Fashion’s Guide to Navigating the 3 Stages of a Crisis: Panic, Stabilisation & Recovery

Fashion’s Guide to Navigating the 3 Stages of a Crisis: Panic, Stabilisation & Recovery

Written by Phung Yi JunApril 6, 2020

Fashion’s Guide to Navigating the 3 Stages of a Crisis: Panic, Stabilisation & Recovery

The impact of the Covid-19 pandemic has been compared to the 2008 recession, although the reality is likely to be much worse. Like the recession, financial shocks in the economy are evident in the age of the coronavirus, severely impacting consumer spending and demands. Layoffs, pay-cuts and furloughs occurred then, as they are now. But the recession wasn’t a healthcare emergency. Travel was still permitted; manufacturing and operations for retail stores could still resume. The current pandemic paints a bleaker future. 

Covid-19 Fashion Retail Dashboard

At the time of writing, the number of infected patients in the US, Spain and Italy has surpassed China’s figures, with Germany and France following closely. Preventive lockdown measures have been implemented, and global brands and retailers are forced to shut down operations. Offline has taken the biggest dent, as footfall has plunged, with sales expected to drop between 25% and 35%. Store closures have caused retailers to cancel orders, leaving brands with mounting stock to clear. From luxury group Capri Holdings to fast fashion’s Inditex, estimated losses have already been reported. 

But for most crises, like the 2008 recession, there is a lifecycle. It unfolds over time: from panic, to stabilisation, and finally, to recovery. As dark as the retail gloom is, there is light at the end of the tunnel. 

From Panic to Stabilisation

In Greater China, a new sense of cautious normalcy has returned. The quarantine has been lifted, as most stores and factories resume operations. Appetite for fashion has quickly risen as well, with China’s Ministry of Commerce reporting that sales in department stores have recovered to about 50% of the same period last year. Nike, too, shared positive news as sales in China, Hong Kong and Japan stabilised. Meanwhile, in South Korea, sales programmes are up and running

It’s important for brands and retailers to not only monitor the situation closely, but also to plan for every stage: panic, stabilisation, and recovery. Even during the panic-to-stabilisation phase, as shown by China’s resiliency and innovation in Shanghai’s Online Fashion Week and JD’s delivery by drones, windows of opportunities will emerge. 

A still image from Shanghai’s Online Fashion Week. Image Source: South China Morning Post

Let’s take a look at how fashion brands and retailers can prepare themselves at every stage. 

The Panic Stage

The panic stage is where industry leaders scramble to understand the complexities of the challenges ahead, as a flood of problems surface.


An empty shopping mall. Image Source: Unsplash

As the coronavirus situation has worsened, uncertainty looms across the globe. Brick-and-mortar stores can no longer operate, leaving traditional retailers in the dust. A decrease in spending and reduction in the average basket have been reported. For safety concerns, work in manufacturing has had to be paused, disrupting supply chains across each tier. This means fashion retailers have to alter existing line sheets and create contingency plans. Employees also needed to find new ways to communicate and run operations remotely for social distancing. 

Best Practices

During this stage, it’s imperative that retailers pay attention to consumer shifts. This not only surfaces your brand as a leader in the market, but also ensures cash flow through turbulent months. 

The first change, with offline store closures and social distancing preventive measures, is naturally, the shift to online. As consumers are confined to their homes, time spent online will indefinitely rise. Consumers across the globe, including in China, Italy and India, have reported that they’re using e-commerce more frequently. To ensure business continuity, fashion retailers must quickly move stock online. Diversify sales channels for greater visibility and distribution.

Kate Ng, Omnilytics’ Retail Strategist, shares how to diversify sales channels during the pandemic.

Next, existing inventory plans (especially for Spring/Summer 2020 and Autumn/Winter 2020) will need to be refreshed, depending on consumer wants and needs. A seasonal approach to fashion is less important now. 

Merchandisers and buyers must identify current styles that are in demand, as well as styles that can be pushed for later seasons. The right messaging is of crucial importance here – be in constant communication with consumers to provide reassurance, as emotions are still turbulent. Avoid pushing products that come across insensitive in today’s climate, such as party dresses or high heels. Ideally, offload these styles immediately. 

