Shoppers have slowed down significantly when it comes to spending, and brands and retailers are delving into potential tactics to recoup their losses.
Many fashion insiders are weighing the benefits of a pack-and-hold strategy, wherein this year’s out-of-season goods would be saved for a debut in 2021. Rather than liquidating merchandise through deep discounts over the coming months, brands would have a chance to sell their wares for full price down the line.
According to Jay Hakami, CEO of Skypad, a platform that leverages sell-through analytics to help brands and retailers understand consumer trends, the practice could prove beneficial for mid-level brands and retailers.
Gap, for example, recently announced its intentions to hold its summer and fall inventory until next year’s selling season.
“They are not a high-fashion designer—they sell jeans and casual wear,” said Hakami, who doubts the brand will experience a huge, year-over-year shift in appetites. “If the clothes were not displayed this season, they can move into next year with no problem.”
Hakami sees this as a financial decision over a merchandising one. While it may not make for an exciting start to a new selling season, it could do wonders for the company’s bottom line.
Luxury brands, however, will face a different set of challenges. Storing haute couture designs for another year—when color palettes and tastes may have changed—is a risky bet.
“Luxury retailers are proceeding with online shows, and they’re very creative,” he said. “If you’re a consumer who has seen those products out there, obviously the brand can’t pack them away—they have to put them out into the world.”
But in a world ravaged by COVID-19 and teetering on the brink of economic collapse, high-fashion labels may have a hard time proving their relevance.
“Luxury brands need to maintain their status,” Hakami said, warning that discounting products to incentivize sales could have a major long-term impact on brand equity.
“These are emotional purchases that allow people to stand out, to feel unique,” he said. Luxury players know how to control their distribution to make products feel rare and special, and anything that disrupts that illusion in favor of sales could ultimately hurt brands more than it helps, he added.
Hakami also believes there could be an uptick in consumer appetites for luxury goods come fall. With travel plans canceled for the foreseeable future, shoppers may be jonesing for a fashion fix.
“But if you can’t show off the product you’ve bought to be unique, different and special, then you’re going to think twice about buying,” he countered. “If we get another wave [of infections] in the fall, then I believe people will wait.”
Some surprising color trends have emerged this spring, said Hakami, who believes they could hold clues to consumer mindsets heading into the coming seasons. Accessories, shoes, bags and apparel in certain hues have taken huge hits since the pandemic started, according to Skypad’s analytics.
“I think the media created an association between COVID-19 and red,” Hakami said, noting that sales for the color dropped by 45 percent since March.
Navy products dropped by a whopping 50 percent during the same period. “Navy stands for stability, and none of us have stability,” Hakami said. There’s also a perception that deep blues befit professional attire, and at the moment, many consumers are among the tens of millions out of work.
Even classics like black and white have fallen out of favor, by 35 and 38 percent, respectively.
“This is the first time we’ve seen a decrease in black,” Hakami said. “Black makes us look taller and skinnier, but we’re seeing less of it because you don’t need to wear it in the house.”
Instead, shoppers are opting for neutrals and cheerful colors, he added. Loungewear and athleisure have skyrocketed in recent months, and everything from brights to pastels have proven popular with shoppers.
“People are getting comfortable with being comfortable,” Hakami said, adding that the trend toward more casual dressing will likely continue even after the pandemic.
He also believes that shoppers may be hoping for more color than usual this fall. Browns, blacks and greys could be replaced with jewel tones. After all, this spring has been dark enough.
“We don’t need doom and gloom,” he said. “We need bright pick-me-ups.”