No category within retail has felt the effects of coronavirus harder than fashion. The industry is facing a collective £15 billion in stock write offs due to government restrictions and supply chain issues. Even as the high street reopened in mid June, average footfall was down almost 50 per cent year-on-year across England. This indicates more than a little uncertainty from the consumer, and a turbulent time for shop owners and employees.
What we initially thought to be a temporary blip in behaviours have become embedded consumer habits over the past four months. Retailers are not only having to adapt to the circumstances, but predict what may come in a highly unpredictable space.
So, what changes can we expect to disrupt the fashion retail sector forever?
1. E-commerce will eclipse bricks and mortar
With the recent news that over 6,000 retail jobs have been cut, it’s logical to assume we’ll see a continuation in the surge of businesses moving to online. While physical stores are a costly overhead, an e-commerce site can be set up with relative ease. This is usually for a fraction of the cost too.
Speaking to the ease and convenience, Megan Calcutt from luxury multi-brand womenswear boutique Cordelia James, was recently quoted as saying, “Ordinarily, all of our revenue would come from our bricks and mortar shops, but the pandemic forced us to pivot online. Thankfully it was quite straightforward to set up our Shopify store and we’re now seeing great success. This has helped keep us going over the past few months.”
According to a recent report from eMarketer, e-commerce transactions accounted for almost 22 per cent of all UK retail transactions in 2019. In 2020 that figure is expected to be closer to 28 per cent. And by 2024, it will be approaching 33 per cent. That’s without making adjustments to the impact of the pandemic, which has forced more consumers online than ever before.
This trend will have a major impact for independent fashion boutiques. With the average cost of a square metre of retail space in London coming in just shy of £15k per annum, the long-term value for fashion is in ditching stores and joining their customers in the digital space.
2. Technology investment will skyrocket
COVID-19 has exposed a fundamental flaw in the business models of many UK retailers: a lack of investment in technology. Those who were solely reliant on bricks and mortar didn’t have the flexibility to sell through a different channel. And that oversight has been crippling.
The digitisation of retail is something we’ve been on the cusp of for a long time. However, many brands are now moving online in rapid fashion: a quick glance at Shopify’s sales surge during spring shows some merchants quickly adapted operations to survive the pandemic.
As we’ve seen with recent retail closures, the pressure facing the fashion industry means that digital transformation is now vital. Retailers now need to streamline manual operational processes and react to shifting shopper priorities.
As a result, it is likely that we will see heavy investment in digital platforms and technology designed to streamline post-buy button touchpoints like inventory management, customer service, returns and fulfilment. Granted, it’s important for retailers to set up online with a beautiful e-commerce store. But it’s also imperative that they have the operational capacity to handle any sudden influx in demand. In a time where a smooth online buying experience and quick delivery will differentiate one business from another, independents should be looking to reevaluate their tech stack to gain a step up on the competition.
3. Click and Collect will be King
As stores reopen with strict social distancing and safety measures in place, expect a major uptick in new zero contact Click-and-Collect (C&C) systems. These will allow customers to order their item online before picking it up outside or via car delivery.
C&C has always been popular, but it could become a major point of differentiation for fashion indies as take up still remains low.
A C&C service has myriad benefits for consumers and retailers, saving money on the cost of next day delivery and ensuring that the merchant does not have the headache of managing packaging and logistics. For clientele that are still hesitant to browse in store, C&C could be a really appealing offer.
Retailers adopting the C&C model must ensure they have the correct technologies that enable a smooth transaction in place. This includes integrating C&C in the checkout cycle as part of the range of buying options and the ability to implement accurate inventory management. It’s essential to have an informed picture of which stores have what inventory so that shoppers can C&C with confidence.
Brightpearl is a retail operations platform for retailers and wholesalers with a clear mission to automate the back office so merchants can spend their time and money growing the business. Its complete back office solution includes financial management, inventory and sales order management, purchasing and supplier management, CRM, fulfilment, warehouse management and logistics.