The conversations around the repercussions of COVID-19 have been relentless and at times have felt like they’ve reached a fever pitch in the fashion/commerce universe. But, among the multitude of headlines has been some very open and honest conversations about an industry that might be heading towards an awakening.
We wanted to share some of our findings from a recent survey we ran with 2,000 of our retailers in the anticipation that our data will help the industry better prepare for an uncertain future.
What we discovered
With endless reports that paint a devastating picture for small businesses and major retailers alike, there has been a small, albeit important silver lining: the industry is being forced into some important changes that are planting seeds of hope for the future of fashion and retail.
NuORDER, who works with both brands and retailers, wanted to truly understand the impact that store closures and world-wide shutdowns are having on the industry, which led us to send out a survey to our buyers to try and gauge how each of their businesses were individually handling the crisis.
The majority of our participants work for single-store, North American retailers and nearly 63% of respondents are reporting canceling on-order, yet to arrive products with 43% reporting complete store closures. Most retailers are stating that they will be making changes to their future buys as well, which means brands will be left with an excess of inventory and retailers left with unsold in-store products.
The industry is already having to make some very tough decisions on how they are going to deal with the loss of a season, whether it comes in the form of heavily discounting or worse yet, downsizing the business and letting employees go–there is no clear correct answer.
However, what we have learned through this data is that there are key areas that retailers and vendors can focus on that will alleviate pains caused by a global shutdown. For one, the relationship between vendor and retailer must be transformed into a true partnership. When asked what vendors can do to help their retailers during this time, most buyers stated that they wanted brands to offer more flexible payment terms including extending credit and adjusting current orders.
The overall sentiment displayed in the survey data was that in order for the industry to make it through this period, retailers and vendors will have to band together to close the gap between what retailers report they can buy and a vendor’s production costs. What we are foreseeing is that this challenge will put all players in a cash crunch, so our word of advice from our co-founder and co-CEO, Heath Wells is to reach out for aid he says, “can you get credit from your factory? Can you tap into some credit lines? Can you quickly organize other credit facilities? It’s about (getting) creative between now and then, and being flexible with those retailers is going to be very important.”
Paving new frontiers
What we know for certain is that this crisis will cause long term changes, and for those brands and retailers who are willing to realign with consumers and a market that has been changing for more than a decade, their business will come out stronger.
The way that business in the industry has historically been conducted has seen little change–despite the major jumps and advancements in technology. What we predict and hope is that more market appointments will be conducted online and that rather than vendors selling their products in mass, there will be more strategic and purposeful assortment curation with an increase in immediate in-season buys.
The issue of sustainability and the industry’s responsibility for creating negative environmental impacts has never been more relevant. Now is a time when the industry can make peace with its hyper-dependence on mass consumerism and pivot to truly become a more consumer-centric and accountable industry.
When all is said and done, however, no report or words of advice will negate the fact that the industry is having to make some really tough decisions right now, and our hearts go out to all the businesses that are having to face permanent closures or reducing employee size.
Our end goal for conducting this survey was to present clarity and hard data to an unpredictable crisis, and offer our support to brands and retailers.
You can access the full report here.