Drapers analyses how shopping habits will change after the coronavirus crisis.
Britain has been in lockdown for eight weeks.
April experienced the worst like-for-like retail sales in history, falling by 19.1%, showed the British Retail Consortium’s (BRC) and KPMG’s monitor, which started in 1995.
Unable to visit stores, ecommerce is for now the only channel open to fashion shoppers until stores slowly start to reopen from 1 June, but even digital has taken a hit. While online retail sales as a whole reached a 10-year high in April, up 23.8% year on year in the latest IMRG Capgemini Retail Index, clothing sales plummeted by 23.8%. Footwear and menswear sales were particularly badly hit, slumping by 31.1% and 33.5% respectively.
People have learnt to live with the bare essentials and will realise they don’t need clothes all the time
Chloe Collins, senior retail analyst at GlobalData
The population’s spending power has been reduced by widespread job losses, mass furloughing and reductions to working hours. Covid-19 will cause the value of the UK clothing and footwear industry to contract 34% in 2020 to £35.5bn, predicts GlobalData, based on the reopening of stores from 1 June.
But there is hope. British knitwear brand WoolOvers unexpectedly doubled sales in April, which CEO Mike Lester attributes to communication with customers, and demonstrates shopper demand for both human contact and product. (Read WoolOvers Comment: ”We invited customers to give us a call and have a chat”)
And in markets that opened in mid-May, eager consumers queued up to start spending. On 11 May – the day retail reopened in Belgium – there were queues of shoppers outside Brussels branches of Primark and Zara. Shoppers also lined up outside at Inditex owned-brand’s shops in Paris, Lyon and Bordeaux. Luxury label Louis Vuitton attracted a queue at its Champs-Élysées store when it reopened in the French capital on the same day.
But there is hope. Fashion as a form of escapism and comfort will be a key factor of emotional recovery after the coronavirus, argues Isabelle Szmigin, professor of marketing at the University of Birmingham and deputy dean of Birmingham Business School.
People are quick to forget when trauma happens and want the same comforts they had before
Chana Baram, senior retail analyst at Mintel
“The majority of people will go back to normal, if they can afford to. They will want to forget what has been happening and shopping is a way to express this.
“Consumer culture is too ingrained for this crisis to make much of a difference – although, doubtless some people will become more mindful in their consumption.”
Chana Baram, senior retail analyst at Mintel, agrees that fashion purchases may provide some comfort for consumers once the crisis subsides: “People are quick to forget when trauma happens and want the same comforts they had before.
“Consumers will get back to normal very quickly, but some changes will stick. Shoppers are questioning what the essentials are and therefore buying more basics or classic items rather than trend-led pieces, which may continue after coronavirus.”
Glen Tooke, consumer insight director at Kantar Worldpanel, concurs: “The longer the lockdown lasts, the more consumers’ need for new clothes increases. But there is also more potential for consumers to realise they can make do with what they have.”
Drapers’ own coronavirus survey asked participants how much of a priority fashion spending will be for consumers after lockdown. More than half (57%) said it will not be very important, while 11% said it will not be important at all.
The owner of one fashion retailer says: “There will be a huge re-evaluation of what is necessary, financial and ethical concerns, and global consequences.”
Spending on experiences, rather than clothes, is likely to be consumers’ priority once the lockdown is lifted, believes Chloe Collins, senior retail analyst at GlobalData: “Consumers will want to go out and won’t want to spend time shopping. They will have realigned priorities, such as social events and holidays. Fashion won’t be one of them.
There will be a huge re-evaluation of what is necessary, financial and ethical concerns, and global consequences
Fashion retailer owner
“People will want to make sure that they have savings behind them. They have learnt to live with the bare essentials and will realise they don’t need clothes all the time. Consumers will want to go out [socially] and won’t want to spend time shopping. Plus they will still be cautious of crowded areas such as high streets and shopping centres.”
Emily Gordon-Smith, director of consumer product at trend forecasting agency Stylus, believes sustainable shopping habits will “gain momentum”: “Who hasn’t been excited reading about the lower levels of pollution and nature having some respite during the lockdown? It’s potentially the only positive outcome [of coronavirus] and this will drive the sustainability agenda forward.”
Mashu is a London-based handbag brand that uses sustainable materials such as Piñatex, which is made from pineapple plant leaves and hemp. Founder Ioanna Topouzoglou agrees that there will be less of a focus on consumption.
“Being isolated at home has made everyone, including myself, more appreciative of everything we once took for granted. Perhaps simpler times lie ahead, where we realise we don’t need to consume as much as we did before, and that we can live with less. I am hopeful that we all become more mindful consumers after this.”
Mark Dransfield, owner of independent department store Sandersons Boutique Store in Fox Valley, Sheffield, thinks consumer spending will be “more cautious”, adding: “But the fashion industry is incredibly resilient and a huge part of the economy. Shoppers are already starting to look at more sustainable fashion and less of the throwaway brands, and at Sandersons that’s something we’re very keen to champion.”
