The age old saying – necessity is the mother of invention – has now got a new lease of life. In today’s context, the pandemic is the trigger of a new normal. In fashion retail, the new normal has legacy from the past and the top trends that have emerged are mostly an advancement of directions that the industry has been debating on in the last few years, with a few disruptive changes thrown in.
The background for change
What was predicted to be a fantastic year for retail by most experts with expected growth in global fashion retail to be around 5 per cent turned out to be a year that will be remembered in history for the COVID-19 pandemic that has forced the world to stay indoors! Not only the brick-and-mortar stores, but even the online platforms were closed for fashion items, signally a total closedown of fashion retail business. Eventually, online players including the likes of Amazon, Flipkart, and ShopClues started delivering essential goods in order to stay functional
The current downturn is very different from the 2008-09 slowdown. Every year, brands plan their expansion and strategies based on forecast, and if they foresee a slowdown, they plan for that. But the reality is that no one has ever planned for a ‘zero sales’, ‘negative cash flow’ situation. Hence, the COVID-19 outbreak has had an unprecedented impact on the apparel retail sector. Retailers, globally, are searching for revival strategies and the focus is survival.
The Indian apparel retail industry is no different. The industry was slated for a growth of 13 per cent, predicted to reach approximately US $ 124 billion by the end of 2020. However, the outbreak has drastically changed the overall scenario with the entire industry at a standstill or even going backwards in time with added pressures.
Lay-offs, partial opening, piling inventories, dwindling cash reserves and cautious consumer with changing shopping preferences have all added to the mess. So, for all retailers the focus is on day to day planning to first revive the tempo of business and then find ways to survive till the situation becomes ‘normal’ or rather till the new normal becomes the normal, growth is not even a consideration anymore!
Expected trends have changed and are still in the process of further changes, but from the way the retail industry has behaved in last 4 months, Apparel Resources curates the top trends that have emerged from two core developments brought on by the pandemic – internal retail breakdown and changing consumer preferences.
Also Read: Top Trends 3 – Sustainability
A. Trends due to consumer behavioural shifts
1. Retail spending will slowdown
According to GlobalData, a leading insight company, global retail spending is expected to take a dive of US $ 549.7 billion in the year 2020. This grim news denotes a fall of 3 per cent in consumer spending rather than the estimated growth of 5 per cent predicted at the starting of the year. A decline of this magnitude has severely hit retailers the world over. Fashion is a least priority product and what’s selling is basic everyday clothes or more recently comfort clothing. According to the report ‘The State of Fashion 2020’ by Business of Fashion and McKinsey, the consumer mindset was already showing signs of shifting in certain directions before the pandemic and the pandemic has only hasten the movement.
2. Expectation of more sustainable products and supple chain
There is evidence that the quarantine has accelerated trends like intolerance for wasteful business practices and expectations for companies to be more purpose-driven and sustainable in their approach. Seasonless fashion, discounting, localised supply chains and corporate innovation along with preserving cash for these uncertainties are some of the prospects fashion companies will have to get used to in order to change with the times.
In a country like India, people are highly conscious of their budgets, and the longer the lockdown and containment restrictions remain, the more people will want to preserve money to weather the difficult months ahead. Adjusting to the new normal could mean the end of fast fashion in the coming times. Retailers should push capsule wardrobes focusing on a ‘buy less, buy better’ approach. Post-virus, consumers will seek out brands that they align with morally more than ever before, with an emphasis placed on conscious products.
3. Phygital – combination of digital and physical presence
E-commerce is definitely turning out to be the ‘new normal’ opportunity – especially for those who are selling apparels. E-commerce lately has been bringing in money, especially in this era of coronavirus and lockdown, and so it will not end soon. What’s noteworthy is that not few but practically all bricks-and-mortar retailers are seeing a surge in online sales – irrespective of where they are located.
