- Disney Villains
- HEAD GEAR & MASK ALL-IN-1
- Redbubble Creations
- The Mandalorian
- Protection Gear
- Women Special occasion Dresses
- Men Printed T-Shirts and Tees
- Women clutch bags
- Winter Wear
- Winter wear Jackets
- Bath Mat
- Bath Towels
- Beach Towels
- Duvet Covers
- Pillow Shams
- Shower Curtains
- Home Decor (Tapestries – Curtains – Pillows)
- Disney's Mulan
- Marvel Captain America
- Rainbow Brite
- Mickey Mouse and Friends
- Harry Potter
- Jungle Book
- Lion King
- Justice league
- Minnie and Friends
- Pirates of Carribean
- Richie Rich
- Tom and Jerry
- Toy Story 4
- Wonder Women
- Aswebman Designs
- Sports – Ali
- Teespring askwebman store
Woocommerce Category Post Widget
This article is the continuation of Coronavirus and Fashion (1/2), an overview of the short term strategy to overcome the Covid-19 crisis, the biggest challenge to face. Once the bleeding has stopped, companies will need to adapt their businesses for uncertain times. It will require anticipation, flexibility and agility. It´s time to breathe fresh air and rethink our way of life.
The aim of this post is to provide strategic guidelines to be used as basis for the mid-term plan in fashion retail companies, from a real-world perspective.
How we Eat, Travel, Work, Shop or Wear may Change Forever
FASHION INDUSTRY MID TERM STRATEGY TO OVERCOME CORONAVIRUS
How to solve Supply and Demand “issues” in the Mid Term?
• Supply Chain diversification: Our economies and societies are more volatile than ever: social protests, weather extremes, political risks and now, health threats, as described on Fashion Retail Safari. Avoid being dependent on one supplier, one location (don´t put all your eggs in the same basket). Manage different suppliers/ locations even by category. Adjusting to shorter supply chains has disadvantages (e.g. highest labour costs) but benefits too (e.g. Improve quality control, shorter lead times, more flexibility to respond to demand – speed to market).
Fashion retailers will invest more in vertical integration, specially luxury businesses, to take control on their supply chains. Many small suppliers won´t be able to overcome the crisis and luxury conglomerates will acquire them to secure supplies (e.g. tanneries, leather makers, farms). In Luxury, brands take advantage of being part of a platform (fashion technology platforms is a winning option in the New Retail) while benefit from economies of scale, centralization of capabilities (e.g. purchasing power, technology, advertising), access to an exclusive network of suppliers, access to capital, access to professional talent, amongst others.
• Supply Chain transparency: The way customers shop, interact with the product and brands was already changing before the lockdown was introduced. Brands like Patagonia or Everlane, which value proposition is “Radical Transparency”, gave visibility of their suppliers. Where the product is coming from? Technology enhanced transparency. A good example in blockchain is Martine Jarlgaard / Provenance case where a digital history of the garments’s journey is created. Every product has a story, from raw materials to the store, each part of the value chain is identified. Providing traceability and transparency will be another requirement for fashion retail supply chains as customers are more sensitive to hygiene practices and the virus can survive some days on your clothes.
• Shortening collections cycle: In fashion, leading companies have different supply chains depending on the product. The basic principle is to manufacture less-trendy (easy to forecast), high-volume items in off-shore locations and trendy/fashionable items near-shore. Zara, for example, releases around 22 collections a year (competitors, around 2-4 that correspond to each season). Benefits include a higher inventory turn, so a better cash conversion cycle, and reducing over-stocking risks. I´m not saying that fast-fashion is the solution but how merchandise needs to be planned. Hyper-consumerism is dead and customers will pay attention on value (e.g. sustainability, quality over price, product life cycle…). So, paying a little more for long-lasting products.
• Investment in new technologies: Fashion Technology becomes crucial and the benefits of AI, Virtual Reality, Blockchain, IoT, amongst others were commented on Fashtech Ecosystem. Artificial intelligence is key to improve demand forecasting accuracy, assortment optimization (right product, right time, right place), pricing, customer service or digital marketing. Also loyalty and customer service will be enhanced through CRM softwares that could integrate offline and online data. Virtual Reality and Augmented Reality will improve customer experience, both offline and online.
• Distribution diversification: Pure brick-and-mortar players are melting down during self-quarantine. The recovery won´t be easy, specially on High Street (travel restrictions would impact on international shopping tourism, so this type of store will see a huge decrease in traffic) and Department Stores/Malls (fear of over-crowded places? Department stores are dead?). For retailers, moving to digital is a MUST and finding the right online distribution is a key success factor in the near future (e.g. direct e-commerce, marketplaces, technology platforms, social commerce).
• Omnichannel: Investing in digitalization to create a network where every channel and system is connected and integrated. If stores are closed, for example, they could be used as urban warehouses for online deliveries and solve some last-mile delivery challenges. RFID is a must-have technology. RFID is a key enabler of interactive systems that enhance the customer experience and help increase sales, cross-selling and conversion rates. The growth of online sales will require processes and capabilities to reduce the reverse logistics impact on costs (e.g. free delivery?), as retail returns are a nightmare (e.g. customers are used to purchase the same item in two different sizes to ensure they will receive the right one). Virtual assistance and after-sales service will improve customer experience and loyalty across the customer journey.
