The year 2020 is probably the worst ever for many: COVID-19,
social movements, terrorism, populism, hurricanes and wildfires. You may have
lost a close friend or a family member, or lost your job or closed your
business while fundamental freedoms were limited. This is a different crisis
and socioeconomic consequences are still uncertain. COVID-19 cannot be compared
to the flu pandemic of 1918. It has changed our world: the way we work,
socialise, learn, shop and dress. computersmarketing
It is the year of retail purgatory. Some will survive,
others will not. This is not about what business strategy to implement but how
to run a business in a new era; a new way of facing existing and coming
challenges. Vaccines give us light at the end of the tunnel and retailers will
have to adapt to a new ecosystem. hollyhealthfitness
Challenges for apparel retailers will vary depending on
brand positioning, style, customer segment, product categories and life cycle.
The pandemic-induced crisis will accelerate adoption of new digital
capabilities across the value chain. healthbeautystudio
According to the latest The State of Fashion report (BoF
& McKinsey. 2021), fashion sales in China are expected to recover in 2020,
while recovery in the United States and Europe lags. If we stay positive and
take the earlier recovery scenario from McKinsey, recovery would be achieved by
the third quarter of 2022. China sales growth are expected to grow by 5-10 per
cent compared to 2019, while Europe would see lower sales down to 2-7 per cent
compared to 2019 as well. The United States will experience a similar
trajectory with sales down 7-12 per cent in 2021 compared to 2019. webtechgalaxy
As mentioned, the global economy is projected to recover in
2022 and most fashion retailers are expected to recover in 2022-23. These are
some examples from equity research firms that show the impact of the novel
coronavirus on sales, earnings before interest, taxes, depreciation and
amortisation (EBITDA) and net profit as well as its 2020-22 period
forecast According to Deloitte's Global
State of the Consumer Tracker, consumers have been deeply affected by COVID-19.
On an average across all countries in the survey, 30 per cent respondents
expressed concern about making upcoming payments. Only consumers in China,
where lockdown measures were eased before the rest of the world, seem more
inclined to increase their spending on discretionary goods, particularly
apparel and clothing (26 per cent), according to Global Powers of Luxury Goods
2020.
Retail consumer behavior has also changed. Rewards app
Shopkick surveyed more than 14,000 Americans to gain insight into their buying
patterns, and there are some notable generational trends. For one, 55 per cent
of Gen Z consumers say they will shop more frequently at retailers or brands
that align with their core values in 2021. On one hand, consumers are shopping
with demand for local, sustainable and value brands rising, while on the other,
more and more fashion brands are influencing in politics and culture while
adapting its store formats.