Fashion retail has never faced anything like the current crisis. In the space of a couple of weeks, supply chains have snapped, shops have been shuttered, warehouses and distribution centres have been stripped back to run on a skeleton staff, and consumer spending on relative luxuries like fashion has slowed to a trickle. “Unprecedented” is an over-used word, but more than anything fashion retail is today squaring up to a future that nobody can predict.
In the face of all that, data could offer some degree of certainty, so The Interline sat down – virtually – with Kayla Marci, who is a Market Analyst working on the “Retail Decision Platform” EDITED. We wanted to find out just how far that certainty could go at the most uncertain moment in most of our lifetimes.
The Interline: It’s impossible to talk about retail today without starting with what’s happening outside our windows. What’s your perspective on how the coronavirus outbreak is affecting the downstream side of retail? We’ve seen store closures around the world, which is the most obvious manifestation, but do you have any insight into the scale of all this and how it’s affecting other channels?
Kayla Marci: The coronavirus has in some way affected every point of the fashion industry’s critical path. As bricks-and-mortar sales will take a hit due to closure during the outbreak, online purchasing is expected to boom with consumers on lockdown shopping out of boredom. This means retailers will need to focus on reworking their ecomm experiences to tailor to consumers updated needs. We’ve seen examples of this with businesses providing free shipping, prolonged return periods and kerbside pickups. While sourcing new products is becoming increasingly difficult as factories are quarantined, there is still consumer demand. One of the biggest challenges retailers will face is creating an aura of newness and keeping customers enticed while operating on a lot less stock and constant disruption.
The Interline: How are multi-channel retailers responding? It seems as though the obvious thing to do would be to try and translate as much of the previously in-person experience as possible to digital. Is there any particular retailer you see as a model for doing this right?
Kayla Marci: The outbreak has shone a light on further opportunities for digital services and AR within retail to enhance the customer experience. Fitting and styling sessions have been popular while stores are closed with retailers such as Taking Shape and DVF offering this service. Earlier examples of AR that will be looked on during this time include Oliver Peoples creating an option for customers to virtually try frames at Instagram Checkout before purchasing and ASOS’s AR tool that allows customers to see a product on 16 different sizes and body types.
The focus on digital has allowed retailers to experiment not just with recreating in-person experiences but on entertaining consumers – something that wasn’t previously used as much from an ecomm angle. Retailers are also getting creative using mobile and digital platforms to engage with new user bases, unlocking a new social era. Bottega Veneta, for instance, just launched the Bottega Residency platform to feature musicians, writers and performers as a creative outlet for viewers during self-isolation. Fashion brands have been slow to get involved in the TikTok movement. However, we are now seeing them experiment with content not just to sell to the consumers but to keep them updated and engaged.
These examples have all allowed retailers to take this time to build a stronger brand community by engaging with their audience. Creating these experiences and how brands’ have interacted with consumers during this time will play a pivotal role in the customers’ loyalty to the brand in the future. Digital and AR will continue to be commonplace in the COVID-19 era during future fashion weeks with greater usage of virtual showrooms and live streaming.
The Interline: How about the upstream side? Supply chains were stretched and fragile before the crisis, and we imagine they’re approaching breaking point now. What can retailers do to try and coordinate their international operations at the moment?
Kayla Marci: This is difficult to answer due to the current state of the industry amidst coronavirus. As the outbreak has somewhat subsided in China, production has started to pick up again. However, now COVID-19 is hitting the hardest in France, Italy and the United States. Overseas demand has dropped and retailers are canceling and postponing orders. Additionally, it’s been reported that fashion retailers are canceling nearly $1.5 billion in orders from Bangladesh, which could impact 1.2 million workers. While the future performance of the market is in flux, retailers need to tighten their operations while maintaining a good supplier relationship to keep processes agile after the virus lessens. Successful retailers are going to be the ones who can quickly downsize their orders and upshift when the markets recover. Be transparent and where possible, spread the risk and consider domestic or local suppliers.
The Interline: Let’s talk about data. It’s no exaggeration to say that we’re living through the most uncertain time in at least a generation – professionally and personally – but fashion and retail have steadily been moving away from intuition to become more data-led. It feels like today certainty is one of the hottest commodities out there, so our readers will be keen to get your take on how data can help brands and retailer make informed decisions at a difficult time.
Kayla Marci: As there’s currently no end date for this pandemic, retailers need to start thinking about contingency plans and create scalable processes to minimise the damage of future disruptions. Using A.I. and data, the EDITED Retail Decision Platform uncovers the true needs of local markets to help make the process of tightening operations clearer, giving businesses a 360 view of their market with access to over 90,000 brands and retailers online.
During these times of uncertainty, it’s even more crucial for retailers to get their assortments and pricing strategies right. The wrong decision can severely impact the survival of a retailer or brand during and post COVID-19. EDITED allows retailers to drill down on granular information to analyse the performance of a market, competitor or category, giving businesses the power to adjust their assortments in real-time in line with industry trends. Additionally, EDITED can help retailers monitor the level of discounting within the market. This information can validate retailers’ decisions against unnecessary price cuts that could damage margin.
The Interline: Thinking more specifically about the source of data, we wanted to get your perspective on the difference between historical analysis and real-time, responsive modelling. We hate to keep coming back to the same point, but it feels as though the current situation has underlined the idea that we can’t rely on past data to help us predict the future. Are we now in uncharted-enough waters that only real-time analysis of information can actually be useful for decision-making?
Kayla Marci: Both real-time data with historical analysis play a pivotal role in future planning. If an incident like COVID-19 were to happen again, it’s going to be the retailers with historical data at their fingertips that will prevail. They have insight into what strategies worked and didn’t work from a product, pricing and promotional perspective. This information, combined with real-time analytics, will allow retailers to be proactive in planning their future strategies as well as stay reactive to disruption within the industry.
The Interline: To end on a more positive note, what steps can retailers and brands take to reach out to their customers and be looked upon fondly once this is all behind us? We know a lot of companies are socially active, giving to charity and even repurposing their manufacturing facilities to make hand sanitiser for healthcare. But on the other hand, we’ve also seen companies put in place strategies or promotions that feel in bad taste at the moment. Is this another area that businesses could use data to gauge consumer sentiment and come out ahead of the competition in less tangible areas?
Kayla Marci: The most prominent themes we have seen from retailers during this time have had a positive spin as businesses are trying to uplift and inspire their consumers during these uncertain times.
Sensitivity needs to be front of mind, and the retailers who have done this well are those that have been inclusive. For example, acknowledging that not everyone has the opportunity to work remotely, particularly healthcare workers dealing with the virus first hand. Additionally, retailers that have been running promotions and donating to charities instead of capitalising on the boost of online shopping are looked upon favourably.
It’s been crucial that brands remain transparent with their consumers – communicating how their business has been impacted from trading hours to delays with shipping, as well as the treatment of their bricks-and-mortar staff.
Categories that have prevailed during this time include loungewear, as there is a significant focus on cozy dressing to be worn around the house as well as activewear as retailers share exercises to be done at home. Wellness remains another focal point as retailers encourage customers to use this time for self-care and share tips on managing stress and anxiety during isolation.
