The December fashion industry news selection
Bright outfits, fitness classes and warm trousers: Fashion Business Success and Failures in 2020
With Christmas around the corner and the UK still in the throes of lockdown, festive eCommerce has won out in comparison to high street shopping. According to research by ShopperTrak, physical footfall in the stores is down 29% on what it was in 2019.
2020 has seen a decisive channel shift to online retail. Although it was inevitable this would happen over the next few years; it seems COVID-19 has played a large part in speeding up the process.
In this final round-up of 2020, we’ll be looking not only at the top news of December, but which news reported the trends during this year. This also highlights why some brands struggled and others have seen record success.
Value for money the top priority for shoppers in 2020
According to research by fashion finance company Klarna, two-thirds of consumers value affordability when it comes to shopping, closely followed by good-quality promotions and brands that have a good reputation.
Klarna concluded value has become more important to shoppers this year, especially with people having less money to spend on clothing and other non-essential goods. This does not necessarily mean cheap (a common misinterpretation of the term value for money), but rather that the product and its perceived value was definitely worth more to the consumer than the price paid.
Companies that can adapt are the winners of 2020
Although some fashion companies have been successful in 2020, others have failed to make the cut, with many household names going into administration (more on that later).
What has been the difference between those who won and those who lost? According to Kantar, it is the companies with a robust online presence and the willingness to innovate that were the most successful this year.
Take for example, fashion fitness brand Lululemon. The company was willing to change its strategy this year to not only embrace eCommerce but digital in general, offering virtual fitness classes to fans during lockdown. Customers indirectly rewarded the company with a staggering 40% increase in value.
Arcadia and Debenhams: two businesses that lost out this year
Earlier this month, we heard the sad news that two UK high street institutions had gone into administration, Debenhams and Arcadia.
The Arcadia Group owns brands including Dorothy Perkins, Topshop and Miss Selfridge. The high street-based brand struggled during lockdown, with sales slumping and debts rising. It was clear to everyone on the outside that they were simply behind the market, seemingly adverse to investing in the kind of change that would make them relevant in the future.
Debenhams was founded over 200 years ago and at its peak, had over 200 stores across 18 different countries. However in the past few years the company accumulated a lot of debt, first going into administration in 2019 when a consortium of lenders took over the ailing business and several stores had to close.
Both retailers were part of the Burton Group in the 1990s, and even to this day, several Arcadia brands had outlets within Debenham stores.
However, all is not yet completely lost for the two companies. American company Authentic Brands could potentially buy up both chains, adding to its annual turnover of $15 billion. The business has previous experience of buying bankrupt brands, snapping up Barneys and Forever 21 when they went into administration in 2019.
Arcadia is also being eyed by Primark’s parent company Associated Food, Next and Marks & Spencer. Fast fashion company Boohoo has also expressed an interest, meaning if it is successful, the Arcadia brands could be made available online to a new generation of customers.
Read more: https://www.theguardian.com/business/2020/dec/01/debenhams-the-rise-and-fall-of-a-british-retail-institution and https://www.theguardian.com/commentisfree/2020/dec/02/collapse-of-arcadia-philip-green-cautionary-tale–british-capitalism
Instagram and TikTok: A social media shopping war
More and more people than ever are buying on social media. One hundred and thirty million people tap on Instagram shopping posts every month, making it a critical marketing channel for fashion brands to consider.
Instagram recently announced it was expanding its shopping feature to Reels – its short-form video content format that was launched this year to rival TikTok.
Not to be left out, TikTok announced it is partnering with Shopify to enable users to tag stores in their videos and buy from the app.
Given the amount of time consumers spend on social media each day and how quickly that sector is moving, it makes sense for online retailers to review their B2C social media strategies regularly.
How lockdown influenced fashion in 2020
Lockdown had a significant influence on the way we dress this year, with people swapping high heels and suits for slippers and loungewear. It even inspired the phrase ‘Zoom Casual’ where people dress smart on top, and not so much on the bottom when working from home!
People moved to more colourful clothing this year in an effort to brighten their day and feel better about themselves. Vividly coloured jumpers, bold patterns and empowering slogans on t-shirts have been the order of the day since March.
Thermal clothing has also seen a boost in popularity with young people. Usually associated with the older generation, people have been buying warm clothing so they can socialise outdoors with family and friends in light of COVID-19 restrictions.
ACAI Outdoorwear has seen a 2,400% increase in skinny thermal trousers, which allow customers to not only stay warm, but fashionable at the same time.
Outdoor specialists like Mountain Warehouse, Millets and Blacks have also enjoyed a welcome sales boost as customers have been snapping up fleeces, winter boots and waterproof coats.
https://www.theguardian.com/fashion/2020/dec/13/how-lockdown-unleashed-a-thriving-online-market-for-colourful-clothes and https://www.theguardian.com/fashion/2020/dec/11/sales-of-thermal-clothing-rocket-in-response-to-covid-restrictions
Our thoughts on 2020 and the near future
Success in 2020 can be summed up in one word… Flexibility.
It’s been the companies that have been willing and able to adapt that have been successful this year. The ones that haven’t, like Debenhams and Arcadia, have been the ones that have lost out. The winning brands have also not just been able to sell online successfully, but they provide exceptional customer service, do more than just selling and have an excellent perceived value for money.
Although COVID-19 will still be a critical factor for businesses in 2021, we have to also consider the challenges and opportunities that come with Brexit. At this moment in time, a free trade deal has not been agreed between the EU and the UK. However, we do know most companies will need to try and extend their global reach online, build on international relationships, be very aware of duty and tax changes and most certainly review their supply chain several times over the next year.
We predict fashion and non fashion collaborations will become more important from 2021. Fashion brands will connect with complementary lifestyle businesses and personalities to appeal to a broader range of people and increase their presence both online and onsite. More online and physical retail will turn into experience focused spaces where selling will become a side effect of people wanting to be there. The creativity that can be applied to this is almost unlimited and we are sure many ideas will become successful experiments as brands look to get a closer relationship to their now significantly changed consumer.
Progressive brands like Nike are showing what this could look like in their most recent monobrand spaces, but this could also be done in collaborations. In addition there are lifestyle collaborations from the sporstwear giant as well, for example Nike’s recent collaboration with Canadian rapper Drake.
So, what about 2021?
We’ll be looking at the events of 2021 with interest. Of course we will play our role, guiding our clients through strategic and process changes as we approach what should be a year of further adaptations and re-positioning for many.
In the mean time though we wish you all a great but especially healthy holiday period. Be careful out there, but enjoy what we have now learnt is precious time!
This December fashion business news round-up was supported by WFX Cloud PLM
Fashion business news by Conceptable, London