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Will Shopping Ever Be The Same?: The Impact Of COVID-19 On Fashion Retail

by Svenja Solveig Pleye

The retail industry regularly faces new challenges. However, COVID-19 has been a disturbance of immense magnitude that no one saw coming. As an unavoidable consequence of the global lockdown, all stores had to close, causing a high level of chaos and uncertainty. While preliminarily small businesses were worst affected, as time went by, even big retailers such as H&M suffered a sales decline of 57 percent within the second quarter of 2020. Thus, leading to countless international store closures. Also, the luxury fashion industry had to register immense losses from which they aren’t expected to recover from before late 2022 or 2023, according to analysts at Bain & Company. After all, while other brands can shift to online retail, luxury brands are limited by maintaining an appropriately exclusive image.

As stores are opening back up again, it’s still in the stars whether offline shopping will regain its pre-pandemic popularity. After all, shoppers got used to the convenience of purchasing by a simple mouse-click without leaving their homes. However, fashion should be exciting and shopping fun. Can you even speak of a shopping experience if you’re not able to immerse yourself in the world of each brand and engage with them by visiting their stores? Thus, the question arises whether fashion shopping post-pandemic will ever be the same and what changes retailers have to implement to stay relevant.

Therefore, I have brought in five experts to share their thoughts with us on the changes they experience due to the pandemic and how they see the future of fashion retail:

Alia Almarri – Marketing Intern / Former Marketing Manager at The Dubai Mall:

”We [Alia and her marketing team] were heading into an exciting Q1 in 2020 when we quickly started to realize that the world is shutting down due to the pandemic. Thankfully, as a company, we were already aiming towards a digital transformation with plans to implement these strategies in the next few years. However, we immediately applied them, and shifted our focus to converting the mall into an e-commerce website, and revised our marketing strategy to become more engaging rather than promotional until we can open our doors again. What we learned from the pandemic is that the collaboration between retailers and mall owners shouldn’t just be a transactional approach but a partnership model where both parties can have a supportive relationship. We also have seen how digitalizing the industry in all aspects of the value chain has been cost and time-efficient. Now that we have overcome the pandemic, visitors want to have face-to-face interaction and are rushing back to an in-store retail experience but with the option of applying a hybrid model that includes online shopping. We have seen a rise in brands reinventing their stores and investing in experiential retail, customer engagement, and personalization.”

Alia mentions a crucial point: quick adaptability. When the mall had to close, she and her team realized the demand for a digital marketing strategy and have implemented it as soon as possible – albeit ahead of schedule. She now predicts a hybrid model, including a more engaging and more personalized store experience.

Christina ParathirasAssistant to Vice President at Etho Maria Haute Joaillerie:

”During the pandemic, all businesses faced major challenges in their marketing strategies. They had to make a total shift from traditional to digital media in order to cope with the new reality and to find a way to reach and attract their customers. However, this pandemic will truly never be over so all businesses need to make new operating standards and embrace them as a new normal.

Specifically, the luxury fashion industry faces major challenges as a wide variety of its clientele are older people that don’t have the knowledge and proficiency in using social media. So brands need to go that extra mile to find a way to reach their customer. Finally, high-end companies need to make an effort to create digital content that will really amaze and embrace the customer that is looking at it. For example, digital fashion shows need to be conducted in a manner that will complement the products showcased in the most luxurious way so that they can ensure that the customer will remember the product and will visit a store to make a purchase. So the post-pandemic reality for the fashion industry will involve creating unique and luxurious experiences for customers.”

Christina makes a great point that the changes in the retail industry have to be sustainable rather than temporary, and have to be considered as such. Furthermore, she sees it as one of the main challenges of the luxury industry in that the predominantly older clientele isn’t familiar enough with digital media. Ultimately, brands will have to put their heart into providing an all-around appealing shopping experience.

Sarah CherresMarketing Strategist and Educator:

”There were indeed differences at the core of the fashion industry pre and post-pandemic. Considering that the world came to a halt, there was a shortage in the workforce, which included overseas manufacturers. This deficit greatly affected production, distribution, and logistics. The fashion industry and luxury brands also had to adapt. One area to pivot was fashion weeks. Luxury brands like Louis Vuitton, Armani, and Dior all adapted by hosting audience-free fashion shows.

