The WHO recently declared COVID-19 a pandemic, where industries around the world are feeling the domino effects, including retailers announcing delays to arrivals and supply chain issues.
Previously, we delved into the impacts of coronavirus on the fashion industry. While it’s still too early to measure the full effect of the pandemic on businesses, your 2020 assortment may not look like how you thought it would.
The earlier you plan your next move, the better primed you are to weather the storm. We outline the top five problems retail is facing with strategies to minimize risk.
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Maintain an aura of newness
While sourcing stock and generating newness is becoming increasingly difficult as factory quarantines continue, consumer demand is not going to decrease nearly as dramatically.
It’s unlikely your customer has seen all you have to offer. How you promote product you’re currently retailing still has the potential to create excitement. In our Fall 2020 runway trends report, we outlined the upcoming trends from the runway that you should already have in your assortment – from 70’s nostalgia to volume sleeves and pastels.
• Be creative with style edits. Color stories and style-encompassing themes such as the nineties, seventies and basics can be pulled from your current assortment.
• If self-isolation becomes more widespread, work-from-home and loungewear will be of importance to consumers.
Get your future assortment right
During a crisis, or an industry level scale disruption as we are seeing now, getting your assortment right is more important than ever. The wrong investment or deadstock can seriously impact a retailer or brand’s ability to weather a storm, whether that be the coronavirus or a global recession.
While the future performance of the market is in flux, retailers need to tighten their operations by canceling unnecessary orders to bring assortments to a minimum. Successful retailers are going to be the ones who can quickly downsize their orders and upshift when the markets recover.
• Spread the risk. Consider domestic or local suppliers if possible.
• Self care will be top of consumers’ lists.
Reconsider your discounting strategy
March routinely sees retailers heavily discount as we enter the mid-season sales period. In 2019, 40% of Topshop’s assortment was discounted during March and 58% of River Island’s. There’s currently no end date for this pandemic, so retailers need to plan for the worst case scenarios. Uncertainty and delays to supplies means that you’re less likely to want to clear stock as in the past.
The concept of the mid-season sale can be confusing to consumers – many who are just starting to feel the end of winter. Couple this with the growing trend for ‘instant gratification’, consumers buying what they want to wear now, and you have an opportunity to align yourself closer to your customer’s needs.
• Black Friday 2019 saw discounts of 20-30% have a higher rate of sell out than deeper denominations. Discounts don’t have to be drastic to entice consumers.
• For goods too seasonal to hold on to, promote within a smaller sales edit or category-specific promotions.
What’s happened so far?
Over the past two years the proportion of retailers’ assortment on discount has been on an upward trend. Comparing February 2020 to the past two years and we see while discounts have still increased, the rate of year-on-year growth has slowed.
There’s also been a shift in sales communications. Accessorize’s mid-season ‘up to 50% off online and in store now!’ was announced on March 6th 2019, but has yet to be announced this year. While Pull&Bear’s mid-season sale started on March 8th in 2019. This March there has simply been ‘up to 20% off selected items’. House of Fraser’s ‘up to 50% off sale’ has also yet to materialize. Instead they have pushed an extra 20% off of outlet – clearing older stock in its place.
Consumer engagement is essential
Whether it’s due to low stock or consumers spending less, during times of trouble it can be easy to disconnect with your customer. It may not feel like it right now, but the market will settle, new processes will be put in place and stock levels will return. During this challenging period, it’s essential you keep your customer engaged.
If the situation progresses and people in the US and UK have to self isolate, increased online activity will provide you with a more captive audience. For retailers that mainly rely on bricks and mortar interaction, now is the time to step-up your online efforts.
• Is it time to join TikTok? Create a challenge or have your brand take part in a challenge similar to what E-Girls and E-Boys do.
• With the expected increase in home delivery, promote shipping offers to stand out against the competition. It’s critical to maintain communications with warehouses and distribution centers to ensure this is viable.
Evolve your marketing strategy
Should customer service be impacted, retailers need to be transparent about the challenges they’re facing to maintain goodwill and minimize long-term damage to brand loyalty.
Retailers have been quoted in industry press on potential supply chain problems and luxury brands have made donations to fight the virus, yet few have communicated the situation to their customers. Nordstrom and Target sent letters to email subscribers outlining hygiene measures. The key message being that their stores are clean and safe to enter. Target also outlined limiting items per purchase to ‘allow more guests to get what they need’.
Uniqlo’s Hong Kong e-commerce homepage explains that they are experiencing delays in manufacturing and distribution and offer their ‘sincere apologies’. They also explain that store opening hours may be adjusted, but that the ‘online flagship’ will operate as usual – and that ‘you can shop easily anytime and anywhere’. David’s Bridal sought to reassure consumers by stating, ‘concerned about coronavirus-related delays? We’ve got you covered’.
• Make customers aware of any delays to delivery ahead of purchase. If something happens out of your control, maintain clear communication and have extra customer services representatives on hand if needed.
• There’s very few businesses or individuals that aren’t involved in one way or another. So be honest about problems that arise – we’re all in this together.
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