The fashion market needs a reset

Mike Owen

Mike Owen argues that product information is powering a new vision for post-COVID fashion followers. 

According to most commentators, including McKinsey, the effects of the COVID-19 pandemic in the fashion industry are likely to be highly damaging and long lasting. Some apparel, fashion, and luxury companies won’t survive the current crisis; others will emerge better positioned for the future. 

Brands and retailers that do emerge successfully from the crisis are likely to be at the forefront of driving new online customer experiences, product information transparency and seamless payments and delivery. Being digital is, however, the fundamental divider in who will survive the crisis and who will not.

Almost overnight, the global fashion industry’s reliance on digital channels has accelerated faster than anyone could have anticipated prior to the crisis. This could spell trouble for department stores and speciality retail, in addition to smaller players incapable of adapting to a digital-first mentality.

The overriding thought for The Boston Consulting Group is that the fashion industry, to survive, will need a major reset to reappraise the supply chain, how it serves its customers, how it uses its stores as opposed to online, and the need to re-evaluate partnerships within the value chain.

Data will become an even more important competitive advantage: the brands with the most usable data will win. The biggest winners will be the brands that can codify data from all sales channels and consolidate it onto a single analytics platform to improve decision-making on such core processes as planning, buying, promotions, markdowns, and in-season inventory management. Creating a market-leading eCommerce platform is another part of building out a more robust tech backbone.

Much will depend on their digital and analytics capabilities. A number of trends in the post-COVID-19 world – the “next normal” – could see digital and analytics play an even more important role. Physical distancing could continue, making consumers less likely to visit brick-and-mortar stores because of ‘shopper anxiety’ and a contact-free economy could emerge – raising eCommerce and automation to a new level. Whilst McKinsey’s survey into consumer behaviours suggests that customers are migrating to, and buying more through, online channels, it is not enough to just go online, as online purchases are not doing enough to offset the loss in sales through physical stores. There needs to be a new mindset, a new vision to attract the post- COVID fashion customer, and access to accurate product information data will be key.

Shifting consumer sentiments and behaviours
Not surprisingly, In a post-COVID world, it is expected that fashion consumers are likely to spend more, particularly through mobile channels. Initially there could be a discount mentality, so brands will have to customise their product assortment, the values they place on their products and where they place them. Retailers are going to need to select how and where stores will open up, with which selection of products they offer. These could all be defined by local data and customer preferences and an omnichannel presence.

In addition, changing customer preferences will mean that brands will need to improve their supply chain partnerships and flexibility. If a brand’s reset includes a stronger push into direct-to-consumer channels, the company needs to update or expand its website – which could now cost more because every other brand will be doing the same thing, for the optimum e-tail experience. Companies also need to solidify ties with back-end manufacturers and their livelihoods, and marketplace platforms such as Amazon and Alibaba. However, it is expected that fashion brands will be able to move budget away from large-scale events into data and technology to deliver a smarter offering.

The discerning fashion customer
McKinsey, in its report on the influence of ‘woke’ among GenZ, stated that 9 in 10 Generation Z consumers believe companies have a responsibility to address environmental and social issues, just as Millennials, in the previous generation, had a green emphasis. 

As companies emerge from COVID-19 restrictions, they can expect consumers to closely examine the level of continuity across campaigns and the nature of their strategic and operational decisions, as well as their tone. Product information and messaging will therefore hold a greater importance.  

Consumers will most likely turn to cautious consumption on fashion to buy just what is necessary rather than ‘nice to have’. More information and knowledge about products will likely to be needed as it will take more to justify the purchase. 

Futurists like Doug Stephens have challenged brands to, “spend like crazy”, to use this time to reinvent how they do what they do, bringing customers new alternatives and new values, reinventing their own brand, using cross-functional teams to break down siloes and time to prioritise on customer experience and data management.

The importance of product information 
It is clear that product information and knowledge have a clear role to play in attracting the new model shopper, post-COVID. Accurate and detailed product information, visible from supply chain through to the consumer in every sales channel, will improve the customer experience.

New habits have delivered an uptick in videoconferencing. Product information management can integrate with new tech investment to enable information to be seamlessly curated for digital and wholesale showrooms. This can exploit efficient employee interaction and other applications such as livestreaming, digital store assistants (WeChat), and virtual sampling, so that product knowledge can be presented in real-time and through live interaction.

Equally, brands need to reduce supplier cost, increase flexibility and decrease time to market whilst minimising returns and cancellations. Accurate and consistent product information on an omnichannel basis is necessary to achieve these goals. Companies such as Akeneo and Sales Layer are helping brands manage product data information through technologies to create a better customer experience.

Fail fast
In a recent webinar presented by Sales Layer, Wade Eagar, Head of Retail at Facebook UK commented: “The pandemic has been an accelerator for a brand’s mid- to long-term business planning, things that were being budgeted for a five-year timespan are being executed in six months.

“Although many retailers and brands will not survive, even online, If we have learnt anything from successful online brands it is that they have a management based on entrepreneurial Millennials that are quick to innovate and have the ability to try something and ‘fail fast’". 

Eduard Pietrade of SonaeIM also added that retail needs a new approach based on people, brands, technologies and customer interaction. By resetting these elements, it would be possible to bring something different for the new customer. 

Whatever the outcome, successful companies will need to bring more trust and confidence back into the market by making product information transparent between manufacturer, brand, retailer and customer as a single source of truth, and embracing the shift online.

Brands that act quickly can give themselves a better chance of not just surviving the chaos but becoming stronger because of it.