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NPD: Apparel Will Have to Restrategize Distribution After COVID-19

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It’s no secret that the COVID-19 crisis is changing consumer behavior, and it’s deeply affecting the apparel industry.

According to data pulled from market research company The NPD Group, “soft line categories” such as apparel including denim are experiencing a 60 percent decline compared to last year—which is more than double the overall decline (26 percent) in consumer spending.

During the Kingpins24 event last week, Don Unser, NPD Group president of retail, shared how his team has been meticulously adjusting consumer data reporting to reflect the unique circumstances. Data sets were moved from a monthly to weekly cadence, as the team anticipated more abrupt behavior changes that they’d want to capture.

Second, data was analyzed from a geographical standpoint, as areas of the country were being affected at different rates.

“We’re trying to figure out what the consumer is thinking about and where else the consumer is spending,” said Unser, noting that in place of apparel, shoppers are spending on things like office supplies, toys and games—“the categories that lend themselves to being home with with your family and working from home.”

While online shopping is increasing, Unser says it’s not enough to make up for the loss of in-store sales.

However, it’s not all bad news for apparel companies, as shoppers will eventually get back to spending once lockdown orders lift. Unser advises companies to prepare for that day accordingly.

“The biggest questions that we’re getting from brands is ‘how much product should I be making,’ and ‘what should I be thinking about in order to support all the places I distributed my product today,” he said. “And I think those are the right questions to be asking.”

Though the answer is simple, the execution is anything but. Unser recommends keeping a “very close eye on demand” and paying attention to the signals that indicate demand is coming back in certain categories. From there, use that data to determine how to distribute accordingly—and keep in mind that it could look different from how it’s always been done.

“[Companies should ask themselves] ‘are there different places we should be thinking about distributing our product?’ and ‘are there places we’ve distributed products before that are no longer going to be available?’” he said. “Unfortunately, there are going to be some casualties of places we sell products today.”

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