From Crisis to the Next Normal: a Glimpse of the Future of Fashion Retail

What we learned from round table conversations with professionals from the fashion retail industry.

When the pandemic forced us to cancel events we had planned, we decided to set up a series of virtual roundtables. We wanted to provide our members and other professionals with a platform to connect and discuss their worries, thoughts and ideas. Throughout the lockdown weeks, we were happy to welcome professionals from around the world to our round tables, including buyers, entrepreneurs, production managers, marketing professionals, consultants and other experts in their fields.  In an atmosphere of openness and collaboration, they were able to talk about the issues they were facing, their strategies to keep their businesses afloat and thoughts about how the retail industry could come out of the crisis stronger and more resilient. 

This is what we learned:

1. The colossal global fashion system is a house of cards 

As lockdowns were put in place around the world, almost every company along the value chain was hit. Starting with production factories in China that couldn’t deliver, to retail companies around the world that saw consumer demand fall to almost zero overnight. In most western countries, retailers worried about their inventory as well as their cash flow, while government support systems helped to ease the pressure of maintaining employees. The main concern, for those around our virtual tables, were for employees in Asian production companies. With retailers asking to halt orders or renegotiate payment terms, factories in these countries were hit hard, putting at risk the livelihoods of workers already living in fragile economic conditions.

We need to slow down the system,” urged one participant. With the fear of companies discounting even more heavily than they did before, thereby decreasing perceived value of fashion and increasing pressure to reduce costs of production, the participants unequivocally said that the system needed to change. In the past weeks, we have seen an increasing number of designers , brands and industry bodies call for an overhaul of the fashion system, with a review of the fashion calendar and more care for the environment. Whether this will happen universally remains to be seen, though this pandemic has opened an important discussion.

2. “We’re in this together”

Although we cannot speak for everyone in the industry, the professionals at our table talked about the (surprising) solidarity they felt was present among people and companies in the industry. Leaders of production companies spoke about how most of the buyers they worked with were transparent in sharing their challenges and tried to minimize losses for the factories. Buyers, both from the luxury sector and fast-fashion brands, echoed that they were trying to avoid moving their struggles to others down the value chain. Large and small companies around the world stepped up to the plate to shift their production lines to produce protective clothing, masks, sanitising agents and ventilators. Others provided free clothing, shoes and even wedding gowns to those on the frontline. 

While there are losses all around, and the climb back up to financial sustainability will not be easy, there is reason to believe that more companies will seek to do business differently than previously. Many saw more clearly how their role in society was more than one driving an economic consumption system, but one with responsibility towards their employees, customers and society as a whole. 

3. Companies with a purpose fared better through the crisis

At our tables we had several managers and owners of companies built on principles of sustainability, offering different types of products and services. Interestingly, all of them said that they managed to do relatively well through the lockdown weeks. Those with online platforms told us about how new consumers found their way to their websites, attracted by the local and sustainability offering. For their marketing, the companies with engrained social and environmental practices realised that they could continue communicating truthfully and authentically about their activities and offering. Consumers were eager to support the companies giving back to society in one way or another.

4. A call back to local

From food to fashion, consumers-that-could sought to support their local businesses. New social-media groups sprung up, bringing to light small and medium enterprises that could deliver groceries, meals, or other products. Where large chain stores had to count on online sales, owners of local stores could be contacted by phone or messaging to purchase products. With borders closed, and delivery times uncertain, consumers sought to buy closer to home. Small companies stood up to the challenge, using the flexibility that comes with being small, to showcase and sell their offering in different ways: from the store owner in Amsterdam who brought curated bags of clothes to her most loyal customers to try at home, to the one who patiently talked on the phone with a 75 year-old customer who had never yet bought anything remotely.

In a different way, on the supply side, buyers also indicated that to mitigate risks towards the future, they would look into options to purchase closer to home. This would allow them to collaborate more closely with producers, order smaller batches and be more flexible in putting together their offering. 

5. The fast-track rise of digital

The crisis accelerated the adoption of digital tools in an unparalleled way. Consumers flocked to online stores for all types of purchases. Companies that weren’t yet particularly active online had to quickly find ways to meet their customers there. To meet the demand quickly, businesses took to adopting the utensils they had at hand; social media and messenger tools became trading platforms.

And, on the ‘back-office’ side, digital sprung up too: from webinars, to online fashion shows and product presentations. With travel likely to take a while to pick up again, buyers are preparing to see even more activities happening via digital channels. Trade shows are likely to bring part of – if not all of – their activities on-line. Brands will have to find ways to present themselves and their products using online tools also. The crisis showed us that the digital world offers many opportunities that will continue to blossom in the coming years.

6. What the future holds is unclear, but there are opportunities ready to be picked up

There are those that claim that once we come out of virus fears altogether, consumers will go back to their formal spending habits. Others – more idealistic – think that the lockdown weeks provided consumers with new perspectives on how to live, consume and work differently. Reality will probably be somewhere in the middle. “With their higher disposable income, luxury consumers are likely to continue purchasing according to their newfound values”, said one participant, “while those under financial pressure will have to choose for discounted or low cost”.

What we noticed is that professionals clearly saw the fragility of the industry and the necessity to approach business differently. As we get out of pandemic crisis, the social issues in the industry haven’t been resolved yet, and the environmental crisis still looms on the fashion industry. Rather than being pessimistic about the future, the round table conversations we held gave us hope that a better future is possible. A new normal whereby brands with embedded social and environmental sustainability goals fare better, digital tools are leveraged to improve business models and processes, and companies seek to collaborate more closely to share both risks and successes with their partners.

Good Brand Guru is a network organisation seeking to enable knowledge sharing among fashion professionals and sustainability experts. Through our different activities and events, we enable our members and other professionals to stay ahead on what is happening in the industry, learn, share their experience, and connect with others in the industry. If you are interested in joining our network, please get in touch