Every week, The Interline rounds up the most vital talking points from across the landscape of fashion technology news. This roundup is also delivered to Interline Insiders by email.
At what point do fashion retail’s peaks and troughs tip over into permanent change?
Calling this an unstable time for fashion retail would be putting it mildly. In the same period that UK clothing sales statistics were released for the whole of 2020 (they’re not good, with the largest drop in overall fashion sales in more than 20 years) and new research suggests that the UK alone will see 200,000 retail job lost this year, Shopify emerged with the claim of being the second-largest online retailer, and independent analysts suggested that Amazon added another 30 million Prime customers in 2020.
There is, of course, some logic to this see-saw of success. Online sales are booming, predicted to reach the $5 trillion mark in 2021, while footfall to physical stores is dramatically down, and is likely to remain that way for at least the first quarter of the year in countries under lockdown – including The Interline‘s home country of the UK – and potentially well into the first half.
This is not news, but in many ways the lack of novelty in these contrasting figures is a story in and of itself. Because at what point does the industry accept that what seemed like short-term disruption has, in fact, tipped over into being irreversible change?
Consider the changes being wrought on the retail workforce. Predictions from prior to the holiday 2020 season suggested that recruitment drives for packing, shipping, and production were for temporary positions, with the expectation that post-Christmas things would begin to stabilise, and those new hires could be either let go, or brought over to more traditional front-of-house retail roles.
As anyone in the UK or Europe right now knows, though, that is very unlikely to have happened. Anyone brought on to fulfill what was expected to be a peak in seasonal demand, in an eCommerce or eCommerce-adjacent role has probably been retained in that position, since online sales do not look to be dwindling any time soon. And delivery is, it goes without saying, an even larger employment sector than it had already become pre-pandemic.
And even if we cast our net wider, and start looking into the second half of 2021, we see that – as we’ve already suggested in previous roundups this year – significant bets are being made on the likelihood of the channel blend between online and offline remaining permanently tilted.
Rapidly-growing online luxury retailer Mytheresa experienced an extremely bouyant IPO this week, with its initial public listing valuing the company at around $3 billion US. And it’s important to note that, unlike some other top-performing eCommerce stocks from the last twelve months, Mytheresa is not much of a technology company. Compared to a company like Amazon or Stitch Fix, it’s a pure-play e-tailer.
The same can also be said for secondary market StockX, which has ridden the sneaker and streetwear boom (which is in the spotlight again this week after America’s presidential inauguration) to a high valuation that analysts believe have it positioned for its own public offering soon. StockX is an online marketplace first and foremost, without a technology trojan horse lurking in the background. And if last week’s IPO of secondary market Poshmark is anything to go by, StockX investors could expect significant returns in very short order.
(It should be noted that Poshmark is more of a technology company, since its resale platform is also something of a social network.)
This week’s incremental unveiling of YouTube’s new shoppable video tools also lend further weight to the idea that multi-channel consumer engagement strategies are, in a lot of cases, going to lead towards online points of sale.
And retail itself is just one of several areas that have undergone major re-evaluations of how 2021 will look in terms of in-person experience and engagement. Two major fashion and textile shows scheduled for this year have now been pushed back into 2022, along with landmark live entertainment events like Glastonbury, which prompts two questions: what takes their place in 2021, and when the two worlds collide next year, will we find ourselves wondering whether the online option isn’t just more practical, safer, and more sustainable than the one built on international travel?
The supply chain, too, is not safe from this sort of large-scale redefinition; Salomon revealed this week that it was picking up the near-shore and on-shore automated production baton from Adidas, whose “speedfactories” ended up having quite a short shelflife. And based on conversations that The Interline has been part of towards the end of 2020, and in the early part of this year, a new model of technology-centric production – one that lends itself perfectly to online-first sales – is destined to become viable and accessible very soon.
What does this mean for technology investment? More than likely it will follow a similar trend to recruitment: investments in the backend systems that fuel digital product creation, smart manufacturing, and other elements of operational digitisation that were seen as short-term coping strategies could become the cornerstones of long-term stability and growth. And if budgets need to be repurposed from front-end brick-and-mortar experiences and innovations, then that may just have to be the price that multi-channel organisations pay to keep up with the way the retail industry is leaning – today and tomorrow.
And the best from The Interline this week.
This week saw the publication of the first article from our new junior contributor, Aasia D’Vaz-Sterling, whose fresh perspective on the challenge that brands face when relying on objective data without compromising their own insights and intuition.
