The impact of the coronavirus pandemic has been dramatic in its scope across the globe, especially as governments pursue to take necessary precautions to minimize the spread of the virus.
Along with travel and hospitality, the global fashion industry is among the heaviest impacted verticals, with fashion shows being canceled, and travel being disrupted.
There is also no simple answer about the best path forward considering the unpredictable dynamics of the COVID-19 epidemic and the absence of unified instructions from government institutions and global organizations.
To help small and midsized fashion retailers maintain business continuity and reduce risk coming out of this disruption, we’ve compiled a list of best practices that SMB retailers can use to minimize the effects of the coronavirus outbreak on their fashion businesses.
The first reaction of customers caused sales spikes as people stockpiled products, followed by record-setting growth in online sales for certain product categories. Nevertheless, as the restrictions were extended by many countries, online purchases shifted to basic needs such as food or medicine.
While a small number of people did buy dresses or new shoes, apparel and fashion sales (offline/online) plunged. Here we’re going to share some best practices on how to reduce the effect of the Covid-19 pandemic on the fashion business.
Delivery and supply chain disruptions caused big problems for most fashion retail companies, as production and distribution activities slowed down considerably or completely ceased due to quarantine. Flight cancellation also created logistical difficulties, aggravating outbound, and inbound supply chain problems.
All fashion brands should evaluate the risk of delayed deliveries for the next season and analyze how it will impact revenue due to fewer sales. Develop a strategy aimed at optimizing your delivery chain, distribution operations, and logistics to ensure continuity of supply.
Looking at lessons learned from China and Italy we also recommend stopping temporary planned deliveries of nonessential goods and postponing production cycles. This will also allow you to prepare the necessary changes to pricing and discount models. If possible, we recommend you to consider local suppliers or exploring partnerships with complementary businesses.
A virtual showroom isn’t a new concept. Companies like Joor, Vuframe, Brand Lab have been working to digitize the process for a number of years. The virtual showroom is a digital technology for building online product showrooms that include catwalk images, albums, price lists, and more.
Virtual showrooms allow fashion brands to demonstrate digital versions of their clothes, which customers can sort using advanced search tools. This technology can help customers to make quick purchasing decisions without the necessity of visiting a physical showroom.
The COVID-19 outbreak has attracted greater attention to these digital tools. Well-known Italian brands such as Tod’s, Bottega Veneta, and others have already implemented virtual showrooms to organize wholesale order management.
What is more, you can show your customers that your fashion brand embraces environmentally-friendly practices. These digital tools enable customers to browse new collections online rather than driving to a physical showroom reducing the carbon footprint.
During the global economic decline, assortment redefining is a crucial aspect of any retailer’s strategy. Slow-moving inventory or dead stock can significantly damage your fashion brand’s ability to withstand the global crisis and maintain relatively high growth. This is a great time to cull your assortments.
Many fashion brands are re-evaluating their summer and holiday inventories. Identify which types of clothes could be delayed for 2021. Some items can also be sold at discount during the holiday period. It all depends on the available storage space. Successful fashion SMB retailers will be those who can cut their orders in an efficient way and be ready to ramp up when the global markets recover.
Every fashion business has its most loyal customers. 77% of customers have maintained loyal relationships with their preferred brands for 10+ years and are likely to make repeat purchases with brands if they provide amazing customer service. During the crisis, your top priority should be to take care of these customers first and provide special services and resources to these valuable customers.
We recommend targeting your customer loyalty programs and value-added offers to reward your loyal customers for systematically making purchases. For example, you can send face masks or hand sanitizers every time your loyal customers purchase products from your store to show that you care about their health during these difficult times.
You could also give your customers points every time they share your brand on social media, write reviews, or buy a product and enable them to donate these points to organizations that are helping to cope through the Covid-19 pandemic.
Loyalty programs give the perfect opportunity to collect customer data. Send your customers rewards reminders or notifications about the latest products. Use abandoned cart emails to remind your customers to return to your online store and complete the purchase.
You could also send relevant content that will be helpful in the daily life of your customers, despite the fact that they might not be able to visit your physical store. It will help to improve customer retention.
In China, some of the fastest-recovering fashion brands looked forward and expected such shifts. Crises related to virus pandemics have a dynamic trajectory, which demands a continuous reframing of strategies and plans.
Crisis planning includes recovery strategy, post-recovery strategy, reflection, and learning. We recommend analyzing market data to bring into focus any lost market share as a starting point for recovery planning to maintain or win back during the post-recovery stage.
The lessons learned during the COVID-19 pandemic can also serve as a pattern for responses to other crises in the future. Beyond 2020, fashion brand owners will also need to reconsider their three-year plans.
For SMB fashion retailers that heavily rely on bricks and mortar sales, now is the high time to redeploy sales efforts to online channels. Coming out of lockdown, people will likely still spend more time at home and this could be a good opportunity to reap the benefits of online shopping.
We also recommend to reconsider your marketing strategy and reinvest money in digital marketing. Digital marketing will play a key role in keeping your customers engaged and boosting online sales. Moreover, a successful digital marketing strategy will encourage customers to visit brick and mortar stores when they reopen to check the available assortment.
Personalized product recommendations, customized CTAs (call to actions), dynamic pop-ups, banners, cart abandonment emails, reward systems are among the most common marketing tools that will help you increase ecommerce conversion rates.
Keep abreast of the latest trends to increase customer engagement. For example, video-sharing social networking platforms such as Youtube, Tik-Tok, and Facebook give fashion retailers the opportunity to create or take part in challenges to engage customers.
Design is a key factor in online success. Whether you want to redesign your website or start a new store with a custom look from scratch, task this to a professional development agency that will create an amazing ecommerce website design.
All these efforts should mainly be applied to your own ecommerce store but you could also apply to business partnerships with retailers that have more popular ecommerce businesses. You can advertise your products on their online channels.
The coronavirus crisis has brought the fashion industry together to address the critical need for face masks, hand sanitizer gels, and medical overalls. The majority of fashion brands are repurposing production to help make these necessary supplies.
Italian brand Prada announced it would make 80,000 hospital gowns and 110,000 face masks at one of its factories. French brand Dior repurposed production to make non-surgical face masks to give it to employees whose work continues despite the epidemic.
French brand LVMH is manufacturing hand sanitizers to help stop the spread of the virus. Italian brand Bulgari is producing 6,000 bottles of hand sanitizers daily and is sending it to Italian hospitals.
Elogic also wants to help the ecommerce community to fight with the COVID-19 outbreak. We constantly monitor the situation on the fashion retail market and are ready to offer the best practices on how to adapt to this current state.
We’ve worked with many fashion retailers to help them build and support their Magento-powered online stores. During a crisis, we offer a flexible pricing model for our Magento store development services.