How Will Coronavirus Impact Eid 2020 Retail?
For modest-wear brands, Eid is a critical period on the fashion calendar – set to take place on 23rd May this year following Ramadan. Sales during this period contribute to 30% or more of modest-wear brands’ yearly revenues. But the coronavirus has left a huge dent on the fashion industry, affecting every aspect of retail from the supply chain to distribution channels.
For the brands that depend on Eid for sales, the stakes are even higher.
Eid clothing largely consists of ethnic wear, and is particular to the culture and tradition of a specific country. This is why homegrown brands are the go-to for Eid shopping, which is the case in SEA countries like Malaysia and Indonesia. For many years, bespoke tailoring took precedence in these countries, but recently, ready-to-wear collections have surged in popularity.
In the Middle East, Eid marks a lucrative season for both local and international brands. Mango, Cos and Oscar de la Renta have created Eid capsules in the past to meet the demand for newness during the festive season. However, closures of malls – a major hub for Eid shopping – forces brands to explore other sales avenues.
The seasonality of Eid attire makes it difficult to remarket as consumers only wear their items for Eid, weddings and other traditional events that are few and far between. Additionally, Eid trends change every year – top styles and colours this year may be irrelevant by the next.
In the climate of the coronavirus, this year’s Eid could be a costly missed opportunity for many brands.
Impact on Eid Collection Launch Timing
In Southeast Asia, the launch strategy for Eid is homogenous for most brands. They tend to launch at the same time each year – mirroring the evolving consumer psyche as they edge closer to Eid. Brands tend to launch their collections in the month prior to Ramadan, the fasting month before Eid, as the excitement builds.
With lockdowns in place throughout the region, demand for Eid attire is called into question. The ban on key events in the month of Ramadan has dampened consumer morale. The threat of lockdowns extending until Eid casts further doubt. Some brands have adjusted their launch strategies to coincide with a demand resurgence, while others are minimising risk by getting a head start.
We’ve analysed the market movements in Malaysia and Indonesia in comparison to previous years to determine how coronavirus has already impacted Eid trading.
In Malaysia, the Kurung made up the largest portion of Eid assortments. Rizalman for Zalora and Ezzati Amira are some of the most anticipated ready-to-wear collections by two top designers in Malaysia. Their ready-to-wear assortments have consistently grown in recent years, but that growth has been stunted. Both brands’ new-ins narrowed down, by 8% and 33% respectively this year compared to the same period in 2019.
Other prominent Malaysian brands, Mimpikita and Afiq M have yet to launch their Eid 2020 collection, a rare occurrence compared to past years.
Malaysian brand Poplook’s new-ins for Eid increased by 146% this year while Jovian, NH by Nurita Harith and Zalia saw a spike in new arrivals.
It’s possible that these brands planned to release their 2020 collection in intervals, as they did in previous years. A surge in volume of new releases this early in the season indicates that the brands are trying to extend their selling window. After all, there is still a lot of uncertainty surrounding the duration of the movement control order in Malaysia. The general consensus is that once consumers are no longer housebound, the demand for Eid attire will pick up again.
However, if it extends up to the end of Ramadan, brands that launch then would have a limited selling window. Which is why Poplook, Jovian, NH by Nurita Harith and Zalia are reducing risks by launching Eid collections now.
Omnilytics detected that the Kurung style has been trending in the Ethnicwear Sets category, indicating that demand for Eid attire is on the rise. Brands that launch now will be better positioned to capitalise on this trend.
In Indonesia, Kaftans dominated Eid assortments over Tunic and Gamis. Omnilytics uncovered a similar shift in the brands’ launch strategies. The new-in counts for Chic Simple, Icons and Luire by Raden Sirait soared in comparison to last year, effectively expanding their selling window.
Meanwhile, several brands have opted to delay launches or reduce their assortment size. Similar to neighbouring Malaysia, disruptions from the pandemic have raised doubt about demand in Indonesia and are a concern for many brands.
Additionally, mid-season sales are currently taking place in Indonesia, with some brands holding back on Eid collections to offload existing stock.
Omnilytics’ Country Manager for Indonesia, Caroline Lie, advises, “At this stage, brands should temporarily halt all clearance sales to make way for Eid products to not detract from newness. Items allocated for mid-season clearance can instead be combined with Eid sales, an event taking place much later in the fasting month”.
While demand is lower than in prior years, it does exist. Omnilytics observed Kaftans trending in the Ethnicwear category, as depicted in the chart below.
Key takeaway: Uncertainty surrounding demand for Eid attire brought on by the pandemic has upset the launch strategies for several brands – resulting in delayed launches and reduced assortments.