He adds that while consumers may be wary of venturing into physical shops at first, “essentially social animals and that human contact is incredibly important … I think a return to ‘normal’ shopping patterns will most definitely be gradual and there will be measures in place for the foreseeable future that will affect how people shop and visit centres like ours.”
Shoppers are already starting to look at more sustainable fashion and less of the throwaway brands
Mark Dransfield, owner of independent department store Sandersons Boutique Store
Gordon-Smith continues: “More consumers will have learnt how to appreciate what they have and cut back – people might have lost their jobs so people will buy less stuff. I think we will see the ongoing impact of people buying less, there will be less spend and less money around.”
Careful spending is a theory echoed by Mintel’s Baram, who thinks consumer confidence will be low as the pandemic would have been “financially devastating for many”: “Shoppers will think twice about buying something they only wear once, but the younger demographic will still buy from fast fashion brands.”
Szmigin agrees that shopping mindfully might not become prevalent among the younger, under-25 demographic: “Many of them will have been effectively locked up with no opportunity to physically be with their peers, so there may be a short period at least, of quite hedonistic shopping for those who can afford it.”
She continues: “There may actually be a resurgence in the high street. People will want to be out, socialising and doing things they have not been able to such as browsing, looking, feeling the texture of things.”
Shops with good customer experiences and service will “stand out”, says Baram, adding that “people will miss going into the shop and having it [their purchase] the same day”.
Businesses who are acting like nothing has changed may well see a change in consumer loyalty and brand perception
Mashu founder Ioanna Topouzoglou
Retailers that have joined the relief effort will be the benefactors of consumers’ spending resurgence. Stylus’s Gordon-Smith argues that “philanthropic enterprises from brands will resonate going forward”.
This is already tangible.
In April and May so far, Mashu sales have grown 20%, which Topouzoglou attributes to the brand’s support of charities, as well as consumers’ desire to shop from small businesses.
Mashu is donating 15% from all sales of its products to two charities that are helping in the wake of the coronavirus. The beneficiaries are Help Them Help Us, which is assisting NHS staff by delivering meals and PPE equipment, and Bankuet, which helps stock food banks across the UK.
Milan-based vegan footwear brand Yatay announced on Instagram on 3 April that will donate a pair of shoes to the city’s Humanitas Research Hospital for every pair sold. Founder Umberto de Marco says online sales rose by 70% in the four days following the announcement.
He tells Drapers: “Coronavirus had consequences on consumers shopping habits, but not all necessarily negative: I’m hoping that we’re going to see an improved consumer sensibility in buying better and longer lasting products”
From 1 April, sustainable footwear brand Toms is giving one third of its net profit to its Covid-19 Global Giving Fund, which has partnered with multiple charities, including WaterAid.
Chief giving officer Amy Smith says: ”We have seen how rapidly things are changing because of this global health crisis and have speculated what it means for the longer term. Because we are in the heart of the crisis, it is difficult to really know how individuals and businesses will need to adjust once we are on the other side of this.
“Our customers have always been part of the Toms mission of using business to improve lives.”
Topouzoglou says: “Businesses who are acting like nothing has changed, and not acknowledging the current crisis, may well see a change in consumer loyalty and brand perception.
“Every business and service is supported by consumers in some way. In a time like this, consumers are looking to brands to return that support and help their communities in a way that matters most right now.”
Baram predicts that consumers will turn their backs on flashy, expensive luxury goods, as they did in the 2008 recession: “It became distasteful for people to have big brands.”
There will always be a need for clothing – consumers will still want to treat themselves
Gordon-Smith concurs that the luxury market will see a “more reserved approach” that “feels more appropriate in a post-pandemic climate.” She forecasts that there will be a shift away from logos in favour of a more modest, minimalist trend.
Sustainability will be key for the future of the fashion industry, but the supply of continuously new product will continue, thinks Szmigin, as there will be demand from manufacturers and consumers to “get back to the old normal.” She also predicts a “big return” to advertising as it will be an even more competitive environment.
Recovery for retail
As for consumer spending habits, “there won’t be one behaviour”, states Tooke, “It very much is a case-by-case basis – a lot would depend on every household’s personal financial situation.”
But the frivolity and feel-good factor of fashion is a potential advantage for the industry.
“There will always be a need for clothing – consumers will still want to treat themselves,” Tooke continues. “If eating out is one of the first sectors to open, consumers will still want to dress up to do so.”
The road to recovery for retail will be long. GlobalData forecasts that the UK clothing and footwear market will rebound by 43.5% in 2021 to a spend of £50.9bn, but this will still be £2.9bn less than 2019 when the market was worth £53.8bn. Brands have to fight to win what could be a limited amount of consumer spend. Fashion retailers that have been considerate to the crisis will benefit from shoppers’ trust, as will sustainable products.
On the other hand, bricks-and-mortar retailers may experience a rush when housebound shoppers are finally able to flex their legs – and wallets. Fashion will endure, thanks to the desire for consumers to comfort themselves with exciting new purchases.