Marketers need to rethink and reimagine the concept of retail, as the global pandemic has made retail formats realise that they need a hybrid model that consists of physically coupled with a digital presence. Consumers themselves are Phygital; they exist in both the physical and digital worlds, and they participate in the retail world in both places as sometimes in-store experiences invoke purchase and vice versa. Therefore, it makes sense for retailers to inhabit this same space between the physical and digital worlds and meet consumers there.
In a post COVID-19 era, consumers will look for more personalized immersive experiences. Hence, retailers need to break out from the traditional one-dimensional zone and consider incorporating phygital in their strategy.
4. Increase in safety measures at retail stores
While it was touch and feel that ruled offline retail until the COVID-19 hit the world, the new mantra is touch as little as necessary and sanitise when you do. What will ease the consumers will be the sight of wipe-down stations near trolley stands, store staff wearing gloves and facemasks, ‘no handling’ signs on shelves and plexiglasses separating the cash counters, etc., from consumers, among other things.
Retail stores will not look the same as they used to before the pandemic hit the country and the world. Unlike the earlier times, retailers will now be trying to reduce the time that consumers spend in the stores in order for others to enter while many will also impose restrictions on freely touching clothes or other products.
The industry unanimously opines that hygiene and safety are of paramount importance going forward and how people perceive brands will depend on the hygiene measures adopted in the retail environment, not just for today, but in the next few years.
5. Contactless retail experience
The need to stay away from each other during the ongoing pandemic has made the industry think and use technology that was previously targeted at solving a different problem – convenience – to offering an altogether different advantage of lower interaction between people, products and infrastructure. Retailers are now increasingly looking at implementing contactless and mobile payments for transactions in order to avoid touch as much as possible.
Retail brands are aware that consumers will want experience more than ever and there will be all the more need for the adoption of VR and AR to create that three-dimensional layer. For starters, technology around payments will be the key as the process needs to be as seamless as possible. There is a need for technology that would enable the retail brands to disinfect the tried garments easily and there is a technology being tested on in the US around this.
Furthermore, technology would be looked upon for offering customers with maximum information without interacting with the store staff. Retailers would need technology where they can provide information about merchandise on their own, displayed on a screen without any interaction with any of the staff. These are only a few areas for digitisation, the opportunity is limitless and in the next few months many more technology interventions will make way into retail.
6. Rise in nationalistic sentiments
The pandemic and the military standoff with China have brought the nation together in the best way possible. The spirit of nationalism is running high and taking inspiration a number of fashion brands have begun pushing ‘vocal for local’ themes across all of their marketing and advertising campaigns and this has started catching on with the consumers. They have started looking for Made in India tags on the products they are buying and this has further escalated with the.
Online shopping platform ShopClues that has 2,500 local merchants on its platform has added ‘Made in India’ badges on products that have been produced in the country and even launched ‘Atmanirbhar’ section on its platform that features locally made products across categories. Similarly, Myntra too has launched its ‘Made in India Store’ with the tagline ‘Our Brands For Our People’ in support of the move to be self-reliant, eBay has launched #LocalToGlobal campaign to encourage Indian MSMEs to expand their businesses globally. The campaign is part of a larger narrative planned by the brand to showcase the cross-border e-commerce opportunity to homegrown businesses.
This initiative will provide the right impetus to the brands to invest in innovative means to enhance manufacturing of products in India instead of outsourcing them. The times ahead will also witness a number of international brands (already present in India) changing or restrategising their sourcing plans, which will further strengthen India’s footprint at the international level.
7. New product categories emerge: WFH – a new paradigm
Understandably, lesser people are venturing out and the norms of formalwear have been done away with replaced by newer favourites. The first category at the forefront is an easy guess – athleisure, active and loungewear. Apart from sustainability, innovations have also been catching the eye of the consumer. Women staying at home have also increased the purchase of lingerie, sports bras and nightwear
Fashion retail brands are working on every possible way to turn adversity into opportunity and so, a number of major brands like Lifestyle, Shoppers Stop, Madame, H&M, Myntra, FableStreet, among others have repurposed their Spring/Summer line as Work From Home-wear or WFH-wear. These brands, whose sales had stopped completely during the lockdown as shipments of non-essentials were barred, are now hopeful that there will be a pickup now with the launch of this new vertical.