Instead, focus on products that have the best margins. Merchandisers need to account for further discounts when buying and setting a price. Products typically do not sell out at 100%, and with consumer demand at an all-time low, it’s challenging to get sales. Building in room for promotional activity will help to conserve cash in the coming months, until the situation stabilises. 

The Stabilisation Stage

This is where strategic planning is set, leaders communicate it, and sales slowly begin generating revenue again in response to the industry’s immediate needs. 


At the stabilisation stage, the selling season is likely to shift and wholesale will be reinvented. Andrew Keith, president of Lane Crawford and Jones, believes that this crisis reinforces that speed isn’t key – it’s accuracy. “We should look at having the very best product when it is available and not at how we fill floors of department stores and get as much product on marketplaces,” he shares. 

E-Commerce is one of the most resilient channels, and will continue to be – even when offline stores re-open. Menswear designer Feng Chen Wang has chosen to prioritise online sales after witnessing how fragile the traditional wholesale model is. Chinese brand the Labelhood is still using livestream to connect with consumers even though offline operations have reopened. 

Covid-19 Fashion Retail Dashboard

For some retailers, especially multi-brands retailers, cash flow will need time to return to normal. Spending will ramp up, but it’s crucial for brands and retailers to not go overboard. More importantly, consumers are still reeling from high anxiety. Treating them just as sales figures will do more harm than good.

Best Practices

Watch the market closely. At the stabilisation stage, consumer demand will shift as well. Sales will slowly pick up, and brands must be ready with the right products to satisfy immediate needs – whether it’s for consumers or the retailers when they’re ready to buy. 

But Amelia Teh, Head of Business Intelligence at Omnilytics, reminds us to exercise caution even when there are signs of pent-up consumerism. “Even when consumer confidence returns, the road to full recovery will take time. Keeping a tight assortment is recommended in this pivotal shift, and replacing trend-led items with transitional designs.” 

It’s the perfect time for brands and retailers to monitor products closely, and to be proactive in searching for what consumers are looking for. Account for new delivery and shipment timings too.

Barry Ooi, Omnilytics’ Director of Fashion, shares how to identify current demands.

Above all, foster ongoing communication with consumers and ensure there’s a human touchpoint at every stage. Yes, consumers are more willing to spend, but the need for connection is still present as physical communication remains limited. Use this opportunity to find creative ways to engage with consumers.


The last stage is where the situation returns to a new normal, but with lasting changes that will impact retail forever. 


Recovery is a fast-track version of stabilisation, where operations return to full capacity and consumer demand is unwavering. The adjusted strategies and repaired sourcing and supply chains will deliver new merchandise to the market. 

But as the world settles into a new normal, consumers and businesses will find themselves in an entirely different landscape. 

The way fashion operates will change. The pandemic has proven that staff can work-from-home effectively, virtual showrooms are possible and e-commerce is more important than ever. Business models, if they haven’t already, will see a transformation. 

Best Practices

Brands and retailers that did their homework in the Stabilisation phase will see an uptick, as they’re positioned correctly for the rise of consumer demand. 

While consumer behaviour will constantly shift, what remains is consumers’ focus on values. By this stage, consumers will have a clear idea of which brands and retailers they will continue to support, based on prior communication strategies. Continue the effort to talk with consumers, not driven by the need to sell, but the need to stay connected. 

Omnichannel will be prioritised once more, but this time, e-commerce will take the lead. While the offline experience is irreplaceable, the health emergency has shown the industry just how important innovation is. 

From AR technology to digital networks, leverage of technology is greater than ever – and retailers must not only integrate it into current processes, but put it at the forefront. Break down the day-to-day tasks, such as buying and trade meetings, and compare the effectiveness of how these were done pre-Covid-19 and during Covid-19. Adopt new methods of working that speed up the journey. 

Build Resilience 

Plan accordingly by identifying which stage of the crisis you’re in – this way, you’ll not only survive the pandemic, but emerge as a market leader. 

Kendrick Wong, CEO of Omnilytics, echoes that “times like these call for transformative actions. Create new values for your team, prepare solutions to deter external impacts, and most importantly, build resilience through this crisis and beyond.” 

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