The Great Reset: What Fashion Retailers Learned from the Pandemic
By Robin Barrett Wilson, Industry Executive Advisor, Fashion Retail, SAP
- Will getting products on the shelves be enough to stay competitive in 2021? As we start a new year, brands may need to rethink how they meet and adapt to the continuous evolution in consumer expectations.
Sometimes the most transformational changes come in increments. First came supply chain disruption that left shelves empty in major cities – such as London, New York, and Los Angeles – as well as small towns that dot the globe. This one event shifted market share toward start-up brands that had products readily available for consumers and inspired legacy retailers to envision completely new shopping experiences and interaction points for their consumers.
These realities only became more commonplace as the year progressed – presenting a new level of stickiness for online channels. Although overall revenue for brands has been down, Nike reported that digital sales soared 75% in June. Tapestry (owner of Coach, Kate Spade, and Stuart Weitzman) also stated triple-digit e-commerce growth in October, while Levi’s realized a 52% increase.
So, what’s next for fashion retailers in 2021?
Subtle, yet deeply transformational
We may have entered a new year, but fashion retailers still have similar concerns. As indicated by 51% of retail executives in a recent Oxford Economics study, the supply chain continues to be at the top of their agenda. They are investing in new additions to their technology stack to support their online business. Even the move toward virtual stores, live events, and new business models is gaining more momentum in response to how consumers shop and what they expect from the brands they love.
For many fashion favorites, lessons learned from the pandemic, so far, point to the importance of balancing their attention toward all these subtle, yet deeply transformational, priorities at the same time.
1. Engage consumers in unexpected ways
Did you know you can visit a Ralph Lauren store in Beverly Hills from anywhere in the world? The convenience of browsing and shopping in a virtual store from the comfort of home, even in the middle of the night, is just one of many innovative experiences that this iconic brand launched during the pandemic. Shoppers can also download a free sample of The Polo Bear Coloring Book or follow a recipe for the perfect cup of hot cocoa.
Consumers are embracing such an experience during a time when one-on-one human connections are scarce. By creating a content destination that amplifies the brand lifestyle, Ralph Lauren keeps their customers engaged and buying, reporting digital sales with double-digit growth in all regions.
But Ralph Lauren isn’t the only brand that discovered new ways to engage and re-engage with their consumers. Levi’s hosts 5:01 Instagram Live concerts, Selfridges runs a beauty-pack recycling program for environmentally conscience consumers, and Matchesfashion promotes an “At Home With” video series that offers tips on at-home activities.
Lesson learned: In a very crowded and competitive space, entrenching brands in consumers’ daily lives are tactics that are effective and here to stay. Retailers should consider how consumers perceive them, where consumers prefer to interact with them, and what kind of content, experience, and interaction their consumers want. Fashion retailers loyal to their vision and mission will stand out to the consumer looking for a brand to love.
2. Stay true to your core consumers
To dive deeper into the theme of committing to a vision and mission, I recently hosted a webcast with Doug Stevens, a sought-after retail speaker, published author, and founder of The Retail Prophet. His discussion on brands excelling in their core mission and two additional competencies resonated with the audience as he shared his predictions for the future of retail.
Without spoiling his soon to be released book, Resurrecting Retail: The Future of Business in a Post-Pandemic World, Stephens explains fundamental archetypes that influence how brands define how their fit with consumers. What a great reminder that brands cannot be everything to everyone!
Focusing on telling a compelling story, providing exceptional customer service, or developing a great product is a great start. But as the competition grows fiercer every day and competing brands deliver packages as quickly as Amazon, excelling in just one of these capabilities isn’t good enough.
One prime example is the rise of direct-to-consumer brands that are fast at work establishing their roots. When shopping at The Big Favorite, the message of the circular economy is evident. Warby Parker is changing the way we shop for eyeglasses, and Allbirds is bringing shoes made of natural fibers to their customers. All these brands have established their initial “leg” of their three-legged stool. But the question remains: should these brands also focus on other areas such as customer service, product design, or anything else?
Lesson learned: So far, 2021 is gearing up to be the year when brands go back to their roots. Foundations that resonated with consumers when they were first acquired will be re-established. Understanding who consumers are today will become more of a priority. Even meeting future expectations will be vital to increase wallet share. But if brands are not proficient in at least two additional supporting themes, they might fade away.
3. Evolve the ecosystem
Retail ecosystems and best practices for building successful ones have been widely debated for the past few years. Whether a brand chooses to use a best-of-breed, end-to-end, or custom-built infrastructure, the pandemic highlighted significant challenges across various areas of the business, especially the supply chain.
Another challenge for brands and retailers has e-commerce. Although buy online, pick up in the store has been discussed for years, not all retailers were equipped to support this business model when the pandemic first hit. For example, there have been gaps in inventory visibility within a local store and white-glove tracking for packages. Furthermore, 71% of consumers are frustrated when website content is not personalized, according to Forbes.
Lesson learned: Without question, consumers are changing the way they shop. The good news is that this transformation of the consumer experience will continue to change. But there is bad news too: securing an ecosystem that supports the entire consumer journey, now and in the future, will become an essential requirement. These trends turn nice-to-have capabilities – such as real-time inventory, personalized shopping experiences, and new forms of consumer engagement – will become table stakes. The post-pandemic consumer will expect more and remain loyal to brands that cater to them continuously.
Momentum fueled by a new perspective
Saying that 2020 was a tough year is an understatement for the fashion industry. One by one, iconic brands disappeared, falling victim to bankruptcies, forced store closures, and sagging demand. And when these struggles converged with the emotional turbulence of a worldwide healthcare crisis, racial tension, and contentious government in-fighting and elections, retailers are beginning to wonder whether a recovery will ever come.
It’s always easy to go down the spiral of self-doubt and second-guessing – especially for fashion executives. But maybe Charlie Mackesy, the author of one of my favorite books The Boy, the Mole, the Fox, and the Horse, was right when he posted on Instagram “you are doing better than you think.”
Could it be that fashion brands are in the midst of not a downturn, but an evolution that is resetting the competitive landscape for a better future? By acting on lessons learned from the pandemic, the answer could be a resounding “yes.”