Google News
spot_img

Back to Business: Fashion retailers focus on shop by appointment, engaging consumers online

Must Read

When cities went under lockdowns, it was the nonessential items businesses which were forced to temporarily shutter shop, the worst hit by the pandemic. The supply chain too suffered with the closure of retail units. One of the worst hit sectors during the lockdown was fashion retail. Clothes became non-essential items in a world where everyone was working from home and meeting friends and family virtually in a bid to comply with the social distancing norms associated with keeping COVID-19 at bay.
Now as the lockdown is being lifted in a phased manner across all the marketplaces in the country, fashion brands are coming out of their funk, focusing on adapting to changing needs amid the ‘new normal’ and working to ‘co-exist’ with the virus.
This lockdown has taught fashion retailers a valuable lesson – to adopt a more customer-focused approach and improved community engagement. Now, as marketplaces – particularly malls – are reopening in Unlock 1.0, retailers are gearing up to giving an ‘experience’ to the consumer on all channels possible.
Many retailers plan to phase their openings, with stores which are easily accessible to open first. For example, Tanishq has resumed operations across 65 out of 328 stores across the country and over the next few weeks, it plans to open the rest of the stores in a phased manner. Celio* announced the re-opening of a few key stores as well as resumption of operations on the website.
Speaking about the same, Abhishek Shetty, Chief Marketing
Officer and E-Commerce Head, Celio* India said, “The COVID-19 outbreak has found all of us rearranging our lives and work like never before. Things of convenience aren’t so anymore. However, steps taken by the government are crucial to our well-being, and surely if we follow the precautionary instructions provided to us, we’ll soon enough beat this pandemic, and rise stronger as a nation. At Celio*, ensuring our customer’s safety is of utmost priority and we are taking all the precautionary measures to make the customer’s shopping experience pleasant and safe.”
The pandemic has altered consumer psyche permanently and considerably weakened spending power. Due to these factors, fashion brands like Aks Clothing witnessed negatively affected demand and supply. However, Nidhi Yadav, Co-Founder, Aks Clothing, said that the brand is “expecting a surge in demand now as the lockdown has been lifted and will most probably reach pre-COVID-19 figures in two to three weeks’ time.” She said they are optimistic that the situation will improve in a few months as people get used to living with the virus.
Most brand and retail heads feel that going forward, it will be important to develop new and dynamic capabilities to cope with rapidly-evolving consumer sentiments and government stipulations on how businesses must be run.
While, accepting the unfavorable conditions, she added, “It is true that we’re all going to drop down a notch in our need hierarchy and that means that consumers will be cutting down on their expenditure as per their income. Since we’re into value segment, our demand wouldn’t be affected much. Consumers who will drop from our customer base will be replaced by consumers who will be dropping down from even higher positions in the consumer hierarchy.”
Learning from the Global Retail Industry
Fitch has projected in a study that many major consumer nations will record a Y-o-Y decline in fashion spending.
– In the United Kingdom, for example, they forecast consumer spending on clothing and footwear to decline by -1.4 percent in 2020 from a growth of 6.5 percent Y-o-Y in 2019.
– In Asia, using Hong Kong as an example, they are projecting a Y-o-Y decline on spending within this segment of -17.3 percent a deepening on the -15.9 percent decline recorded in 2019.
Mckinsey in its report ‘The State of Fashion 2020’ estimated that:
– Revenues for the global fashion industry (apparel and footwear
sectors) will contract by 27 to 30 percent in 2020 Y-o-Y, although the industry could regain positive growth of 2 to 4 percent in 2021.
– For the personal luxury goods industry (luxury fashion, luxury
accessories, luxury watches, fine jewellery and high-end beauty), it estimated a global revenue contraction of 35 to 39 percent in 2020 Y-o-Y, but positive growth of 1 to 4 percent in 2021.
– As per their analysis, if stores remain closed for more than two
months, approximately 80 percent of publicly listed fashion companies in Europe and North America will be in financial distress and may go bankrupt in the next 12 to 18 months.
– Burberry has revealed a 62 percent drop in full-year profits
to £169 million as a result of the coronavirus pandemic and warned it could “take some time” before the luxury fashion industry recovers to pre-crisis levels.
– Gap Inc has reported a £940 million operating loss during the
first quarter of its 2020 financial year as a result of to store closures and lost sales.
– H&M Group’s UK sales fell 60 percent y-o-y for the period 1 March to 6 May.
– Marks & Spencer has announced a £1 billion battle plan to counter a 37 percent drop in clothing and home operating profits for the year to 28 March amid the coronavirus crisis.
– Superdry revenue dipped 19.1 percent to £705 million for the full year to 25 April, with fourth quarter performance impacted by the coronavirus crisis. However, weekly e-commerce sales have doubled y-o-y over the last four weeks.
– Under Armour reported a 23 percent drop in revenue in the first quarter, to £734 million.
– Urban Outfitters has predicted its global store sales could be down more than 60 percent in the second quarter because of “tepid” demand during the COVID 19 pandemic.
The New Normal
