Every week, The Interline rounds up the most vital and interesting 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.
Fashion hits pause as COVID-19 continues to hold the world hostage.
When The Interline started, just a few weeks ago, the world was a very different place. Never in our lifetimes did we imagine we’d spend our first month’s worth of news roundups charting the fashion industry as it ground to a halt.
But here we are. In the last week of March 2020. And not only are the high streets closed, but eCommerce channels might be about to follow them.
Most garments, footwear, and accessories are made offshore, so supply chain disruption was the first place we saw the impact of the Coronavirus outbreak manifest itself. Then physical shops were shuttered due to social distancing rules, as the pandemic reached consumers’ shores. Now a confluence of circumstances is leading some eCommerce outlets to close as well.
This was only really a matter of time. In-country warehouses, fulfilment centres, and distribution hubs can only run for so long on a skeleton staff, and as COVID-19 (the disease the Coronavirus causes) spreads and governments coordinate relief packages to try and compensate for lost income, more and more people are staying at home to look after children whose schools have been closed, or choosing not to work so they avoid exposing themselves to the virus, or infecting others. Or, chillingly but obviously, they’re unable to work because they are getting ill. Some, no doubt, are dying – especially since the largest retail distributor of all is coming under fire for apparently failing to provide its pickers, packers, and delivery teams with proper protection, and keeping them in the dark when COVID-19 cases are identified. And added wage incentives for risk-taking aren’t likely to make much of a difference to the way workers feel about putting themselves in harm’s way.
This would have been a catastrophic outcome at the best of times, but it also came directly after the worst February for retail sales in seven years here in the UK. So it’s not as though businesses were going into this with particularly rosy balance sheets. However you slice it, the evaporation of physical and online sales was going to sting in a way the industry hadn’t felt since perhaps the second World War.
Yesterday, Drapers ran an exhaustive, must-read survey of UK fashion retailers and found that things look, unsurprisingly, pretty bad. Only a slim majority of the retailers they spoke to had come this far without cutting staff, and an even slimmer one felt they could carry on without lay-offs being on the agenda.
And this is despite the UK government implementing a social safety net and job retention scheme so generous that, for anyone familiar with normal Conservative policy, it seemed to come from another planet.
But as today’s news demonstrates, even that may not be enough. Primark – among other retailers and hospitality companies – has announced that it will not pay rent on those stores it does not own, from next week onwards. This is not an experimental strategy or a game – the company more than likely just doesn’t have the money to pay its business rates and make payroll next month.
This reveals just how much of fashion – and, to be clear, business in general – runs on a knife edge – even for companies we normally think of as resilient. A couple of months ago, Primark’s holding company declaring that it had £800 million in free cash reserves would have been a positive thing. In the face of £650 million in lost sales in a single month, it looks like loose change.
Nike suggest that online orders are making up for lost in-store sales, at least in China. But The Interline is not convinced that this trend will be applicable to other businesses. Those retailers who do manage to keep inventory flowing will eventually run out of stock to sell, and as that same Drapers research shows, only about half of suppliers are still taking the orders that would replenish or refresh online channels. Needless to say, retailers like Primark are no longer placing orders anyway.
Frustratingly, this is not a problem technology can solve. The Interline wishes it was. Instead, it’s an economic marble run where every tilt of the board seems to lead forever down, terminating in one fresh trap or another.
In the USA, retail directly employs about 30 million people. Today, a record 3 million people filed for unemployment benefits in America. And that’s not a figure that’s going to improve any time soon, despite a staggering economic stimulus package passing the Senate. The longer this drags on, the worse it’s going to get.
Rushing into resuscitating the economy, though, is not a viable answer. As we’ve already established (and as common sense should tell us) stores, distribution centres, and delivery networks can’t be operated by the sick and the dying. To be a little glib: that demographic doesn’t buy a lot of clothes either.
And neither, of course, will history forgive us for putting profit before people – something fashion brands who remember the “sweatshop” revolving door of public shame already know. According to American billionaire Mark Cuban, the way brands react in the current crisis is going to define them for potentially decades. Expect the current (and rightful) scrutiny being applied to public officials the world over to be turned to corporations in very short order once the crisis is contained.
