Zara, the iconic fast-fashion brand, is closing 16% of its global stores as a cost-cutting measure. More than 2 million garment workers in Bangladesh's fashion industry have lost their jobs as a result of the pandemic. And while the economic cost of the pandemic is being felt by everyone across the board, the fashion industry is also expected to see tectonic shifts in the way things function.
The Expected “New Normal” for the Fashion Industry
Brick and mortar stores have, for long, relied on their USP of tactile experience to compete against the deep discounts of online stores. Buyers can touch, feel, and try the garment in the real world before making a purchase. However, the fear of the virus is keeping people indoors. Even as governments ease lockdown restrictions, footfalls in retail stores are expected to remain low.
Markets are expecting a surge in fashion e-commerce. The growth will come from two factors – new consumers who have been skeptical of online shopping. They are likely to overcome their inhibitions and shift to online stores for their purchases; and luxury fashion, which relied on customer experience to sell.
Interestingly, compared to mass-market fashion, the luxury fashion segment has been slow to embrace online commerce. However, as inventory piles up and consumers move online to shop for their favourite brands, the segment will see a push towards e-commerce.
Prior to COVID-19, the online fashion market in India was growing at 32% CAGR. It's hard to predict growth numbers for the industry in these unprecedented times. However, the trend towards e-commerce is expected to accelerate, both, in terms of consumers and brands embracing the internet.
The rise of e-commerce can be an opportunity for neighbourhood retail fashion stores to move inventory. The surge in demand is likely to see exacerbated last-mile delivery problems. Small brick-and-mortar stores can collaborate with online fashion players to digitise their inventory and meet demand in tier-2 and tier-3 cities in India.
2. The shift towards sustainable fashion
The COVID-19 pandemic has brought climate change in focus. Lockdowns reduced carbon emissions drastically in several parts of the world. China saw its carbon emissions drop by a whopping 25% when factories closed as a result of the COVID-19 outbreak.
Buyers in developed economies were demanding more sustainable fashion before the pandemic hit. COVID-19 has raised awareness around the fashion industry's impact on climate change, which will accelerate the demand for sustainable fashion, globally. In developing economies, such as India, buyers in Tier-1 cities will drive the trend.
Sustainable fabrics, such as hemp and linen, are the most obvious step in the move towards sustainable fashion. Fashion retailers in Tier-1 cities in India would do well to increase their sustainable fashion inventory in a bid to stand out from the competition.
Fast fashion, too, is expected to see a major slowdown as buyers demand a shift towards sustainability. There is also the factor of reduced dispensable income of consumers. They are more likely to 'buy less and buy better' as they cut down their spending on non-essential items.
Related reading: Likely fashion trends in the post-COVID world [Hyperlink it to the relevant blog post, when it is up]
3. Virtual shopping assistants
The fear of contracting coronavirus is keeping consumers from visiting retail stores. Little is known about how long the virus lives on fabrics, which adds to the anxiety of shopping in-store. Virtual shopping experiences are one way retail stores are planning to combat buyers' reluctance of stepping out to shop. Big retail brands might invest in sophisticated AR and VR technology to lure customers to their store, virtually.
However, small neighbourhood stores can join the trend, too. Let buyers make video appointments with a dedicated store assistant for a virtual shopping experience. The store assistant can cater to a customer just like they would in an in-store encounter. A smartphone and good Wi-fi is all that's needed.
Likewise, brick and mortar stores will have to offer home deliveries of purchases, which means they will need to revisit their returns policy. Even as the pandemic subsides, the trend of virtual shopping can stick, thanks to the comfort it affords to the shoppers.
4. Focus on in-store sanitisation
To lure customers to stores, brick and mortar outlets will need to allay buyers' apprehensions of contracting the virus. Stores will need to install visible sanitisation measures to gain consumer confidence. Sanitisation stations and markers for social distancing could become a staple for stores, even long after the pandemic has subsided. Stores could also use UV rays and ozone treatment to sanitise inventory.
They will also need to invest in training their staff on personal hygiene, using basic equipment such as hand-held temperature devices, and handling difficult customers.
China is the manufacturing hub of the world. COVID-19 has made businesses around the world realise their dependence on China, be it for raw material or finished goods. It holds for the fashion industry, too. We might see an overt shift from manufacturers and retailers in their sourcing strategy, over the next couple of years. It is, likely, to be a combination of two strategies – distributing supply chain risk over multiple regions; and increased focus on local suppliers. The latter holds especially true for India, where there is a strong anti-China sentiment, coupled with the push for supporting local businesses.
The expected rise of e-commerce in the aftermath of COVID-19 isn't going to be restricted to the B2C segment. As restrictions remain in place on the free movement of people, retailers, and online businesses will depend on the internet to source inventory.
Zilingo remains at the forefront of the online movement. We bring verified fashion suppliers from across the world on one common platform, so you have the convenience of choice from the comfort of your home. We combine it with our low minimum-order-quantity (MOQ) guarantee, which means substantially lower investment for your fashion business.
Lower your risk, both, capital-wise and virus-wise. Check our exhaustive inventory across fashion categories, with free samples and a pan-India delivery.