Brands that can only launch later on in Ramadan will need to activate promotions immediately as the selling window will shrink. Launching now is ideal to maximise the selling window and capitalise on newness.
Having visibility on trends in the market creates an advantage for brands to react quickly and align with consumer demand
We’ve analysed the key strategies adopted by businesses and outlined the next steps brands can take to mitigate the effects of coronavirus on retail.
Omnilytics detected two opposing approaches to pricing strategy as adopted by brands, in response to the Covid-19 impact on consumer demand.
- Brands with large assortments reduced prices in order to stay competitive at a time when demand is scarce.
- Gene Martino and Inhanna are two of the few Malaysian brands with increased YoY new-ins, with 100% and 230% increases respectively. For their Eid 2020 collections, both brands have launched at reduced prices.
- Indonesian brand Icons, known for producing kaftans, lowered its median price by 35% to maximise sales for a wider assortment this year compared to last year.
- Brands with lower intake this year, have raised prices to compensate for the limited stock.
- Yans Creation and Ezzati Amira in Malaysia have increased their median prices by 14% and 22% respectively.
Key Takeaway: Brands adapted pricing strategies in accordance with the stock on hand. Those with wide assortments decreased prices to remain competitive, while brands with limited stock resorted to price increments to maximise margins.
Brands should avoid tweaking pricing too much as it could damage consumer confidence and impact brand positioning. Instead, opt for creative promotions and tactical discounting to move stock.
Part of typical Eid trading involves discounts that become progressively deeper as Eid approaches. Normally, brands would only start to impose markdowns during the fasting month itself, usually at the tail end of Ramadan. In the unprecedented situation brought on by Covid-19, some brands have had to adjust their discounting strategies.
Malaysian brand Amar Amran’s discount strategy took a turn this year. At this period in 2019, the brand imposed minimal discounts on Eid products. In comparison, roughly a third of Amar Amran’s new arrivals for Eid 2020 have already been discounted. This shift in strategy is likely a mitigating effort to simultaneously satiate demand and prevent overstock, as the brand’s SKU count nearly doubled this year.
Chic Simple’s strategy is discounting a month before Eid to generate sales as Eid shopping heightens during that time period in Indonesia. This year, most of its Eid new-ins are already on markdown, far earlier than usual.
The chart below depicts the items that went on discount in 2019, compared to the same period in 2020. Last year, the brand slashed its prices in other categories to make way for its Eid capsule. This year, its Eid capsule entered discounting soon after launch.
The effects of Covid-19 on consumer demand led to Chic Simple adopting a more aggressive discount strategy to drive sales.
Key Takeaway: Markdown strategies have strayed from the norm this year as brands are forced to put new Eid arrivals on discount to increase sales due to uncertain demand.
Brands that resort to discounting should do so tactically, by prioritising slow-sellers and items with higher margins.
The impact of Covid-19 on Eid has also extended to marketing communications. Brands are increasingly encouraging consumers to stay at home, while promoting their online channels on Eid shopping. Malaysian brand Inhanna’s landing page is decked out with information such as its free returns policy to ease the minds of consumers as they shop online.
Brands are also practising transparency by notifying customers of possible delays in shipment of products. Multi-label online retailer Fashionvalet took this measure on both its homepage and Instagram account.
In the Middle East, brands are doubling down on amplifying online presence by connecting with consumers on social media platforms like Whatsapp and Instagram. In Southeast Asia, brands and retailers have taken to social media to boost engagement too. E-commerce retailer Zalora encourages the use of its hashtag #zaloraya2020 to generate online interest.
Key Takeaway: In an effort to encourage consumers to shop online, brands are reassuring their customers of a seamless shopping experience. Transparency is becoming the norm, and brands are increasing their online presence to foster engagement.
Eid al-Adha or Eid Qurban, is one holiday other than Eid, that is also celebrated in a big way by Muslims and will take place in July this year. Brands that have yet to launch Eid collections can leverage on Eid al-Adha instead.
The impact of the pandemic on Eid trading could prompt brands that specialise in Eid apparel to re-strategise and review their business models, such as branching into ready-to-wear collections.
Key Takeaway: Brands that missed out on this occasion have the opportunity to bounce back during Eid al-Adha.
The current situation presents an opportunity for brands to review their business models and consider branching into ready-to-wear collections.
Be Prepared, With Retail Intelligence
While key events are disrupted, fashion brands and retailers cannot be complacent. It is now more important than ever to keep tabs on their competitors’ actions in order to remain competitive and adapt strategies swiftly.
The Omnilytics dashboard allows brands and retailers full visibility on market performance and helps to validate decisions – trend, assortment, pricing and discounting.
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