Time for Change in Apparel Retail

Is COVID-19 only to blame for the increasing mortality rate of apparel retail businesses? Here are some tips on remodelling of apparel retail for sustenance.

Change is the only constant. But in present day, change does not occur by choice but by ‘force’, which is beyond anyone’s control and which has put the world on pause. The apparel retail industry had needed a transformation in its perspective, a change in its operations. This was procrastinated for long until COVID-19 stepped in and has now accelerated the thought process of revolutionising the entire lifecycle of the industry. A lot of companies are being replaced globally, a lot are seeking Chapter 11 (US bankruptcy code 11), quite a few have closed doors for good, and still there are a few surviving on tenterhooks. So is COVID-19 only to blame for the increasing mortality rate of apparel retail businesses?

Close to a decade ago during my post graduate course for supply chain, I had conducted a research on Inditex’s fashion brand Zara. It was impressive then and even now how the Swedish brand has the shortest turnaround times and how well planned and executed its supply chain is. Year after year Zara is used as an example of being the smartest and stylish brand that does not own much inventory, which delivers trends fastest and maintains moderate pricing. Its model is studied and commended, but the surprising part is why no other retailer, specifically in the United States, is able to make and follow the Zara model.

Shorter lead-time is not the only challenge to deal with as global e-commerce has increased 600 per cent since 2010. The change of stride with e-commerce luring the shoppers has affected major retailers, forcing them to downsize their brick-and-mortar presence. Sales have declined and the brands are losing their presence in the retail world. Many businesses are closing down, there is brand identity clash for the ones that want to move out of the prevailing image. So what is not working for these companies to bring shoppers back to their stores? Today’s shopper is savvy, price conscious, yet stylish. She wants to stand out in the crowd, wants a personal stylist but doesn’t want to dig her pocket out for it. She doesn’t want to go to a mall to satisfy her shopping needs; she is from the digital era and window shops with numerous tabs every day. She knows what she wants and where to look for it. She is her own stylist! She knows today’s fashion leaders, her fashion role models and is familiar with e-tailers like Amazon to get the off-season/seasonal merchandise in latest trend and best price.

The demand for sale and discounted price is increasing than ever before and that is compelling retailers to compromise on the quality of the merchandise. This is further pushing the shopper to look for new avenues to get the right product. Amazon has successfully delivered a range of products from low to luxury, and the prime shipping factor is additional convenience for the customer to sway towards shopping online. Customers have commented that experience in shopping in specialty store is not the same as before. Merchandise looks like junk; there is mix-up of branding with too much of products; there is nothing new that cannot be bought online. There seems to be hardly any difference in buying from a specialty store or buying off the rack. The Gen X and those younger to them are impulsive buyers and that makes online purchase easier compared to baby boomers. Free returns resolve the issues of testing the size and quality of the garment.

This challenges the retailer to strategise not only against competitors, but also to satisfy a completely new streak of shoppers, changing buying trends and a changing product mix. The change in geopolitical circumstances would further damage the retail industry. It is a lot to keep up with. But to survive, they would have to. Else we would soon see a lot of brands going down to never see the light again. And above all these foregoing aspects, now it is the pandemic. With social distancing effective in everyday life for a long time to come, every brick-and-mortar shop will need a new strategy in place to make a shopper confidently approach its store without much safety concerns. But a shopper will very assuredly and fearlessly shop online with no need for social distancing, mask or gloves. From the recent dropouts of the big labels, it is evident that they had to put plans of well-structured e-commerce in place long back before the final nail of COVID-19 hit the coffin. Retail needs remodelling, a complete alteration to existing model to a new one that would include:

Buildingup e-commerce as the store face: A stronger online model will make both theretailer and customer confident of a better shopping experience.
Speedingup supply chain: Gone are the days with two or three retail seasons a year anda 180-day concept-to-market (CTM) turnaround time. Shorter lead times andfaster response to customers’ increasing demand on new fashion will ensurebetter sales.
Improvingquality and pricing: Fast fashion does not mean cheap quality products, nordoes it mean expensive unreasonable $$. A fine product with a balance inquality and price is the key to a successful product and sales.
Leanretailing as the future trend: Hoarding on large inventory of SKUs will nolonger work; retailers have to move forward with lean retailing and reactfaster to the changing environment and demand.
Knowingcustomers: Baby boomers ruled the customer market for a very long time; millennials and the next generations nowdefine a new psyche of buyers and they will dominate the industry in the yearsahead. It’s more than important now to understand the need and buying patternof these customers to succeed and be on par with competitors. Digital and social media have madecompetition stronger than ever before and needless to say the competitors haveincreased too. While it is essential to know what your competitor does, it ismore than essential to bring a better brand identity and productdifferentiation to stand out in the crowd.
Sustainable thinking: Fast fashion and fads won’t rule the market for very long. A buyer is now more conscious and aware of the need for sustainability in clothing. Longevity of a product is another principal feature of fashion in future.