The pandemic has accelerated trends that were in motion prior to this crisis. Shopping has diverted from physical storefront to digital or online platforms. Consumers have also taken a pledge to demand sustainable, social and ethical justice in all sectors of the value chain. Physical retail has been in a downward spiral for years, and the number of permanent store closures will, sadly, continue to rise in the post-pandemic period, compelling fashion players to rethink their retail footprint. E-commerce has been used as a complement to flagship stores, not a substitute. But in the future, this trend will be reversed, where physical stores will be a complementary experience to e-commerce.
In the wake of these changes, the fashion industry will continue to face a period of unprecedented challenges. With these challenges presenting themselves, executives have stepped in to evaluate and address the issues and find feasible solutions for the ever-changing industry. A number of these challenges include addressing speed to market, size of collection, sustainable product offerings and simplicity in marketing, all while building value, which will in turn, promote economic growth and profit. These changes will require manufacturers to be agile with a whole new business and marketing strategy.
Consumer behavior has undoubtedly shifted over the past year. Due to the novel coronavirus, families have been forced to shelter in their homes, travel has become extremely dismal, and business and storefronts have closed down at remarkable rates. This has caused an increase in the use of digital outlets for consumption of information, as well as a virtual epicenter for all to connect via social media platforms. This, in turn, has enabled innovation and efficiency in all areas of the marketplace and has allowed new ways for businesses to scale.
Digital is seen by a third of executives as a silver lining that presents the biggest opportunity in 2021. The shift is permanent and will continue to create opportunities to build slicker, smarter operating models and differentiated customer demand for more personalized clothing. In view of this opportunity, Amazon has recently launched a body scanning system as a method to provide clearer sizing options and enable customers to see their body type in a particular style. This method has been used by manufacturers for a few years to create virtual samples for buyers to review prior to buying. It saves time in development costs and waste.
Companies need to reduce complexity and find ways to increase full-price sell-through to reduce inventory levels by taking a demand-focused approach to their assortment strategy, while boosting flexible in-season reactivity for both new products and replenishment. This will demand educated planning and investment to achieve.
The crisis has accelerated many of the changes that companies were already making to rebalance their supply chain. As entirely new skills need to be developed for the overall survival for the industry, fashion companies will either develop in-house training or acquire new talent by recruiting. Additionally, further education will be needed to update the curriculums of fashion programs.
As shoppers become more conscious of worker welfare issues and the human impact of factory closures, company leaders must uphold the highest ethical business practices and overhaul business models that are exploitative of people and the planet. With garment workers, sales assistants and other lower-paid workers operating at the sharp end of the crisis, consumers have become more aware of the plight of vulnerable employees in the fashion value chain. As momentum for change builds alongside campaigns to end exploitation, consumers will expect companies to offer more dignity, security, transparency and justice to workers throughout the global industry.
This demand includes all aspects of the fashion value chain, from the fields where textile fibers are grown or synthetic fibers are produced to the stores that stock final products. Two-thirds of consumers indicate they would stop or significantly reduce their spending with brands who mistreat their employees or suppliers. Customers want immediacy; they want transparency, and they want authenticity.
Equally, the crisis has sped up the demand for more sustainable and responsible ways of working in all areas of the value chain. As the number of fashion players responding to this need continues to grow, it will prove to be a long-term benefit to companies, workers, customers and the planet. All shareholders within the industry should therefore refine their blends of remote and on-premises work and invest in retraining skilled talent for the new models, such as modular manufacturing or team production lines, to instill a greater sense of shared purpose and belonging for employees who continue to reconsider their own priorities.
Making the long-overdue shift to a demand-focused model in this changing environment is important. This will mean the U.S. and countries will seek to invest in technology and infrastructure. Many companies have invested a significant portion of their efforts in developing zero-inventory concepts. This would negate the issue of brands harboring stock, which has potential to age and end up in landfills.
In this disrupted environment, it will be critical for any business owner to reevaluate their business offerings. They must develop novel strategies for their product assortments, which will derive from a focus on profitability, value, simplicity, adaptability of product type and downsized collections, rather than discounting and volumes. Executives should also create and implement a true omnichannel perspective along with offerings.
Frances Harder is an author and founder of Fashion for Profit Consulting (www.fashionforprofit.com). She consults and speaks internationally on product development, branding, merchandising, production and entering the U.S. market. She can be reached at frances@fashionforprofit.com.
