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2020 has been an unprecedented year for fashion retailers and for the overall industry as well. Amid lockdowns, physical stores got shut and people turned more to online buying trends. Whereas, retailers without an online presence bear the most brunt.
Sending major retailers filing Chapter 11 bankruptcy. While 2020 is not expected to be easy, it will be significantly more challenging for some companies than for others.
As for retail hit, UK based Primark sales plunged from 650 million pounds per month to complete zero. For those that did operate online, the pace and investment to scale-up and improve processes went significantly high.
Even after the safely planned reopening, shoppers were reluctant to get back to previous spending spree immediately. And sale fell for a 3rd compared to previous year, said Ipsos Mori Research report.
According to Ipsos Mori Research report, by July 42% of non-food sales were still being made online, even a year before the amount had been 30%.
During the summer, consumer buying pace gradually returned to the high street and by the first week in September it had recovered to two thirds of 2019 levels, said the report.
Any hint of optimism faded away with the second wave lockdown measures with the additional fear of a new strain of the COVID-19 virus. Experts have cautioned the damage of sales in London, the southeast and east England may cost retailers 4 billion pounds in lost trade.
At the same time, McKinsey Global Fashion Index predicts that the fashion industry will continue to grow at 3 to 4 percent in 2020, slightly slower than the 3.5 to 4.5 percent estimate for 2019.
This slowdown will stem from consumers being increasingly cautious mid broader macroeconomic uncertainty, political upheaval across the globe and the continued threat of trade wars.
This year has already been tough, and economic gains continue to flow to a select small group of players, while the middle is increasingly squeezed and the share of companies actively destroying value grows.
The apparel industry also exposed the truth of long claims of manufacturers that retailers only care for lowering garment prices and sustainability did not matter to them.
With buyers and brands withholding payments of completed orders and postponing millions of pieces of orders.
In North America, consumer sentiment is muted and tariffs — aided by the strengthening dollar — are impacting both imports and exports.
A consumer ‘awakening’ to sustainability issues is taking place, which is affecting people’s shopping habits just as it is impacting on other aspects of their lives
Emerging Asia-Pacific markets are – the most optimistic region is Asia, although, even here only 14% of executives expect an improvement in conditions – are still relatively strong although growth is slowing: retail sales in the region have been falling short of expectations, and will continue to disappoint in 2020 as consumer sentiment weakens.
On the other side of the world, mature Europe continues to suffer from the general global economic malaise and ongoing uncertainty around Brexit.
Growth in emerging Europe, Latin America, the Middle East and Africa is expected to remain stable overall with some brighter spots, such as Brazil and Nigeria — two of the most populous nations in the world that have rapidly expanding middle classes.
Nonetheless, pressure remain for incumbents across the fashion industry who do not respond or adapt fast enough. Enabled by e-commerce marketplaces linking them direct to global consumers, Asian players will undoubtedly strengthen their competition with western brands through cross-border channels.
Meanwhile, pure digital players that pioneer new business models may be exciting as new paths to profitability emerge, but other tech players will begin to weaken. And as industry-wide digitization progresses, the need for reinvention has even reached showrooms and trade fairs.
Sustainable trend
Consumers are becoming more and more attuned to sustainability issues, and more demanding of retailers to keep pace with their changing expectations. The key challenges retailers need to overcome here are consumers’ price perceptions, overwhelming choice, the risk of increasing cynicism and inertia to change.
A consumer ‘awakening’ to sustainability issues is taking place, which is affecting people’s shopping habits just as it is impacting on other aspects of their lives. Half of the on-line public say they have changed the way they shop over the last couple of years to try and take into account social and environmental issues. Only one in five believe that there is no point changing what they buy as it won’t really make much difference to the environment.
Retailers recognize this trend and point to increasing awareness, interest and even excitement among the mainstream public on sustainability issues. Given retailers’ close relationship with their customers, they feel well-placed to respond to the new-found consumer enthusiasm for sustainability issues.
Overall, the outlook for 2021 is not all negative, according to Forbes. Apparel and footwear will come back strong, even sooner than it is expected. But, what people want to wear and how they prefer to buy it will be different. Consumers are not anxious to give up the convenience and safety of online shopping.
There is scope for innovation, too. Breaches left by failed retailers and brands will make way for new innovative startups led by Millennials and Gen Zers, many whom have been out of work since the start of pandemic. Let’s all crave for that.
