The coronavirus (COVID-19) pandemic has had a significant impact on businesses around the globe over the past few months, and of course fashion retailers are not immune. The impacts vary in each country, but generally the fashion industry is suffering economic losses as a result of social distancing, lockdowns and other measures being implemented by governments around the world to slow the spread of the virus, and customers with less money to spend because they have found themselves suddenly unemployed. Additionally there are issues with supply lines at the manufacturing side, which in turn can create shortages for retailers.
Within the retail sector, clothing and accessories stores are down 50.7% on last year.
According to the US Census Bureau, retail sales overall during March were down 8.7%, seasonally adjusted, from February. It’s the greatest monthly drop ever recorded and exceeds the previous decline recorded in 2008 during the global financial crisis. Within the retail sector, clothing and accessories stores are down 50.7% on last year. Similar statistics are emerging all over the world.
Offline impacts of COVID-19 on the fashion industry
The coronavirus pandemic has forced many retail outlets to close their doors – entire malls and other shopping centers are shuttered in some countries. In other parts of the world, where lockdown restrictions aren’t as strict, people are still staying away from shopping centers and malls, afraid of catching the virus. Retailers are in many cases still forced to pay extremely high rents to landlords unless they have assistance from government or can reach a consensus with the owner of their buildings.
Retailers are in many cases still forced to pay extremely high rents to landlords unless they have assistance from government or can reach a consensus with the owner of their buildings.
People who have lost jobs or had their incomes reduced as a result of the pandemic simply don’t have as much money as before to spend on non-discretionary items such as clothing. Consumers with maxed out credit cards and high levels of household debt who haven’t lost their jobs yet are also nervous, and are likely pulling in the reigns on their spending. The result is that many well-known brands, as well as smaller retailers are finding themselves in financial dire straits and many will struggle to survive post-pandemic.
Online impacts of COVID-19 on the fashion industry
Some retailers have moved all their operations online as they’ve closed physical stores. Those who have both online and offline presences are still having to absorb costs from their bricks-and-mortar losses. Online-only retailers are in a slightly better place, but still facing challenges from reduced spending.
Online-only retailers are in a slightly better place, but still facing challenges from reduced spending.
Perhaps its time to force a rethink to the items your online fashion store is selling? People are still purchasing underwear, pajamas, comfortable and casual clothing for being in lockdown. Changing seasons mean that those working from home don’t necessarily have suitable non-corporate clothing to wear. For example, it is headed to the winter months in the southern hemisphere and people may want more sweatshirts and sweatpants for working from home. In the northern hemisphere as summer approaches, they may want more t-shirts and shorts. However, high fashion items, formal wear and business attire are less in demand.
As restrictions ease there is hope for online retailers. According to the Emarsys daily COVID-19 Commerce Tracker, Italy has seen an increase in online fashion orders of around 28% after a 40% fall at the height of its lockdown restrictions. In the short to medium term, online retailers should look at strategies to boost online sales. This includes building on existing relationships and reaching out to high-value customers – the approximately 20% of customers who contribute 80% of revenue.
Italy has seen an increase in online fashion orders of around 28%
Offering free shipping if you can or other loyalty perks can also help to boost sales. So, too, can revising your returns policies. And when you have no physical outlets to showcase your fashion collections, looking at innovative ways to display garments and accessories online can help to boost your sales as well. Many consumers want to get an idea of what something is going to look like, such as seeing it alongside other items that make up a complete outfit, which you can easily implement by using Suitapp.