How Fashion Merchandising is Evolving Amid Covid-19 Concerns (Bonus Video)
As the Covid-19 crisis continues to wreak havoc on the fashion industry, its professionals are anxious about the pandemic’s effect on fashion consumption. Declining footfall, extended store closures and depleting inventory are inevitably forcing merchandisers to pivot their line sheets, leaving many unsure of their next move.
However, it’s a common misconception that shopping in the current climate has halted completely. While physical retail is facing a downturn, this has proven untrue of e-commerce as data shows online activity is high with sales remaining stable or, even experiencing an increase.
A shift in priorities
Online multi-retailers and marketplaces have significantly benefited from the lockdowns as the majority of non-essential shopping moves online, revealing unique opportunities within retail.
Zalora, for example, is one of the biggest fashion e-tailers operating in Southeast Asia, a region that is greatly affected by the virus. Data observed from the e-tailer’s performance in Singapore shows sell-out for men’s tops is up by 3% this month compared to December last year, at the peak of the holiday season.
Zalora’s consumer behaviour has also shifted as a result of the pandemic. With staying at home becoming the new normal, demand for more casual categories like loungewear and sportswear have increased substantially. Further analysis of men’s tops exhibit sell-out for t-shirts has topped the category at 33%, outpacing previously strong sub-categories such as shirts and polos.
For merchandisers, this evidence indicates casualwear is driving the current demand. Stock relating to loungewear, lifestyle and sportswear should be prioritised, while new product launches in occasionwear should be redirected or prepared for markdown. Heavily seasonal products should also be pushed to a later date if inventory starts to run low.
At this stage, it is critical to assess existing inventory and incoming stock on a granular level. Line sheets will need to be reevaluated to ensure they are aligned with new category shifts. With supply chain disruptions potentially delaying future launches, staying in-tune with the current market changes and reacting immediately is the best way of stabilising this crisis.
Catching the inflection point
Experts agree the shift to e-commerce will likely be permanent beyond the pandemic. Market conditions will not return to pre-crisis levels in the immediate future, especially for brick-and-mortar. For more digitally native companies, this period has reaped large returns. Online marketplaces such as Farfetch, JD.com and Tmall have remained largely unfazed by the situation, even continuing to launch new partnerships amidst the crisis. Pent-up consumerism or ‘revenge spending’ will spike once the crisis is contained and consumers regain confidence. This has already been reflected in China where the market is in recovery.
As the situation continues to evolve, merchandisers will need to monitor how other retailers are responding and look out for future product innovation or expansion into new categories or capsules. For more localised businesses, studying how mass retailers are responding to the crisis will give indications on the best contingency plans to activate for that market.
Many international retailers are deploying markdown strategies as a means to sustain cash flow and drive consumer appetite. Zara Singapore, for instance, started to put more products on discount in January, at the beginning of the outbreak, while simultaneously scaling back on new launches compared to the same period last year. The number of new-ins launched in February is noticeably lower compared to other months in 2019.
Getting back on track
In light of the Covid-19 pandemic, merchandisers will need to think creatively to tackle the challenges at hand. Crafting a robust merchandising strategy with variable elements to prepare for various scenarios will ensure business continuity. Constantly analyse and validate your assortment strategies against market insights and competitors to spot areas of opportunity to act on. Find out what other steps and action plans you should be taking in Omnilytic’s latest report, Fashion Retail and the Covid-19 Crisis.
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