COVID-19 vs. Fashion
What an action-packed year 2021 has been so far. We're not even halfway through but we've already been treated to a presidential circus, farmer protests, racially-charged murder trials, border skirmishes, military coups and pro-democratic movements. Nothing, however, continues to shock development and infiltrate the macro market like the coronavirus. But almost a year to the day the pandemic was made official by the WHO, the world has now been offered enough time to slow down and catch its breath; this ubiquitous chain has not debilitated prevalent structures but instead deeply exposed already broken systems. Because of the combination of an inefficient health system, unsatisfactory institutional response and careless public attitude, India is witnessing, and struggling to cope with, the full resurgence of the global pandemic at a time when other badly-affected countries are looking to ease restrictions. One industry all set for an accelerated cyclical shakeup is the fashion pyramid. Some of the major areas of disruption have also been cited in "The State of Fashion 2021" - developed by McKinsey & Company in collaboration with the Business of Fashion. These findings are an effort to recognize certain trends that were in motion prior to the shakeup and advance the discussion beyond crisis management and immediate contingency planning to a distinctly outlined restructuring roadmap. "... the world has now been offered enough time to slow down and catch its breath; this ubiquitous chain has not debilitated prevalent structures but instead deeply exposed already broken systems." Image courtesy - Fast Company and Quartz 1. Profitability According to reports, the industry suffered its worst year on record with almost three quarters of listed companies losing money and most recording a decline in profits. The whole profitability conundrum has to be rethought; more products and more collections no longer necessitate higher profits. Organizations need to reduce complexity and increase flexibility and responsiveness. They need to find ways to increase sales at full price and reduce inventory. This kind of strategy will entail reshaping business models, streamlining operations and sharpening customer propositions. Less is more. 2. Digitization The primary driver of growth will continue to be online and it will accelerate as customers remain reluctant to gather in crowded spaces. The biggest impact will be felt by physical stores so most have already bit the bullet and leverage data and analytics through curated offerings, footfall predictions, inventory management and smart stores; flagships will soon primarily serve as discovery zones. Sophisticated customer-side digital adoption will also see human touch seamlessly integrated in social media shopping, AI-driven chatbots and targeted advertising for optimal experience. Digital is king. 3. Changing Consumer Behaviour Consumer behaviour shifted as supply chains were disrupted but they continue to, more vehemently, advocate for fairness and social justice. The situation has brought underpaid workers and vulnerable employees to the fore of catwalk culture; consumers are becoming increasingly aware of their plight and hence promote brands that champion the respect, safety and dignity of their people and campaigns that combat the exploitation of labor. There is also a growing ethical obligation for the big names to end midseason fashion collections and reduce the number of shows every year. The customer is always right. 4. Sustainability is magnified The importance of sustainability through the value chain has only been magnified. Investors are increasingly rewarding companies that treat the environment with respect, and the deeper relationships that emerge have improved agility and accountability. Businesses are starting to prioritize a new "green line" that factors in the concept of circularity between the traditional top and bottom line. Exhausting resources before regeneration has become the mandate. The three step process to maximize sustainability clout - design for zero waste, manage waste with reverse logistics and create a waste experience. Doing good equals doing better. 5. Marketplaces are booming The marketplace boom is no surprise. The influence of platform propositions and surge in organic traffic is escalating with renewed appetite among both brands and consumers for fixated, local engagement. Clever positioning and omnichannel perspective has systemically helped such sellers navigate supply-side backlash especially in the textile and apparel sector. Sleek and focussed offerings that combine the best of human and automated services are setting up truly bionic experiences. Allocating media spend across key channels and optimizing ad types will be key differentiators in this space. Personal touch needs universal priority. Image courtesy - McKinsey & Company The fashion industry will never be the same; the vogue beast entered and will exit the pandemic in very different forms. The catalytic nature of COVID-19 has presented every player with the opportunity to reshape the intrinsic value chain and reassess every measure of action. Business owners, brands, suppliers, logistics partners, real estate associates and other contractors will feel the social responsibility to share useful data, strategy and sentiment in a collective attempt to restore normalcy. Big names such as Nike, H&M, Ralph Lauren, Burberry and Chanel are already pitching in with relief efforts. We're all in this together. The eruption continues to reverberate throughout commerce and the tremors prove that it simply was not built for agility. But it has also simultaneously divulged clear guidelines - guidelines that balance and maximise spotlight on the triple bottom line - People, Profits and Planet. In such a distorted environment, though, decision makers need to act boldly. Amidst increasing pressure on performance, evolving consumer behavior and accelerating demand for digital, they must develop novel strategies that focus on value, simplicity and scaled-down collections, rather than the traditional ways of discounting and volume business. There need to be clear lines of communication with employees as well as transparent practices on display to customers; these are vital steps towards a more sustainable future. Uncertainty looms as more high-profile cases of insolvency, store closures and furloughs hit the news and waves of further outbreaks hit the metaphorical shore. It was never gone but it feels like it's here again. And it's here with a vengeance. Tough days undoubtedly lie ahead so future-proofing has to be square one. Times of change are also inherently rich with opportunity so doubling down on the aforementioned silver linings, aligning with key trends and adapting to an evolving landscape is the name of the game. There is hope in the post-pandemic world; lockdowns, vaccinations and, of course, competent action can secure a definitively stronger, leaner and prosperous operation in the new normal. "Times of change are also inherently rich with opportunity so doubling down on silver linings, aligning with key trends and adapting to an evolving landscape is the name of the game."
A concept with a conscience
