COVID-19 has transformed retail, but no one can confirm to what end just yet. Curated ME asked the General Manager of Merchandising at a leading retail franchisor in MENA his take on how brands must transform in order to navigate an unprecedented landscape.
Unfortunately, COVID-19 has launched its own version of the Fashion Games with no warning, rules or finish line insight. According McKinsey and BoF’s “The State of Fashion 2020” Report, “the average market capitalization of apparel, fashion and luxury players dropped almost 40 percent between the start of January and March 24, 2020,” calling this the ultimate ‘Darwinian Shakeout’ that will embolden the strong and accelerate the decline of struggling companies. Hence it comes as no surprise that niche yet beloved brands in GCC are shutting down shop while established houses are re-assessing their internal operational structures, downsizing store spaces, furloughing staff and moving online. To make matters more challenging, consumers’ mentalities around shopping in general has been changing on the daily; with every purchase they ask themselves, “What do we need? What are we really doing?” says Javier Seara, Sector leader of fashion and luxury at Boston Consulting Group.
Brands now have the responsibilities to reformulate their missions and reflect consumers’ new preferences in their offerings. For example, If the trending lifestyle #WFH continues, consumers will learn to love comfort over style; it wouldn’t be surprising if soon enough we see the 2003’s Jeggings and Ugg-boot pairing re-emerge from its grave, but this time, we make it fashion. Francesca Muston, Fashion Director of WGSN adds that “fashion’s frantic turnover of trends could slow [down]” hence brands will start to prioritize more of the practical, basic and trans-seasonal items that will continue to be in high demand.
Changes in product offerings will require new internal production processes, logistics protocols, staffing structures and more. Brands that previously relied on supply processes coming from one source, e.g. China;, may now consider diversifying their risk by implementing new crisis management back up procedures or producing in-house.
To learn more first-hand, Curated ME interviewed expert General Manager of Merchandising at a leading retail franchisor in the Middle East about his sentiments towards how brands will survive the current shifts in the global fashion landscape.
CME: In your opinion, how has consumer shopping behavior changed since COVID-19?
This unfortunate situation had forced people to shift to online shopping and it was a wakeup call for both retailers, who don’t have online presence yet, and customers who didn’t believe in online shopping. This shift in the behavior is positive and healthy. We should be able to improve the online contribution to around 10% -15% of the total retail business post COVID-19 especially in fashion, home and accessories.
CME: Do you foresee brands pausing or shifting their buying strategies for 2021? How?
COVID-19 has affected everyone. Many brands have reduced the options offered for FW20 or delayed the launch plan of Q3/Q4 2020 collections. Brands should stay alerted to any future impact of COVID-19 in the coming months to optimize their inventories.
CME: Once the COVID-19 threat dies down, do you think malls around the world will go back to functioning as normal?
Malls around the world will be functioning as normal but for sure they need now to set different objectives for the rest of the year, watch carefully for the change in customers’ behaviors and speed up the implementation of their digital transformational strategies.
CME: Will brands be forced to implement new technologies to engage with consumers?
I strongly believe that brands who were faster in implementing AR/VR or any other digital tools and channels, are the only brands engaging with their customers during this time. This engagement will be a competitive advantage that will pay off once COVID-19 dies down. Brands will witness a big change in the market share post COVID-19.
CME: Do you think brands can save themselves by shifting operations online?
E-commerce is the present and whoever is still debating that e-commerce is the future or not, is already late and might be out of the game soon. That said, I would like to re-emphasize that e-commerce is a channel that all retailers should adapt to, in addition to the rest of the channels they already have. Last but not least, Brands/retailers should not focus only on launching e-commerce, but they should ensure delivering a great customer experience online.
Curated ME’s Take:
Conduct a SWOT analysis to uncover your brand’s strengths and opportunities in order to leverage the slow market and innovate to your best potential using the current resources you’ve earned. SBOs may consider the importance of entering mutually beneficial partnerships with start-ups, tech firms and/or complimentary brands during this volatile period. Exchanging assets with a trusted partner enables brands to create something outside of their scope of work or outsource important yet non-urgent functions while at the same time cut unnecessary costs. If there has ever been a time to collaborate, it’s now.
Image source: Getty