From luxury to fast fashion, the effect of the pandemic also appeared in clothing and retail trends. With many working remotely, trends shifted from aesthetics to comfort. Loungewear and slippers became best sellers. In retail, the tendency will likely be hybrid moving forward. Shoppers will continue to take advantage of the convenience of online shopping but combined with the interaction of the in-store visit — a perfect blend of the pre and post-pandemic shopping experience.”

As an expert in her field, Sarah identified the various parts of the fashion brands’ strategies that had to pivot due to the pandemic. Also, as she aptly points out, the pandemic hasn’t only changed trade, but also set new trends. Because people had to stay at home, loungewear experienced a huge comeback and became suitable for everyday wear.

Prof. Dr. Audrey MehnVice President at International School of Management / Retail & Sales Expert:

”The pandemic has demonstrated the importance of digital channels. Retailers with a customer-oriented omnichannel marketing strategy have been able to pursue their relationship with their consumers during the pandemic. Brick-and-mortar retailers without any digital channels had to accelerate their digitalization ambitions.

Even if online sales have increased since the pandemic, the physical store will become much more the point of experience and will remain for many customers the first destination for shopping, especially for luxury retailers.

In addition to accelerating digitization, the pandemic has had a positive impact on other issues in fashion and luxury retail: sustainability, work-life balance of employees, improvements along the supply chain, etc.”

Digitalization, as Audrey stated, has become an essential part of every good brand strategy. However, it has to be implemented as an omnichannel approach. Also, she mentioned a crucial insight: The negative consequences left aside, the pandemic has spawned positive trends such as work-life balance and rising awareness and demand for sustainability.

Kerstin LehmannRetail and Consumer Strategy Advisor / Partner at EY-Parthenon:

‘’Covid-19 has not so much fundamentally changed fashion retail and consumer behavior but accelerated several trends that already existed before. The most prominent example certainly is the fast-tracked shift towards the online channel. With that comes the need to rethink store portfolio footprints and define new roles for stores for an omnichannel retailer. But also trends like the concern for sustainability, the need to be closer and more relevant to consumers, or the importance of customer participation have been around for some time but saw a boost during the last 18 months.

What the pandemic has changed, however, is that (mostly omnichannel) fashion retailers have finally realized the need to actively tackle these trends. Pre-Corona, too many retailers – albeit knowing about the necessity to eventually adapt and change – still was reluctant to move and hoped that a friendly market would provide enough growth. Many of those have been hit hardest by the pandemic. Covid-19 thus will have a large impact by structurally changing the competitive landscape.’’

Even though Kerstin says that there are hardly any fundamental changes to report, she does see a positive change in retailers’ willingness to act. After all, the pandemic has forced even the last ones to adapt to digital change and emerging industry trends such as sustainability. Now the individual implementation of the retailers will determine success in both online and offline commerce.

The Future Of Fashion Retail

No retailer could survive the pandemic without implementing digital offerings, whether it’s an online shop or online fashion shows. Now it’s the degree of adaptability and quality of the implementation that will determine future market success. After all, only the ones that showed commitment and adaptability survived. As for offline shopping, all my experts agree that as the world is adjusting to a new normal, consumers will return to engaging with their favorite brands face-to-face. However, some requirements have to be met such as a well-implemented hybrid model in form of an omnichannel strategy as well as an experiential store design. After shoppers have been forced to stay at home, they are thirsting for a personalized shopping experience where all their needs are catered for. 

‘’Customers are thirsting for a personalized shopping experience where all their needs are catered for.’’

In addition to an optimized store design, something has to change sustainably about the supply chain. Sustainability is also exactly the right keyword here. The global production facilities closures have caused delivery issues and product shortages. Furthermore, a recent McKinsey study revealed a growing customer demand for sustainability in fashion. Thus, circularity could be the next big thing in the industry. By implementing this model, resources could be used to their full potential before finally being recycled. This could relieve the supply chain and at the same time help retailers adapt to meet customer needs.

Shopping might not be the same anymore, but that doesn’t have to be a bad thing. Maybe we all just have to prepare for a new retail experience, and be ready for all the changes that come along with it.

Did this post get you excited and craving for more? – Stay tuned for next week’s post where you’ll learn another interesting facet of the world of Fashion Marketing.

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