sense of normalcy – the evidence doesn’t seem to suggest that it’s going to translate into people buying clothes in-store. Or at least not immediately.
Yesterday’s analysis, by J.P.Morgan – who charted two possible courses for COVID-19 recovery in April – suggests that states where lockdown orders have been relaxed are leading those still under “shelter in place” restrictions in terms of in-person spending. But not by enough; spending in-stores is still well below pre-pandemic levels. By contrast, “card not present” spending, i.e. eCommerce, still exhibited year on year growth by the end of April.
The foremost casualties of what looks to be a durable shift towards online spending are, naturally, going to be those retailers for whom physical stores are essential. And at the risk of generalising, these are the big department stores that are wrestling with bankruptcies, lay-offs, and historic uncertainty.
To put it bluntly: in a time when spending in person is still depressed beyond any low watermark we have on record, floorspace is losing its value.
What this means for the mall concept – where square footage and footfall reign – remains to be seen. Obsolescence is definitely one possibility: half of all American malls are propped by wobbly pillars like J.C. Penney and Victoria’s Secret. Digital alternatives like the newly unveiled The Yes are a logical play. Marketplaces like Alibaba, which is actually offering to lend money to small brands, and the pervasive Amazon might wind up being the only game in town if they’re permitted to keep chomping down on power.
Even magazines are getting in on the act, with Vogue offering something of a guided tour – shoppable, of course – through a virtual Nordstrom.
But think of this from the small brand’s perspective. Put yourself in the shoes of a company with perhaps a couple of boutiques to its name, and a historical reliance on department store concessions for its other sales. The benefit equation has changed dramatically. Why spend on floorspace in a department store when its primary benefit – footfall you couldn’t get to your own small shops – is gone for an indeterminate period?
Instead, it makes sense to invest in your own routes to the consumer. After all, if even large retailers are going to be replacing volume with concentration – repurposing reservation apps originally designed for restaurants and beauty appointments is being mooted as a viable avenue – and consumers are looking to stores for a more intimate, human connection (as the CEO of Athleta suggests) then the power rightly belongs in the individual brand’s hands. Neither of those engagement strategies requires the use of a big intermediary.
The right partner for reopening, then, isn’t likely to be the one that controls the floorspace, but the one that holds the keys to turning technology to your advantage in the space you already have – online or off.
Bringing the connected store concept out of hibernation.
Connected stores are not a new idea, but they have assumed a new importance thanks to the coronavirus pandemic. Two years ago, the connected store concept grabbed a lot of attention by applying the principles of Internet of Things (IoT), computer vision, machine learning, and a host of other buzzword-ridden technologies to brick-and-mortar stores.
The technology itself was sound. Indeed, all of those individual pieces have had completely valid applications in retail – not least in Amazon’s “Just Walk Out” retail technology package. But at the time, connected stores, as a conglomerate of different technologies, seemed like a solution in search of a problem.
The Interline will admit to being skeptical of the idea when it was first promoted. And our reasoning was thus: figuring out the optimum time to restock racks, or knowing that a store fixture needed to be moved to improve visitor flow, was something that could be done perfectly well provided the manager of that particular shop was paying attention.
Today, though, those things are going to be essential – and they will need to be monitored at the whole-brand level for compliance with social distancing, hygiene, and other regulations. So it seems possible that COVID-19 could be just the catalyst the connected store concept needs – even if it was one that nobody saw coming.