It’s no secret that the COVID-19 pandemic has changed how people shop, but for retailers that sell items that are now unpopular to buy, how do they react? When the pandemic spread, Hugo Boss, most known for its business wear and suits, needed to completely change its on-site merchandise strategy to reflect the current state of “work from home” attire, now that quarantined consumers are reaching for more comfortable hoodies and t-shirts.
With the unemployment rate reaching nearly 15 percent in the U.S., uncertainty regarding the country’s economic conditions is causing nearly 49 percent of shoppers to pull back on discretionary purchases and prioritize only items that they need, while 42 percent say they are bulking up their savings, according to a study from Bizrate Insights and CommerceNext. As a result, fewer shoppers are buying suits, dress shirts and other garments typical of the office environment.
During CommerceNext’s recent webinar, “Digital Acceleration is the New Normal for Ecommerce,” Tim Hartman shared how the German fashion retailer acted quickly to update its e-commerce presentation when its main product line was put on the backburner.
“We changed our stories, our site architecture, our navigation and we shifted the messaging,” the vice president of digital commerce at Hugo Boss said during the webinar. “We actually had a big wedding campaign planned and it just didn’t make sense to go forward with it anymore. You just had to be relevant during this time. We also started to see the site as a little bit of an information center too. People wanted to know if their orders were saved, if their orders were coming in on time and what we were doing to help fight it at this time.”
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The company has tested new delivery information on both the home page and the product page, and as such as seen significant conversion rate due to the transparency of information. But Hartman pointed out that the communication itself seems to be more important to consumers at this point than the immediacy of the delivery, especially as shoppers aren’t going to events.
Jamie O’Gorman, global vice president of client services at customer data and experience platform Exponea, shared that one retail client saw 45 percent of traffic go to its return policies page on the first week of the lockdown. “Delivery speed is not nearly as important as safety or quality right now,” O’Gorman said.
Similarly, Hugo Boss had to make amendments to its supply chain when its 60 U.S. stores shut down to curb the outbreak. Remaining inventory shifted to the Hugo Boss e-commerce distribution center to fill an expected increase in orders. As part of the e-commerce pivot, the retailer increased its return window and upped the staff on its customer service teams to answer consumer questions or ensure that new rules for products were put in place.
In one example, employees were required to keep shipments in a distribution center for 48 hours as a precaution before they were shipped out to online customers.
“What I’ve seen now has been a flattening of the organization on our end,” Hartman said. “In the times of crisis or change or disruption, you don’t necessarily have the luxury of time to have several meetings before approval, to be able to put all the presentations together or be able to gather 110 percent certainty before you make a decision. We worked to enable the people that were closest to it to make those decisions.”
Hugo Boss has created a task force that meets once a day to discuss wider problems, understand potential changes in shopping habits or trends related to the current crisis. The task force also discusses current issues such as the stage of COVID-19 spread in China or Europe to examine how far behind they may be and prepare for how they want to approach the coming weeks.
Despite how coronavirus has compelled the brand to find quick and creative solutions, Hartman doesn’t foresee COVID-19 being the sole driver of innovation.
“We launched online styling appoints because people couldn’t come into stores, but people also wanted to talk about what they wanted to wear,” Hartman said. “So is that COVID related? I don’t think that’s helping in our fight against COVID. It’s more related to people staying at home. People still want to have some kind of experience—their experience was just hindered because they don’t want to get sick in a store with a lot of people with masks on and sanitizer. I think they will still want a little bit of relief and enjoyment in retail.”
For the most part, when the pandemic subsides, most shoppers will likely be comfortable with buying more formal attire from Hugo Boss: 80 percent of shoppers say they will spend the same on apparel as they did prior to COVID-19 when the economy opens up to regular shopping again, the Bizrate Insights and CommerceNext survey said.
This total is sixth highest among the 13 categories studied, with the top percentages of shoppers spending as much on health, personal care and beauty (93 percent), home goods and kitchen supplies (86 percent), grocery, food and beverage (86 percent).