It almost goes without saying, but we’re living through a lot of change. At a macro level, everyone reading this article – which serves as an introduction to our January 2022 focus on intelligent retail – has experienced something that has no equal in living memory. It’s still difficult to dissect the full impact of the pandemic, with it playing such an active, ongoing role in many areas of the world, but one thing feels safe to say: there was a pre-COVID society, and there will be a post-COVID society, and the two will not look the same.
And while we’re unlikely to see another pandemic in our lifetimes – I hope – there’s every indication that sweeping change is going to become the background of the future. Climate change, political friction, social progress (or erosion), the proliferation of technology and connectivity. We inhabit a world where a heady combination of threat and opportunity is reshaping the way we think about almost everything, and how and why we interact.
Crucially, there’s real commercial and humanitarian pressure behind all these waves of change.
In consumption markets, discretionary spending on things like fashion is set to face competition from a higher cost of living post-COVID, making every purchase and every consumer interaction that little more hard-fought.
In production markets – where fashion continues to be made – life is going to be much harder; a report released by the World Bank yesterday underlines the very real possibility of what it calls a “hard landing” for many. According to that report, “By 2023, all advanced economies will have achieved a full output recovery; yet output in emerging and developing economies will remain 4 percent below its pre-pandemic trend.”
That output, of course, includes the fashion and textile export industry, which remains hugely important to many countries’ economies. And although those exports began to recover last year, overseas manufacturing is still subject to the need to balance what the head of the Bangladesh Garment Manufacturers and Exporters Association calls “lives and livelihoods“.
From the perspective of a brand or retailer looking to create new products or to buy finished goods, and to then sell them on to customers who can afford them, these macro forces are deeply concerning. At the same time as shoppers are tightening their belts and uncertainty continues to reign around which product categories will be in demand at any given time, there’s the looming idea that parts of Asia’s apparel manufacturing industry could soon find themselves threatened by rising sea levels.
This is generating a huge amount of operational risk from both ends of the value chain. Brands and retailers will find it difficult to rely on their existing manufacturing base (or to establish a new, more diverse and more agile one) with so many different stability variables in play, and those same organisations are also going to face considerable uncertainty around which products to actually send into production in the first place.
This brings us down from the macro level, where sweeping global and social change is impacting the fashion industry at the same time as other sectors, and to the micro – where the blooming and withering of trends happens more quickly than ever, where social and cultural movements can rise from nothing to universal dominance in days. Combine this with brands’ desire to become more inclusive, and the fashion industry is entering a phase of its development where it needs to be both universally accessible and able to react to the changing demands of both broad and narrow segments of the population.
It’s a glib example, but consider the rather unexpected resurgence of Crocs. While headlines were grabbed by the pandemic-catalysed shift from occasion wear to lounge wear, there are deeper – but equally surprising – shifts happening that can see a brand that, a decade ago, had the dubious honour of having its cornerstone product listed as one of Time magazine’s worst inventions, grow more than 60% in a single year, during difficult trading conditions for even universally-loved brands.
And while gathering trend indicators has long been an always-on task, brands are facing a world where new demographics (especially teenagers) are putting fashion first on their list of disposable income priorities, but communicating through a perhaps-unexpected list of social channels, and seeking out a combination of both established and emerging brands.
All of which is conspiring to create a very difficult environment for both brands and retailers. At the same time as managing long-term risk to sourcing strategies, shoring up plans for business continuity, and balancing different retail channels, they’re also wrestling with short-term fluctuations at every level of the product hierarchy – from category to colourway.
Against this backdrop, it’s little wonder that some retailers are hedging their bets – offsetting the risks inherent in their own buying and design strategies by selling more third party brands and making a consistent and predictable return on their existing selling and fulfilment infrastructure.
For the majority of retail and brand businesses, though, that kind of spread-betting is probably not going to be palatable. Which leads to the conclusion that’s going to drive all of this month’s coverage on The Interline: that brands, retailers, and their suppliers need an entirely new level of confidence in what they choose to make and bring to market, And as a consequence, a huge amount of importance is now being placed on retail intelligence services and platforms – both traditional, expertise-driven services, and solutions that rely primarily (or solely) on data scraping and analysis.
As we look into this topic over the next few weeks, look for features from new contributors, new collaborations, and the launch of our first monthly podcast wrap-up, which will include guests from some of the major players in trend analysis and objective retail intelligence.