Last March, Shanghai Fashion Week partnered with Alibaba´s Tmall to broadcast their fashion show. Viewers could purchase thru the See Now, Buy Now format of the event.
Source: What Shanghai first Digital Fashion week meant for Brands and Designers –Alibaba
• The Store of the Future:
Technology, as already commented, is essential to merge the offline and online shopping experience while reducing fear of vising stores. Retailers should develop omnichannel loyalty programs and give salespeople more tools (and training) to enhance the customer experience. Furthermore, Artificial Intelligence could help customers decide what is the right product, style, color and size. Augmented reality will add value to the user’s interaction with the real world, increasing BOPIS or Click&Collect (see below). Cashierless capabilities will reduce lines (social distancing measures) and use of cash. Point of Sales systems will innovate and integrate into the e-commerce channel enabling customers to purchase thru their smartphones from stores (A single omnichannel shopping cart. Companies will consequently have a better understanding and traceability of customer behaviour across channels).
Click and Collect is a must have service. Customers may spend less time shopping in stores, so operating efficiencies will be key to offer a good experience while accelerating the shopping process. A smart fitting room would reduce the time spent around the store and will help customers to interact with store people (therefore, improving customer service) and will make it easier and faster to find the right product.
Retail Store layout redesign. As commented on Why is there a lack of excitement when Millennials visit Department Stores, in many stores, specially in mass-market ones, you get lost, going around in circles, feeling inside a labyrinth of clothing racks. People will fear over-crowded spaces and if there is no space between racks and shelves, customers won´t feel comfortable. Stores should be transformed into “Museums” (less stock and more integration across the customer journey: touch, fit and feel in-store + home delivery). Apparel stores won´t be supermarkets any more (large amount of inventory, high customer density). Retailers will limit the number of customers in their stores, thanks to technology too.
“The Store of the Future” by Farfetch
Salespeople will have to adapt to new “hygiene rules”. Brands could design personalized gloves, masks and glasses for their employees, different from the surgical ones. This could help customers reduce their feelings of anxiety and fear. Store cleanliness and appearance impact on sales will be higher so salespeople will need to adapt to new guidelines in this regards. Less inventory in-stores, as mentioned above, will require fewer shop assistants. Skills needed will become more tech-focus as salespeople will have a dynamic role within the customer journey.
Customers behaviour and attitudes could change, maybe for ever. People will “fear” crowded stores in the mid term too. Department stores and mass-market retailers would be the most impacted on the offline world. International tourism will see drastic declines, and retailers will need to change the focus from international to local shoppers (see the huge impact on flagship stores). Feeling comfortable will be a basic requirement made possible thanks to social distancing and safety cleanliness. Income uncertainty will increase savings, so customers will be more price-sensitive but will prioritize value too (less units per transaction but the willingness to pay will increase for value-added product).
The Closet of the Future will see a different shopping basket contribution. Comfort could be more important than style when shopping clothing while formal wear could see a decrease on its sales contribution. Customers may buy less units but increase the spent on high-quality or quality/price items (value). In this regards, brands betting for sustainability and circular fashion, luxury included, could benefit from changing needs (e.g. Stella McCartney, Patagonia).
On the New Fashion Retail Paradigm, I commented on how brand-consumer relationship is changing depending to the Pyramid of Fashion. In the lower segment of the pyramid, low-cost mass-market brands are struggling to compete against marketplaces. Scott Galloway said that Amazon will spend billions to kill brands. These brands are the ones to sell tangible products (covering functional needs). Coronovarius is a new threat and will kill many of those “white label” brands with low differentiation (e.g. low price, low quality). Like I said before, features of successful brands include building communities of customers, supply chain transparency or product curation, to mention a few.
Differentiating factors of performance
This is a general understanding and, in my opinion, brands will face different challenges depending on their distribution channels (customer behaviour toward department stores different from convenience stores) and customer segment (socioeconomic status and age: Teens and young adults will shop differently than older customers). Brands with a strong online presence (e.g. pure niche players) will recover faster than traditional retailers.
Other differentiating factors in regards sales will be product assortment, style or dress code (e.g. casualwear, formal wear) categories and brand positioning in the fashion pyramid (Luxury will be much impacted in Europe and USA than in Asia, for example). Also Geographic location will affect growth and sales, as countries won´t recover at the same time. Then, store format will impact on sales performance in a different way as customers will include this factor (e.g. avoid large stores) when deciding to visit a store (companies will see changes on their store ABC Clustering).
Finally, it´s definetly the right time for businesses to expand to Asia. China will lead the economy the next decades, not only from the supply side, innovation and technology (China is already world´s top patent filer. USA was leading the ranking for the last 40 years), but also from the demand side.
The aim of this blog was to understand both sides of the fashion business: Art and Science. Today, more than ever before, Fashion needs Creativity and Analytics.
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Cover Picture: RedBull © Hill-lake-district