2020 has been unlike any other year. Fashion retailers were hit especially hard early on by the Covid-19 pandemic. Since then, they have been racing, fighting even, to adapt, evolve and innovate fast enough to save their businesses. Changes that were once part of a long-term strategic plan had to be implemented immediately, often remotely and with less staff.
In some cases, this acceleration of change helped to stave overall losses. For some, it even provided an opportunity for brand growth and scaling. But for many it was an acceleration towards insolvency and bankruptcy.
For those who made it pass these initial hurdles, the focus turned to the fourth quarter, the most important season for fashion retailers in terms of overall sales.
For most retailers, this meant putting more emphasis on e-commerce, restructuring promotional timelines and realigning direct-to-consumer distribution strategies. For others, this included more drastic measures, such as reconfiguring physical stores to be pick-up only locations, or even “dark stores” or warehouses.
Now, as we near the end of the fourth quarter, retail executives are hoping to see that their efforts have paid off and will provide a foundation with which to rebuild their businesses in the short term, post-pandemic.
So, what is the verdict leading into the holidays? How have retail expectations held up? “It’s a very interesting and complex question, because we have to speak about different geographies,” declares Massimo Volpe, Co-Founder of the Retail Hub, and Founder of Global Retail Alliance, an association that connects leading global retailers.
Increasing in Q4, especially in the US market, up by almost double digits. We definitely have seen a higher double digit in the Asian market with China in the leading spot. And we’re still struggling in Europe. We had a rebound all over Europe, but because of the last, and current wave of Covid in specific areas like France, UK, Italy and now Germany, we’re seeing people have kind of slowdown a lot. So, It depends a lot on the geography you’re talking about.
While that might sound positive at first glance, at least for China and the US, these double-digit number increases are still below overall expectations and below year-on-year growth. But in a turbulent year, executives have had to be more sanguine than usual.
But there are silver linings. One of the key accelerations that have led to overall positive growth in the retail industry is a more strategic focus on e-commerce, and its position within an omni-channel retail structure.
E-commerce has grown by 40% for most companies, which represents a large shift. When asked if these increases will continue post-pandemic, he suggests that after Covid, these numbers will likely decrease to 20 or 25%.