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Fashion marketing after Covid-19

fashion marketing after covid-19

How has fashion marketing changed after Covid-19? The fashion industry is certainly among those most affected by Covid-19. The situation in Italy is even more complex if we consider that more than 40% of the world’s production of luxury goods takes place in Italy and that all the factories, including small family businesses, have been closed for several months. 

Fashion brands have already begun to mobilize to overcome the consequences of the prolonged lockdown of the past months, taking action on various fronts, including those related to production, organization, and communication. After Covid-19 the way fashion marketing operates is also subject to continuous updates, with the goal of implementing new or renewed digital and omnichannel distribution solutions and advanced methodologies and tools for data analysis. 

 

The financial impact on fashion

After Covid-19 the fashion marketing has changed. The economic damage is enormous: expected revenues for 2020 could fall by more than a third, with a loss that Boston Consulting Group estimates at around $640 billion

According to IlSole24Ore in Italy, lost sales could affect up to 30% of the year’s revenue, and this will impact the sector’s performance in 2020 and in 2021. Manufacturing plants have tended to reduce production, some have had to stop completely, while others have converted to making masks and gowns. The central and downstream part of the supply chain, from distribution to shops, has been put on standby. Sales of clothing and accessories have plummeted, and with this drastic drop, retailers will have to dispose of a substantial stock of unsold goods.

At best, the memory of the lockdown and the spectre of the ensuing economic recession will force fashion industry players to become more resilient, to invest in emergency plans and operational models that can effectively respond to unexpected events. To cope with new restrictions, mitigate the negative impact of the pandemic, and adapt to new consumer emergencies, companies will need to introduce innovative tools and strategies throughout the value chain to bring about radical and lasting changes in their organizations and in the marketplace.

 

Consumer sentiment in the post lockdown

While it is true that online shopping has increased, it is also true that the forced closure of physical stores and a profound reorganization of consumer priorities over the lockdown period have led to a general downsizing of spending on non-essential goods, such as clothing, footwear, and accessories. The radical transformations in people’s behavior and mentality could lead to a series of trends: an accelerated adoption of e-commerce, the even more pronounced split in spending, which will be distributed between online and offline purchases, and the increase in demand for brands who are perceived as aware and sustainable.

Consumer behavior and sentiment in the United States exemplifies what is happening. According to Boston Consulting Group, 81% of U.S. consumers believe the pandemic will lead to a recession, and more than half are concerned about their personal finances and, as a result, plan to spend less on clothing. 

Assirm, which brings together the major Italian market research companies, conducted a survey of the fashion industry, identifying some particularly significant behaviors in the current moment:

The concern for health is shared by 1 in 3: consumers expect brands to clean and sanitize the environment, such as installing hand sanitizing stations at the store entrance, and making sure that customer behavior is in compliance with hygiene regulations.

 

The four themes on which fashion marketing must take a stand

A need for security will therefore weigh heavily on an objectively difficult economic situation, for an undetermined amount of time. Emotional issues, linked to uncertainties and doubts about reopening, will contribute to and determine people’s purchasing behavior, and this will impact the productive fabric of communities. 

According to a 2019 study by McKinsey & Company, in partnership with Pitti Immagine and Camera Nazionale della Moda Italiana, 80% of consumers, especially millennials and generation Z, will return to physical stores, but they will do so with extreme care. In order to be able to intercept new customer desires in light of these extraordinary circumstances, marketers will need to pay particular attention to certain themes, which McKinsey and Accenture have identified as trends destined to have an impact on consumption in the medium term.

The emphasis, as we will see, is definitely placed on the human and relational dimension of the fashion system, the same dimension that will be the framework for any planning of marketing actions (you can find the McKinsey report, The State of Fashion 2020 – Coronavirus Update here and the Accenture paper, COVID-19: 5 new human truths that experiences need to address, here). 

 

1. Frugality

In order to reach increasingly frugal and disillusioned consumers who are more attentive to their expenses, brands will have to rethink their mission in order to redefine their narrative and provide products of value at a low price.

