The fashion industry is an extensive part of the global economy. Over the last month, fashion brands have closed stores and started layoffs. COVID-19 (aka Coronavirus) is the catalyst for the resurrection of the fashion industry. This has left employees, consumers, and fashion lovers asking: What will be next?
The fashion industry is receiving a wake-up call. This call is centered around its production process and business models. After Coronavirus has gone down, a “new normal” will begin. The luxury fashion industry will return to focusing on artistic values and exclusivity. While the retail industry will begin to slow down its production process, making a way for new buying habits.
Consumer Psychology Post Coronavirus
Coronavirus will bring new and lasting buying habits, but we will not see these changes in the beginning. High foot traffic will blind retailers into thinking everything is back to normal. However, the disconnect will happen when trying to convert these consumers to dollars. Consumers are currently in “survival mode”. They will be focusing on the growing D.I.Y industry and will grow accustomed to slow buying habits. This means consumers will continue to be focused on being independent, and will already be used to not having certain products. Therefore, the rush to get new products will not be high. Consumers are currently mastering new skills or securing their personal goals. This mindset will stay and affect their buying habits. Consumer buying habits are a small ingredient that will drive the change in the fashion industry.
“Now luxury brands are indirectly in a popularity contest with fast fashion brands.”
Over the last decade, Luxury Fashion has made a shift into being more accessible. This was their downfall. They were living in a customer-driven market, putting popularity over the roots they came from. Luxury Fashion has always started trends, then consumers followed. Luxury was something to marvel. Appreciating each detail in the fabric, the tailoring of the piece and the sewing techniques. History shows us that luxury designers created looks, passed it down to royalty or magazines, and everyone followed. This small factor combined with social status made the industry what is today. Thus allowing designers to push the limit and create pieces of artwork. Now, luxury brands are indirectly in a popularity contest with fast fashion brands.
Traditionally, the runway shows were previews and within 6 months the clothes were available. They have now veered away from this fashion calendar and their direct-to-consumer values. Traveling away from this was their response to high consumer demand. The Coronavirus has now forced them to slow back down.
The consumers that they focused on pleasing are now out of work. Their real consumers now do not need, nor want, their product. Fashion shows are canceled and now department stores are breaking payment contracts. Luxury fashion will change for the better. Combined with technology, a new artistic height will be reached. Opening the gateway for designers to dream bigger and create thoughtful pieces. Once the “habits” of luxury fashion have changed, true creators will succeed.
“When the retail industry gets back on its feet, the next era of fashion will begin.”
Retail fashion is going to have one of the biggest changes. Retail is an inventory to inventory business, which means they only make money when they sell their products at the highest price point. These small margins make it very difficult for the production process. To explain this further, retail is only successful when they sell their current product fast. When clothing pieces come in, they have to leave within a certain time frame. One of the biggest No’s in fashion retail is sitting on a product. Retailers having inventory they can not sell, is the quickest way for them to go bankrupt. This is mainly because they had to purchase the inventory first.
Small margins plus a high turn around, means there is no room for error. Corona has shut down manufacturers, creating a hole in the supply chain. Most retailers shop wholesale. These wholesale companies now don’t have a way to produce some of their products. Creating a shortage or cancellation of collections. Some small brands will not be able to come back. This is also how retailers are now sitting on collections they cannot sell, while not receiving the new product they need.
“Everything fashion will slow down. It will not be an option. It will not be a choice”
These factors are forcing them to slow down, which will reinforce the slow buying habits in consumers. Retailers are now facing the challenge of selling inventory in the middle of a pandemic. Over the last decade, consumers have been shopping seasonally. When spring comes, they buy spring pieces. When summer comes, they buy summer pieces. The challenge retailers and many business owners are facing, is sitting on spring products they aren’t selling. These are pieces they cant sell during winter. Therefore, we will soon see a spike in online sales. Retailers are currently paying for their fast pace buying habits. Now many retailers can not buy fall collections. Meaning they are canceling on small brands. This cancellation now means smaller brands can’t afford to stay open.
When the retail industry gets back on its feet, the next era of fashion will begin. Everything fashion will slow down. This will not be an option. This will not be a choice. Retailers have been on a decline. Some retailers will stay, but most will not. Moving forward, retailers will have to downsize. Multi-brand companies may no longer be existent. Smaller will ultimately be better. We will also see retailers push their in house brands. This change in retail will happen because of consumer buying habits. However, fashion has had a broken production process. Corona was just the straw that broke the camels back.
A new fashion industry is on the way.
In conclusion, you may be asking yourself: What will happen next? The answer is a slowdown. In this slowdown, just be prepared for slow buying habits. The fashion consumer is changing and you have to change with it. The retailers that will survive are leveraging this change to their advantage, and you should too. The world is changing. Retail will reflect its production and supply chain process, while luxury fashion gains its artistic values. Just make sure you pay attention. A new fashion industry is on the way.
Written by: Corinea Austin