The WFH range basically focuses on ‘above the desk’ look and it is imperative to have a workwear top that can be paired up with comfortable bottoms; the idea is to offer loungewear looks and while doing so, include styles that are smart enough for conference video calls. The WFH collection is all about utility as well as versatility.
For now, the WFH category is being looked at as a contingency plan when majority of offices are still shut and people are working remotely even as retail firms believe that this will become a part of the brand’s offerings permanently given that working remotely would become a way of life in the coming months.
8. Masks attain status of fashion
Interestingly, even before COVID-19 was declared a pandemic, many instances of face masks emerged on the international fashion runways. 2 years ago, during his Spring/Summer showcase at Paris, Rick Owens sent masked models down the ramp, teaming it up by giving them out to his audience as well. These human muzzles were also spotted in the recently concluded Fall/Winter 2020 showcases of Marine Serre, Richard Quinn, Maison Margiela, The Blonds.
In countries like Japan, Vietnam and South Korea, wearing a mask has always been the norm as people in these countries wear masks on a daily basis to protect themselves against pollution, air borne diseases, germs and also from preventing the spread of germs to others. Otherwise, the mask had the reputation of being a clinical product beneficial only for the medical workers and patients. But now due to the environmental and climatic crisis around the world and mostly due to the current health crisis, the perception towards this product has changed overnight.
With ‘social distancing’ becoming the new buzzword, the simple mask is going to be a trend that is going to stay and it does have the possibility of a broader reach of customers such as the youth who are looking at it as an additional accessory to their cool look.
B. Retail is in for consolidation and innovative ways to retain customers
As the Inherent weakness in retail gets exposed, the biggest challenge is to survive and then Revive. To this end, retailers are making many internal changes and shifts with focus of staying afloat and retaining customers. According to GlobalData Retail, a leading insight company, the lockdowns triggered by the pandemic forced shut down of over 2,63,000 stores worldwide, sending millions to be furloughed or laid off. Filing for bankruptcy and chapter 11 has become a norm with some of the best names involved. Analysts at Wall Street firm UBS predict that around 100,000 stores will close down permanently by 2025.
Industry watchers firmly believe that the crisis will drive consolidation and the retail industry will have its own share of fallout (smaller organised or financially struggling retailers will have difficulty in surviving this period) and few strong retailers with a differentiated value proposition will emerge stronger.
The fact of the matter is that fashion retail was already seeing a down trend even before the pandemic disrupted the market. Retailers were grappling with profitability and growth-related challenges, forced to rethink their operational strategy. The COVID-19 just fast tracked the process.
To stay relevant, retailers – large and small – launched omnichannel initiatives to facilitate retail for consumers. With even mom-and-pop stores offering contactless curbside pick-up, appointment-based shopping will become the new norm in the coming days and retail will have to work around it. And this is not limited to international retail, the Indian retailers is equally clued in.
In the case of curbside pickup, a customer has the option to drive by the storefront, or a predetermined ‘curb’, to pick up a product—without ever having to leave their car. In either case, both options are a great way to reduce shipping costs and minimise person-to-person interactions without compromising on convenience or flexibility.
Another innovative concept that is picking up is that of ‘Dark Stores’, which are essentially retail stores, minus the customers walking inside the aisles. The shoppers, instead, are able to browse through the stores across different online media and applications which offer a near real time view of the shelf. Buy-now-pay-later is also an interesting way to attract customers, reluctant to shell out money but keen to shop.
Nearer home we have retailers, designers and brands giving personalised service to its regular customers which includes sending collections home for review and trail, auctioning of designer and exclusive clothes at rock-bottom prices, sending latest catalogues and offering never heard discount offers. In days to come, the retailer will be challenged to offer even more innovative schemes to keep the momentum going.
Also Read: Top Trends 1 – Fashion Technology
Also Read: Top Trends 2 – Sourcing