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Over the past decade, with leaner supply chains, technology-powered omni-commerce, China imports, and social media influencers, the fashion retail business has witnessed a massive growth.
But then came COVID-19, and brought with it unified isolation, an impending economic crisis, layoffs, disruption in manufacturing facilities, factory closures – making fashion and luxury together the most negatively impacted of all consumer goods and services, after travel and tourism. The worldwide fashion and luxury industry saw a 60-70% reduction in sales (from April-May), with footfall in retail and recreation stores down by 44% in the U.S., 52% in Germany, 78% in India, and 59% in Brazil. It kept getting worse until the point when the crisis accelerated the use of digital, causing a paradigm shift in the fashion landscape.
Home wear, sportswear, and casual wear saw a dramatic increase in online sales - Nike’s digital sales increased by 36%, and other brands such as Gucci and Moncler were also able to successfully move stagnant stock quickly online.
The pandemic calls for transformative actions. It won’t be easy, but you can use this period as an opportunity to rethink your fashion business, and here’s how:
1. Pivot Your Strategy to Stabilize Sales
The COVID-19 lockdown has resulted in a lot of people switching to online fashion shopping for the very first time, with 14% of consumers in the U.S. and 17% in China as first-time eCommerce shoppers. An eCommerce strategy for fast adaptability to shifts in consumer demand coupled with omnichannel models will serve as an important step.
Now is the time to test omnichannel distribution, if you haven’t tried it yet. BOPIS (Buy online, pick up in store) grew 28% year-over-year in February compared with 18% in January. When it comes to figuring out which channel works best for you, try various channel distributions including marketplaces and social media sales channels such as Instagram shopping and WeChat e-store, amongst others. Constantly monitor sell-throughs as that will help you identify the highest performing medium for your business.
Secondly, several eCommerce businesses are capitalizing on new opportunities for product innovation or expansion in new categories that are more relevant to people’s daily lives now, such as work-from-home wear and face masks. By exploring these opportunities, you can mitigate loss and protect margins.
Thirdly, foraying into new markets through strategic alliances can also serve you well during this challenging time. Footwear retailer DSW, for example, partnered with grocery chain Hy-Vee to offer products through the grocer’s extensive network of physical stores. Such partnerships can allow retailers to maximize their capabilities and reach new target audience in new locations.
2. Build a Strong Digital Marketing Game
The crisis has created a massive change in consumer behavior. It’s uncertain how long the pandemic will last, which means online platforms will continue to gain market share and traction.
This is the right time to evaluate your company’s digital positioning and customer sentiment via social channels and accordingly invest in your brand and eCommerce marketing. Improving your website’s SEO, load speed, and providing a seamless shopping experience to the customers are just a few of the many beneficial ways you can build your digital marketing strategy. Collaborate with other brands for social media campaigns as that can help with new customer acquisition.
Through A/B testing, you can derive critical insights for your email campaigns and understand what works best for your brand. To understand competitor performance, web crawling can be deployed to capture competitor data around categorization and pricing.
Strengthening your online presence is the first step. Focusing on community-building through innovative marketing campaigns and personalized communication comes next.
3. Focus on Authentic Communication with Your Customers
What’s the mission of your company? What do you stand for?
Having clear answers to these questions has become increasingly significant.
The pandemic has made people value togetherness and belonging. Getting into a ‘discount war’ with other brands may solve your problems temporarily, but by
highlighting the human aspect and story of your brand you’ll be able to connect with your audience in a more meaningful way.
Transparency is key. Be clear about your current production capabilities, delays in deliveries, and required minimum order quantities.
4. Enhance Brand Loyalty
Acquiring a new customer is about five to 25 times more expensive than retaining an existing one, according to Harvard Review. Customers are currently more active than ever online, which is why rewarding them for shopping with you is also more important than ever.
Understanding your audience’s values is a fundamental step in creating an undeniable loyalty program that can help your customers feel valued and appreciated. By creating an exclusive program you will be able to promote customer satisfaction and drive engagement.
Using technology to deliver personalized experiences to customers online can further help build brand loyalty. For instance, you can turn your store associates into digital stylists and offer your customers virtual appointments.
What Lies Ahead?
In the current times of business upheaval, the impact from the pandemic continues to cause disruption. Brands that will make changes in response to consumer needs and adopt agile business practices will be able to emerge stronger and establish a competitive advantage in the post-COVID world.
About F2FMART: A global B2B marketplace and a one-stop fashion destination, F2FMart pairs industry expertise with innovative marketing solutions to provide businesses with actionable insights and bolster growth.
Sources: https://www.mckinsey.com/industries/retail/our-insights/a-perfect-storm-for-fashion-marketplaces
https://www.bcg.com/en-in/publications/2020/fashion-industry-reset-covid
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