Coronavirus has quickly come in, upended markets and economies, and changed the way consumers live, work and spend. And looking ahead to a post-pandemic future might uncover a picture entirely unlike what fashion has known or prepared for.
“The global economy is forecast to enter its worst recession since the 1930s, hitting every sector from hospitality to education and finance,” according to a new Euromonitor International report on how consumer markets will evolve after coronavirus. “Uncertainty remains high, but what is clear is that economies will not emerge unscathed and the daily routines and lifestyles of consumers will shift to accommodate continued social distancing.”
As consumers battle deteriorating earnings or unemployment, markets for non-essential goods are already contracting—and some in a big way.
According to Euromonitor data, while the apparel and footwear category was expected to see growth at nearly 2 percent pre-pandemic, the market research company is now forecasting a nearly 11 percent contraction. For luxury goods retail sales, which were slated to grow nearly 3 percent, the shrink could be upward of 18 percent.
“We are now in unchartered waters as consumers of all ages, income levels and cultures deal with two major crises in one: health safety and recession,” Euromonitor said. The crises have already fueled “significant shifts” in who is shopping where, and how often. “Older generations have shifted to online shopping, whilst younger consumers are shopping less frequently and stockpiling some staple products. This all implies changes to how retailers and brands market to consumers.”
Those changes, as Euromonitor analysts outlined, will be impacted by six key themes currently affecting the consumer.
From sustainability to purpose
The new post-pandemic mantra for brands and retailers will have to be “purpose over profit,” according to the report.
While the conversation around sustainability had centered on climate change and things like reducing plastic use, consumers will now expect a more holistic approach to sustainability that includes a path to creating social, environmental and economic value. The new world will see brands interested in survival prioritizing purpose alongside protecting the bottom line.
“Companies are moving production to the pursuit of the greater good through ethical values and brand positioning,” Euromonitor said. “Health, beauty and fashion brands must invest more in locally produced goods now more than ever and concentrate on their brand heritage, transparency, safety and provenance.”
Hometainment and the new experiential consumer
Now that consumers have gotten used to spending more time at home, whether they’re into it or not, many will be looking to access more brand experiences and offerings from the comfort and safety of their homes. Whether it’s personalized luxury experiences or wellness routines or some kind of masterclass, expanded experiences will create new strategic opportunities for brands.
“Augmented and virtual reality, combined with holographic experiences, will transform the online shopping channel by placing consumers in quasi physical store conditions,” Euromonitor said. “Luxury experiences will be more focused on the at-home universe, and brands will need to secure high-quality and meaningful experiences with all channels.”
Where and how consumers shop
With stores closed either over the pandemic or protests and shoppers looking to minimize their outings accordingly, e-commerce consumers are stepping up their buys online and brick-and-mortar loyalists are looking for more accessible options, too. Even as more store reopen, brands and retailers will need to consider that a potential second wave of the coronavirus, plus long-lasting social distancing measures could still mean dampened demand for physical retail.
“The distribution of beauty and fashion products is being heavily impacted by COVID-19 given its physical retail dependence, over-reliance on wholesale and underdeveloped e-commerce capabilities,” Euromonitor said. “COVID-19 has emerged as the ultimate retail disruptor, with the potential to accelerate e-commerce adoption, expand click & collect formats and catalyze frictionless retail and D2C operations worldwide.”
While wellness was already a rising trend among consumers keen to take better care of themselves pre-coronavirus, the post virus world will see that trend accelerate in a big way. Digital and tech-enabled self-care solutions will gain greater relevance, and consumers will spend on products and services that de-stress, soothe and improve their at-home therapy.
“Mental and emotional wellness takes center stage, with the notion of happiness becoming a more tangible commercial prospect,” Euromonitor said. Beauty and wellness convergence will become even more prominent, and brands will have to find new—and in some cases, digital—ways to support concerns related to sleep, stress and anxiety, and luxury wellness brands will have to shift to a focus on mental, emotional and spiritual health.
Innovation and the new ‘core’
Though many brand are still in crisis mode, battling to bring their businesses back afloat, most will have to quickly adopt a new core set of values that will serve as the foundation for new developments. Innovations that provide home-based services, like beauty consultations and DIY content, will be key post COVID-19.
“Companies are reorienting around simpler, more cost effective product lines like private label and general health products, and by streamlining manufacturing processes,” Euromonitor said.
The ‘new normal’: What’s here to stay?
As consumers start to consider resurfacing, many will still be struggling with what the report called “risk dread,” and with a large swath of the population still working from home and students still learning from home, physical stores could still find themselves with dismal foot traffic.
“Shopping will also be conducted largely from the home, and remote learning, gaming, cashless and proximity payments will all either ramp up or become the norm,” Euromonitor said. “Consumers’ mindsets will switch to reduced consumption of non-essential items and anti-ostentation, a focus on self and family and on preventative and immune health. Companies will focus on maintaining value sales as consumers find themselves in a recessionary era with reduced discretionary income.”
On the supply chain side, Euromonitor analysts expect companies will continue to diversify their operations, while ramping up investments in digital tech and virtual experiences to maintain engagement.