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April’s Online Apparel Rebound Breeds ‘Cautious Optimism’

Things just might be starting to look up for apparel e-commerce.

With 49 percent of apparel retailers now reporting that their e-commerce sales came in ahead of plan from March 29 to April 11, well ahead of the 28 percent that reported as much between March 15 and March 28, according to CommerceNext, the apparel sector’s attitude could be described in one term: “cautious optimism.”

During a recent webinar, Sucharita Kodali, vice president and principal analyst at Forrester Research, and J. Bennett, vice president of operations and corporate development at fraud protection platform Signifyd, each shared survey results based on transactions since the start of the COVID-19 pandemic, echoing that all categories, even apparel, have had a bounce back in April.

Overall, 43 percent of e-commerce executives now say that online sales are tracking significantly ahead of their set goals. Those that were “ahead of plan” mostly credited the bump from store traffic migrating online (56 percent), while nearly half (49 percent) attributed it to driving demand via marketing. E-commerce traffic is trending up as well, with 31 percent of retailers reporting significantly higher traffic compared to the weeks prior—above the 23 percent that said so in the previous study.

“The single biggest change has been how rapidly retailers are moving, how rapidly they are realizing they can move and how much a lot of unnecessary bureaucracy got in the way of decisions,” Kodali said. “I hope that that ends up being one of the great byproducts of this―it’s huge for catching up after being put on pause for so long.”

Rebecca Traverzo, vice president of marketing at Thirdlove, said during a panel discussion in the webinar that she believes the intimates brand has benefited from consumers getting used to the “new normal,” particularly in the wake of the recent stimulus bill.

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“I think consumers are feeling a lot more comfortable and confident in the economy and are less concerned with a possible recession,” Traverzo said. “They’re starting to spend money not only on things that they need but that they actually want. We’re seeing that in our business today, especially as a women’s intimates brand as people are working from home and not necessarily wearing bras every day. Seeing this positive and sustained trend in our business is really compelling, but we are still being very cautious in our optimism.”

Bennett cited both fashion and footwear as e-commerce verticals that have overcome challenges to continue selling during the pandemic. Both categories saw a pullback early on as consumers flocked to essential retailers for their online shopping needs, but then have seen a resurgence in the weeks since.

According to Signifyd, gross merchandise value (GMV) for fashion purchases that averaged $250 or less was at its lowest in the week of March 16, but has since skyrocketed more than 50 percent by the week of April 13. From the week of Feb. 24 to April 13, GMV grew 24.8 percent.

“In general, a lot of the problems that we saw with fashion demand in March were also due to the inability to fulfill,” Bennett said. “Many retailers had their store shutting down, they had their operational headaches of reallocating their teams if they could, or furloughing or terminating in the worst-case scenarios. Now, retailers have been able to refocus those efforts to delivering online, they’ve gotten their fulfillment centers deemed to be essential, they’ve got the safety requirements set up to where their employees can work safely in those centers and demand has returned.”

Bennett noted that these are positives for retailers, but he also reemphasized Kodali’s point that many of these sales have been driven by promotions, making it unclear of just how much that needs to be maintained.

He also revealed a major difference in the dynamic between fashion purchases averaging $250 or less, versus the much smaller segment of those averaging between $250 and $550. These purchases peaked during the week of March 23 due to excessive promotions timed with new product launches, before leveling off in the two weeks afterward. In total, GMV grew 35.4 percent, well ahead of the lower basket-size counterpart.

“New product launches, when handled with marketing care and driving to existing customers are experiencing excellent success,” Bennett said. “That seems to be a winning opportunity. You see plenty of folks that are launching new shoe lines, new product lines, and those are finding a lot of success. Consumers are excited about those opportunities.”

Travenzo indicated that ThirdLove experienced similar rebounds to the results from both CommerceNext and Signifyd starting in the beginning of April, but that the company has not done promotions or discounts for its brand throughout the coronavirus pandemic.

What’s more, ThirdLove is seeing a decrease in returns during COVID-19, she added, which is a big deal for an e-commerce company so intent on understanding shopper size and fit dimensions.

“We haven’t changed our return policy,” Travenzo said. “We have a 60-day wash it, wear it, fit guarantee promise, and we’ve seen return rates decline. But we have opened up a partnership with Returnly for customers to be able to return packages at their local establishes such as CVS or Walgreens.”

Signifyd data revealed that across the board, returns are down 25 percent due to lack of access to process a return, and new users typically generating ing lower return rates.