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Why fashion retail needs to back up outward optimism with operational excellence. And how technology can help.
This week, optimism seems to be the operative word. Irrespective of your political persuasion, there’s little doubt that the resolution of the US election has steered the global ship a little further in the direction of stability. And of course the prospect of COVID-19 vaccinations beginning at the end of this year or early next – at least for those on the frontline, or those who face heightened risk – has lightened the mood almost everywhere.
From a broad, geopolitical, perspective, there’s reason to believe that 2021 could look a lot better than 2020 has.
And that same positive outlook has been reflected in numerous fashion and retail stories this week. In China, singles day sales were up 26% year-on-year by volume. In the West, Amazon is confident in its ability to cope with surges in demand, and is currently testing changes to make sure that price-gouging and panic buying are minimised during the winter – even if there’s every indication that retail is better-prepared to weather a second lockdown period, provided it isn’t too protracted. Nobody wants to return to the months of toilet paper shortage, after all.
Even high street retail here in the UK, where footfall is down 75% and the British Retail Consortium is predicting gloom in the form of up to £2 billion in lost holiday season sales, is not subject to the same restrictions that it was during the first lockdown in March and April. Right now, fashion retail premises are closed for browsing in England, but are able to offer click-and-collect or kerbside pickup services, meaning that even independent retailers – which felt the sting of the first lockdown particularly strongly – could stand up to this second period of restrictions, provided they have been able to shift some portion of their business online. Those that have done so are also likely to have been the same retailers that have figured out how to reach their customers online – rather than just selling to them that way. And this distinction will become especially pronounced if more restrictive rules are put in place in the UK and Europe before the end of the year.
(It’s important to note that we are unlikely to see further restrictions on movement and trade in China, but current COVID trends in America suggest that a change in leadership in the US may lead to restrictions being enforced in early 2021, by which point the same forces are likely to apply, with companies that boast online sales and engagement channels being well-positioned to survive a short or longer-running shutdown.)
And positivity is also evident at the higher end of fashion. Burberry may have seen revenue fall, but its sales saw growth last month, according to figures the brand released yesterday. Of course, the week’s major commercial news was the sale of Supreme to VF Corporation, which amounted to a $2.1 billion power move that’s actually just the latest in a series of big investments being made in what remains a time of crisis. And the latest analysis by Lyst suggests that consumer appetite for new fashions remains high across the price and brand spectrum, adding credence to the idea that, while a lot of us have settled for leisurewear over the last eight months, there is much pent-up demand for styles we actively want other people to see.
At the same time, marketplaces like ASOS are removing barriers to allow third-party sellers and emerging designers to sell through their storefronts throughout the holidays with zero commission.
Things are, broadly speaking, looking up. Consumer demand appears to be returning, brands and retailers are better prepared than ever to reach consumers digitally, and the potential for a robust retail recovery in 2021 has increased.
This optimism, though, leads to problems of its own. While so much of this year has been about survival – and indeed that scrabble to stay in business has driven a lot of rapid digitisation – the coming year shifts the emphasis towards excellence. And when the pandemic does finally abate, whether it’s through collective action, science, or a combination of both, shoppers are likely to be less forgiving of shortfalls in any of the following areas.
Physical retail premises remain uncertain prospects. Depending on the timeline for mass vaccination, The Interline suspects that consumers will either return to using stores the way they did before, or that their role will change to being brand experience centres, or click-and-collect fulfilment locations. In both cases, though, digital excellence will be expected: allocation, replenishment, and assortment-planning strategies and solutions will need to be in place; and for experience centres to achieve their goal, the customer journey will need to be seamless.
For online channels and storefronts, the challenge will be to replicate – or enhance – the physical shopping experience. On top of the difficult tasks of unifying social media and commerce ecosystems – something that Western countries continue to struggle with – retailers and direct to consumer brands will also need to rapidly scale their use of 3D assets and virtual photography, to allow shoppers to assess and interact with products as tangibly as possible online.
At the same time, it will be more vital than ever for retailers to know what to stock, and what to make. Predictive planning, algorithmic trend analysis, and automated market and consumer testing solutions will become essential – either a stopgap on the road to truly on-demand production, or as a permanent solution to the perennial problems of overstock, markdowns, and miscalibration between consumer expectations and finished products.
All of these are challenges that The Interline will be analysing in our final editorial focus of 2020, when we turn to unified retail and eCommerce excellence from mid-November until the end of the calendar year. Look for interview, op-eds, and several exclusive collaborations that present practical guidance, expert analysis, and more as we move towards what we all hope will be a better year, but a year that will demand digital transformation either way.