While things are still far from getting back to normal, shops and retailers are now opening up to an almost new world where they have to follow the government guidelines, following all necessary safety measures. Hence, social distancing, wearing masks, hand sanitizers at entry, temperature checks, etc., are the ‘new normal’ that the consumers and the retailers have to frequently deal with from now onwards.
Filled with safety concerns, the retail sector has to plan its next steps with adjusting to the new landscape. According to a survey conducted by Retailers Association of India (RAI) in association with LitmusWorld, ‘Unlocking Indian Consumer Sentiment Post Lockdown’, it sought to understand the likely behavior and shopping preferences of Indian consumers in a post lockdown environment.
– In a reflection of the new-normal, 75 percent respondents said regular sanitization of stores was their most preferred measure and expectation to feel safe and secure while shopping.
– About 57 percent said they would prefer minimal staff interaction, with 30 percent indicating their preference towards virtual trial rooms.
“With most consumers demonstrating hesitation to resume shopping in the coming months, the retail sector needs the support of all stakeholders to revive sentiment. Retailers will need to prioritize safety and hygiene measures to reassure consumers that they will receive a safe shopping experience. Despite a strained quarter, the sector will have to make investments in implementing the necessary safeguards to win back consumer confi dence,” said Kumar Rajagopalan, CEO, RAI.
Consumers have always demanded experience, convenience and speed in their shopping journey from purchasing to delivery and now, they also want a safe and “contactless” shopping environment. In this unprecedented time, it is pivotal that retailers adapt quickly to this ‘new normal,’ as well as prepare for what’s to come.
Co-existing with COVID 19
In the immediate aftermath of easing the lockdown, it is believed that consumer behavioral aspects will be playing a role. Governments have spent weeks advising consumers of the risks
of leaving their homes, and so it will take time for confidence to return, even with retailers putting social distancing
measures in place.
A recent survey by BCG Consulting stated that over 44 percent would reduce their spending at standalone stores (single/multi-brand) in order to avoid crowded places. Only limited numbers of shoppers are feeling safe shopping right now, and with no guarantees of the pandemic declining shoppers are searching for safety and comfort.
– The novel coronavirus outbreak has pushed consumers to shift their shopping habit online owing to safety concerns. In the present times, consumers are more frequently purchasing products online that they would normally buy from physical stores. According to the study by Capgemini, Indian consumers’
appetite for online shopping will increase from 46 percent now to 64 percent over next six to nine months. Hygiene is expected to be the top priority for online shoppers, with 89 percent of Indian consumers expecting to be more cautious about issues of cleanliness, health and safety post-COVID 19 pandemic. About 75 percent of the Indian consumers said they will shop from retailers adopting safety practices in stores.
– One of the best ways to increase customer comfort and safety is through allowing customers to book personal shopping appointments. This creative approach represents a cheap, easily-implemented, and scalable solution. Doing this, retailers can achieve a higher level of personto-person interaction and create a better customer experience that is required during this extraordinary time. “Shop by appointment probably looks like a reality going forward,” said Ajay Kapoor, President – Retail, Fabindia, at a webinar organised by the Retailers Association of India.
Fabindia plans to work around it, as the biggest challenge for the
retailer will be to regulate traffic to its popular stores while adhering to social distancing norms. Kavindra Mishra, MD and CEO, House of Anita Dongre also confirmed that they are getting customers to shop by appointment. “I don’t think the e-model will on work on heavy expense garments, which are made to measure. I don’t think the technology is 100 percent there yet,” Mishra said. Instead, the company wants to get into live streaming for sales.
– In order to cohabitate with the novel coronavirus, retailers will
have to adopt low-touch activities – being contactless. This will require investment in good technology, including eff ective point of sale (POS). For example, virtual reality can remove many limitations of using a physical showroom, overcoming the usual restraints and challenges of space, configuration, seasonal
communication and significant related costs. “Technology is going to be the key factor that will govern the extent of success of different businesses post-lockdown,” said Nidhi Yadav. “One of the important outcomes of this pandemic has been the realisation of the significance of blockchain as a method to maintain and monitor supply chains. Broken supply chains caused a lot of problems for manufacturers and retailers worldwide and the blockchain technology would prevent that from happening in the future.”
In Conclusion
In the current environment of financial stress and declining consumer confidence, it is believed that priority purchases will remain the focus of consumers spending and that while fashion and lifestyle consumption is deemed an essential, spending in this segment will remain muted, at least over the second half of 2020. It has also been observed that the recovery for spending on fashion will be dependent on a country’s economic recovery, in particular how oriented and successful its government’s stimulus packages are toward supporting businesses, employment and consumer spending.

Latest News

Reliance Retail’s Tira unveils luxury flagship store in Mumbai

The latest Tira store is located at India’s largest luxury mall Jio World Plaza, Bandra Kurla Complex, MumbaiBengaluru: Reliance...