The impact of COVID-19 on fashion retailers

As the coronavirus lockdown begins to ease across the UK and Europe, Croud has developed an insights piece which explores how the pandemic has impacted fashion retailers, what trends to look out for, and how marketers can adapt to the new normal.

Fashion in the new normal

Research highlights that there have been significant signs of retail recovery since the beginning of May, particularly when looking at online purchases. However, despite this, Google’s Mobility Data shows that UK high streets are still a step behind the rest of Europe, with footfall likely to return to above March’s numbers only by late July, or even later. There is also data to suggest that, post-lockdown, a significant number of consumers may continue to resist stores and choose to make their purchases online. To that end, it’s imperative that brands look to drive their digital activity as fast as possible. 

Additionally, as businesses begin to re-operate as lockdown eases, we are seeing competition within paid advertising begin to heat up again. For example, visits to fashion retail sites from Google PPC rose by 34% May vs April, above both the direct and Google organic traffic benchmarks. So whilst there was a brief respite between March and April, with media costs declining, by May businesses had begun their ‘return to market’ campaigns, which as we reach the peak of the summer, and restrictions have been further eased, are being accelerated. 

Another interesting consumer behavioural shift that has arisen from the COVID-19 lockdown is the opportunity to grow market share. For example, research suggests that 69% of consumers who have shifted brands during isolation, intend to continue shopping with the new brand. So this presents a genuine opportunity for brands to win market share, and recent insights suggest that those with smart acquisition strategies and compelling consumer experience will see stronger growth. 

Retail and fashion trends

When looking at key trends to consider there were three that stood out most; shifting consumer media habits, sustainable fashion and experiential fashion.

Shifting consumer media habits

Lockdown has prompted huge changes in consumer media consumption, particularly within social media. Social media platforms such as TikTok, known for its popularity with Generation Z, have seen an explosion of downloads and a considerable uptick in usage across all age groups, whilst popular platforms such as Facebook and Pinterest have suffered a decline in usage. 

However, whilst lockdown has inspired big shifts towards digital, it is inevitable that as more and more consumers come out of isolation, we’ll see this activity slow down. Therefore, brands need to shift their media investment to meet these changes and adapt to the new consumer.

Sustainable fashion

It is becoming increasingly important for consumers that brands are encompassing a growing awareness of sustainability. And with that in mind, brands are beginning to work more closely on how to make their products more ethical throughout the supply chain. Consequently, consumers are becoming more conscious of their purchasing choices, choosing ‘investment pieces’ over fast fashion items – particularly within the millennial generation. Likewise, we are also seeing a growing demand for recycled and second-hand clothing.

Experiential fashion

Prior to the coronavirus pandemic, there was a growing trend of brands looking to transform consumers’ in-store shopping experience to beyond transactions. However, as consumer behaviours shifted online during the pandemic, and with ‘at home’ solutions are on the rise, research suggests that augmented reality will considerably change the way the fashion industry creates, showcases and retails its products. The use of artificial intelligence within retail is also beginning to pick up, particularly when brands look at methods of personalising the consumer experience

However, with many consumers now holding off returning to stores, and some brands even looking at not returning to stores at all, in-store brand presence appears to be somewhat out of sync in retail. So it’s important that brands looking to continue their bricks-and-mortar presence have identified what the new role of the store is, and how they can evolve the in-store experience to align with the consumer experience offered online.

As we begin to acclimatise to the new normal, there will inevitably be further shifts in consumer behaviour and industry challenges to tackle. However, it also presents a big opportunity for brands to focus on creating a seamless digital experience for consumers. By leveraging technology and data analytics to build an effective ecommerce strategy, online retailers can not only engage with their customers in the current moment, but they can also develop the agility to react to future changes and opportunities.

You can discover more insights about the changing fashion retail landscape in Croud’s trends report  The impact of COVID-19 for online fashion retailers. If you have any questions on the report, or about how Croud can help, get in touch.

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