The Covid-19 pandemic has overwhelmed many fashion retailers, and it appears that trend is unfortunately going to be a recurring theme throughout the peak season, especially for smaller businesses already lagging behind. Nearly half (47 percent) of small business fashion retailers report feeling unprepared for the holidays since they have not optimized their e-commerce operations, with 22 percent saying their future depends on holiday sales, according to a PayPal study.
Additionally, 57 percent of fashion merchants believe they are doing less than retailers in other verticals to prepare for the holiday season, so it’s clear many of these businesses feel they are in a bind.
Even with the lack of investment, the 22 percent that proclaimed their dependence on the holiday really hits the fact that there is a sense of urgency for SMBs hoping the season reignites sales. The study recommends that one of the best ways retailers can rekindle business activity is by being adaptable in what they offer shoppers.
For example, despite the overwhelming global need for personal protective equipment (PPE) such as face masks, only 17 percent of the 200 U.S. fashion retailers surveyed by PayPal actually offered face masks as a result of Covid-19. This represents both a major opportunity for these retailers going forward and also a missed opportunity since they likely left easy revenue (and goodwill) on the table.
And only 24 percent of these SMB merchants are expanding their online shopping offering, showing that most are still limiting themselves on differentiation.
For those fashion retailers that are offering more products, there’s at least some direction on where they can go—after all, the mass shift to remote work, video calls and virtual social gatherings has made consumers more pragmatic in their approach to fashion. Fashion retailers report seeing an increase in sales of “waist-up” apparel, with a 27 percent increase in sales of fashion tops, while sales of pants and skirts are down nearly the same proportion (30 percent), the survey said. To meet consumers’ demands, retailers should be focusing their efforts on buying, selling, and advertising for the webcam-friendly fashion trend.
Providing options for shoppers to “dressing down,” even if it’s not part of the fashion brand’s core offering, is still highly recommended. And in yet another scenario where the retailer isn’t adapting fast enough, sales of loungewear increased 36 percent, yet only eight percent of these merchants actually introduced new loungewear offerings throughout the pandemic.
Vogue Business shared the results of the PayPal study in a recent webinar, backing up the need to bring more products into the fold by revealing results from its own consumer survey that more than 65 percent of shoppers say a retailer’s breadth of assortment affects their purchasing decisions. At the same time, 70 percent of the 1,507 U.S. respondents surveyed said supporting a small business plays a factor in what they decide to buy.
SMB fashion retailers could also stand to not only give their shoppers more product options online, but also offer more payment options as well. The recent explosion of “buy now, pay later” platforms enables shoppers that may be wary of paying with a credit card to buy in manageable increments instead of in one fell swoop.
According to the PayPal survey, 42 percent of fashion retailers agreed that installment payments options can help combat shopping cart abandonment and increase sales.
“Consumers are excited to be able to pay [with pay later options] because it gives them more control,” said Greg Lisiewski, vice president and general manager of global pay later products at PayPal. “It helps consumers in the midst of these uncertain times with a tool that helps manage their cash flow.”