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Fashion Retail Must ‘Decode’ Shoppers to Recoup Sales—and Quickly

If ever fashion retail needed to make smarter decisions, that time is now—or rather, it arrived about six weeks ago.

And with sales tumbling and most discretionary stores still closed, purveyors of apparel are desperately seeking to squeeze every possible dollar out of e-commerce, competing for the attention of consumers more concerned for the moment with keeping their pantries well stocked than freshening their wardrobes.

In the face of unprecedented disruption, the business of selling clothing and shoes must seize on every weapon at its disposal, and that’s where a company like Edited comes in.

Earlier this month, London-based Edited, which bills itself as a retail decision platform and the world’s largest repository of the real-time product data, announced $29 million in new growth equity funding from a cadre of top-tier investors, including Boston-based Wavecrest Growth Partners, Beringea UK, Hermes GPE. The infusion of new capital is notable not only for its validation of Edited’s rich roots in data, analytics and artificial intelligence but also because the coronavirus pandemic has dropped a grenade into a plethora of financial dealings, from the Sycamore-L Brands imbroglio to a men’s wear contretemps across the pond.

Edited CEO Geoff Watts sympathizes with apparel and footwear retailers that have seen digital’s share of their business skyrocket to 100 percent from a mere 5 percent or 10 percent in a matter of days or weeks.

“That’s an incredible shock anyway you cut it,” he said. Seventy-two percent of e-commerce executives polled for a Yottaa survey said they’ve seen a sizeable jump in web traffic since the pandemic hit. Another 74 percent have pivoted to a digital-only strategy while brick-and-mortar remains persona non grata and 69 percent hope to recoup lost store sales through their digital channels, according to data collected the week of April 9-14.

Retailers, Watts said, are seeing the entire consumer landscape shift beneath their feet. “All of the things that drive retail have gone away,” he said. The back-to-school shopping season and summer vacations that spur sun-seeking sojourners to snap up the season’s stylish swimsuits, he said, are “just not a thing.”

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Despite the overnight unraveling of all that makes retail tick, some shoppers are still shopping—and merchants must be ready. A Bluecore report examining year-to-year e-commerce trends in April shows a 20 percent uptick in the apparel sales, and a 27 percent bump just since February. According to the marketing technology firm, the data indicates a 43 percent rise in first-time purchasers on top of the 78 percent more consumers making their second purchase from a brand. That could be the result of the many promotions and discounts retailers have thrown at consumers in an effort to grab any sale they can.

While retail figures out how to manage the moment at hand, greater uncertainties lie ahead, too. “When the world emerges from this, all bets are off,” said Watts, adding that some Edited clients are taking this unexpected pause to rethink their pricing and sizing strategies while others grapple with the prospect of effectively selling 2020’s stock in 2021. That’s just one option, however; French fashion data and trend analytics firm Heuritech suggests retailers move store inventory into e-commerce channels or look for sales opportunities in parts of the world, like Asia, where online and offline are operating with minimal disruption.

“The retail calendar and which week number you’re in have almost no bearing on what to expect in the market,” Watts said, noting the difficulties fashion companies will face when stores someday resume their duties as critical touchpoints on the path to purchase. Rivals will be watching closely to see what happens at apparel stores that have just begun re-opening, albeit with operations adapted for a contactless, socially distant world.

Heuritech says high-waisted pants will continue to resonate with post-pandemic consumers.
British songstress Alexandra Burke attends the Commonwealth Day Service at Westminster Abbey in London on March 9. Heuritech says high-waisted pants will continue to resonate with post-pandemic consumers. Tim Rooke/Shutterstock

A salve for small business

The pain might be most acute for small retailers without the size, scale and relatively deep pockets of the headline-grabbing national mega chains. Not only have the well-intended CARES Act and the Payroll Protection Program designed to help small businesses keep their heads above water devolved into a Hunger Games-esque ordeal for many seeking access to forgivable loans, but many are discovering that many hourly wage earners would prefer to collect from the government (and oftentimes come out ahead) than to live paycheck to paycheck while clocking long hours.

Companies like Faire are doing what they can to aid boutiques and other small retailers. The San Francisco firm, whose marketplace helps merchants find unique wholesale goods and counts apparel as its largest category, came up with a calculator and slider scale illustrating the impact of COVID-19 for each business on the platform. The output, says product lead Fion Nguyen, equates to a retailer’s cash run rate, or the length of time a business could survive with the cash it has on hand before additional capital infusions are necessary.

The pandemic marks “a pretty uncertain time” for retailers, she said, and a “pretty sudden change.” The new platform feature helps users contextualize the strategies that “might make sense” for survival, she added. For some, that might mean purchasing less inventory while others might want to reinvest in categories that might resonate better with quarantined consumers purchasing candles, for example, in lieu of clothing.

To help stem the bleeding, some of Faire’s retail customers are “getting really creative” in the wake of store closures, Nguyen said. They’re leaning into social platforms, she added, connecting with shoppers through Facebook Live and Instagram Live as well as booking personal appointments. And many now offer curbside pickup, too, hoping to drive sales while minimizing employee and consumer exposure.

Choosing the right trends

Much has been made of athleisure’s resurgent popularity—not that it ever went away—now that staying in is the new going out and Zoom happy hours replace regular meet-ups at the local watering hole. But will shoppers still want to stock up on sweats and leggings when the world reopens?

Only time will tell, but retailers will need to get on their assortment “A game” in the meantime and figure out which trends will reap rewards. Heuritech, which analyzes Instagram data to parse trends on the rise and when they’ll hit, says leather pants, rainproof styles and denim dresses put in strong showings among European women’s wear on the social platform last month. For men, denim jackets are appearing in 8 percent more posts year on year, the perfecto leather jacket’s popularity has jumped 68 percent since December and the chore jacket, drawing 23 percent more interest than in 2019, “seems to be a safe choice for the coming season,” it said.

High-waisted pants show little sign of losing their momentum, with straight, flare and wide-leg styles seen for women and “maxi” silhouettes trending for men, Heuritech says. “On another note, the comfy trend imposes high-waisted leggings as a sure value in this period of confinement,” it added.

By Heuritech’s account, shoppers are also ready for wares that suit the warming temperatures. “Nothing says cold drinks and May flowers” like gingham pants, appearing in 19 percent more posts, and white jeans, up 136 percent since the end of 2019.

“It appears confinement has people itching to get back outside in their best spring clothes,” Heuritech said.

Converse hi-tops are set to remain a staple for men, while women are gravitating to “sneakers with dark shades in sporty and casual versions.”

Upcoming footwear collections, Heuritech added, are likely to pull from three trend stories: classic, French-inspired silhouettes from the 1950s, comfort-driven shoes including hiking and “pillow” sandals, and wide-leg boot riffing on the ‘70s and ‘80s.

Statement handles like bamboo or plastic chain links will elevate otherwise simple bag designs, the firm says, while fabric trends call for woven leather details and a continuation of the padded, quilted look from the likes of Chanel. The retro, half-moon silhouette will prominently figure into collections, Heuritech says.

If consumers are able to return to shopping fashion in stores in just a quarter’s time, which seems to be the case as the industry is now testing the appetite for brick and mortar, then retail must “understand how to merchandise and sell the product that they have without leaving a bunch of money on the table,” Watts said, by discounting prematurely, pricing incorrectly or “having gaps in their assortment.”

Plus, he added, consumers are forming new habits that could prove hard to shake. “The habitual retail shopper might just have slightly different stripes in a couple months’ time,” Watts said, “and I think that’s something that some retailers really struggle to decode.”