 

2. The loss of trust

The pandemic has eroded confidence in an economic system that has proved to be fragile, inflexible, and reactive. For this reason the winning brands will be those who have rethought their communications, making them credible, authentic, empathic, and close to the reality of the extraordinary circumstances we have experienced. At the end of the time of the emergency, brands will need a “multiplier of trust”: well-calibrated, optimistic content able to convince people to buy again, but on the customers’ terms. To rebuild trust will mean designing and implementing a series of targeted and continuous actions capable of re-establishing and strengthening a loyal relationship with consumers, through every channel. 

 

3. Concern for health 

Health concerns will not go away. Every company will need to understand how it can be part of a new “health economy” and  take responsibility for the safety of its products and services. This is all the more true for fashion brands for all the countless health and hygiene implications that distinguish their production.

 

4. The home

Brands will have to gain an in-depth understanding of customers’ desires to “cocoon” ,where they spend more time at home. They will have to be able to create the technical and narrative conditions to enter the dimension of domestic intimacy that the pandemic has forced us to live with an intensity rarely experienced before. 

 

Communicating with consumers in post Covid-19: the role of digital for fashion marketing 

What role did fashion marketing take after Covid-19? The digital channel did not simply represent a forced reaction to the inevitability of the situation, it accelerated a transformation in consumption habits that was already underway. Digital has become more and more important in this period because it has filled the gaps that the impossibility of visiting a physical store has discovered and left unattended. Today, brands must converge its efforts for both new customers on online touchpoints and maintain contact with existing customers

The forced use of virtual tools to manage different aspects of life, from work, consumption of goods and services, to social activities, is now perceived as an extension, and in some cases as a replacement, of physical interactions. For this reason, the fashion sector needs to rely on a marketing system capable of testing and exploring all the creative possibilities enabled by digital resources. 

According to Chris Morton, co-founder and CEO of Lyst, “Consumer loyalty to prestige brands remains strong, even in these uncertain times. But the way people interact with brands and shops is changing fast. The COVID-19 crisis is accelerating the changes that were already taking place in our industry and promoting new ones. In these unprecedented times, digital is becoming a key issue for fashion houses. Information and communication are key elements for our community. Those who adapt more quickly to new scenarios, making data-based decisions and relying on their own strengths, will have a better chance of growth.”

On the strategic importance of data and how fashion market players can store, qualify, and manage it for profiling, predictive analysis, and budgeting techniques, see our post.

 

Fashion marketing after the lockdown: freeing up digital creative resources

Among the initiatives that were launched during the lockdown period and that seem to have taken root also in the new normal, we’d like to highlight some that summarize and incorporate the trends described in the previous paragraphs: the desire for frugality, the erosion of confidence, the concern for health, the preference for a domestic dimension. These are new and alternative solutions or those simply reinvented, on which some fashion brands have focused, exploiting the enormous potential of digital.

 

1. Renting

Renting clothing, which is sanitised after each use or rental, allows consumers to continue to choose new and original garments at an affordable price and without having to go to physical stores, in the name of eco-sustainability and safety.

 

2. The digital personal shopper

The digital personal shopper can use digital – FaceTime or Zoom, for example – to show customers new looks, to give them advice on what to wear for different occasions, etc. An even more futuristic alternative is to replace the real-life personal shopper with an app that uses some artificial intelligence techniques. 

 

3. Online fashion shows

These are the natural (or rather artificial) continuation of the in person fashion show. Projecting on a screen over the catwalk gives brands the opportunity to activate a series of augmented reality features: information layers and multiple points of view can provide a full and dynamic experience.

 

4. The virtual showroom

The showroom for presenting collections becomes entirely virtual. The virtual showroom allows buyers and partners, wherever they are, to consult and view technical data sheets, photos and interactive images of the products, captured from different angles, in a reserved and protected cloud environment that is easy to use.

 

5. Video marketing

The quarantine is a victory for the video format (both on IGTV and YouTube), which users preferred over two-dimensional, non-immersive images. Videos were used to perform two communicative functions, one more transactional, the other more ideal. In both cases, the intention was to create a connection that was truly empathic, that could overcome the physical distance through reference to the common experience of staying at home. 

The pandemic has given the videos produced by and for fashion brands the ability to convey messages that are both universal and personal at the same time. The challenge now is to take that kind of story and to use it again to talk about our current, shared realities.

 

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