The Interline wrote last week about the potential for the pandemic to either undo sustainability or knit it together more closely than ever, where we highlighted some of the remarkable social good that has come from fashion in the last few weeks. This is an angle that Sarah Mower of Vogue ran with this week in a big way, saying that she hopes: “this spontaneous surge of human spirit, practicality and creativity will grow strongly enough, for long enough, to turn fashion’s priorities around.”
Judging from Giorgio Armani’s growing largesse, which is emblematic of a much larger charitable movement from brands and retailers in every country, there’s reason to be hopeful.
There is, in the starkest possible sense, a war going on. And we have the relative luxury of sitting behind the frontlines and debating what’s going to happen afterwards. From that privileged perspective, the strongest words of encouragement The Interline can give are these:
Fashion will still be around when the fight is over. And when that time does come, those brands and retailers who have put thought and effort into what it means to reach people – whether it’s with inventive products, digital transformation and engagement strategies, fair and equitable supply chain practices, or philanthropy – will be the ones we remember.
Emergency manufacturing demonstrates how innovation can move us from push to pull.
The old adage that necessity is the mother of invention is getting good mileage this week. In response to the spiralling demand for personal protective equipment (PPE) for doctors, nurses, and healthcare staff, and a looming, catastrophic shortage of ventilators (machines that breathe for patients who can no longer breathe for themselves) manufacturers and inventors from across the world – including the fashion sector – have rushed to find new solutions to satisfy a seemingly impossible demand.
In fashion, brands like Prada, Balenciaga, and YSL have repurposed manufacturing facilities to make surgical masks for people on the frontline in healthcare. While UK technology company Dyson is gearing up to switch some of its production lines to make 10,000 new ventilators.
And that’s not even the truly inventive part: 3D printing is opening the doors for massive corporations, design agencies, and independent hobbyists and printers to produce everything from face shields and life-saving ventilator valves to door handle attachments designed to minimise the spread of the virus.
From the crowdsourced to the assembly-line-made, this is all a testament to both human ingenuity and to manufacturers’ ability to – when called upon – flip their model from supply-demand to demand-supply.
Of course, garment and footwear production is not a matter of life and death, but nevertheless the conversation around moving from an inventory-driven model to a consumer-driven one has been ongoing for some time. Evidence today suggests that this is possible – and in fact The Interline would argue it’s going to become necessary sooner rather than later. Look for more on this when we dive into Factories of the Future on a micro and industrial scale this summer.
Social media marketing wilts under social distancing. Technology could provide a workaround.
Working from home, The Interline has stayed in touch with friends and colleagues via different communications and social media services – as, we’re sure, has almost everyone reading this roundup.
In those circumstances, you’d expect social media to be the most successful channel for fashion brands and retailers to reach consumers under lockdown. But in practice, advertising spend on Twitter (arguably one of the most successful platforms for brand engagement under normal circumstances) is likely to drop as advertisers reconsider what it means to promote social engagement in a time of social distancing, and when the only real conversation to join is primarily occupied with death tolls.
A similar trend is also threatening the livelihoods of fashion influencers (an industry that was once predicted to be worth more than $5 billion in the neat two years) on Instagram. While you might expect influencers to be able to offer some light relief from the crisis, and some sense of continuity for their followers, the reality is that very few own their own studios, and most rely on either renting locations or shooting in the cities they call home. Neither of these options are available to them today.
Much of the allure of influencer marketing comes from its promise of a snapshot of a life that’s at once aspirational and relatable. Los Angeles, New York, London, Paris – these are the backdrops for photoshoots that are so artfully curated they look spontaneous. So where does influencer marketing go when it can’t go outside?
One answer would be for influencer managers and production facilities to borrow the latest in inventive VFX technology from movie-making, where small physical sets can be seamlessly blended with virtual backdrops in real-time, with no effects pipeline in post-production.
Interestingly, this technique uses the off-the-shelf, free-to-use Unreal Engine 4, which has long since migrated from being a game engine to powering 3D product and store visualisation for fashion, retail, and a host of other industries.
The Interline will be turning its editorial focus to the marketing and visualisation side of 3D in May, after our detailed examination of technical 3D next month.