This is the time of the year, usually, in a fashion cycle that lends itself to summery drapes, trendy classics, pretty motifs and floral prints, holding out the promise of a ‘refreshing’ summer collection. Shoppers, predictably, are taken in by this deluge of trendsetting (and instagrammable) fashion statements and buying the latest styles to spruce up the wardrobe.
But the situation has changed dramatically this summer season. And how! The coronavirus crisis has dealt a severe blow to the apparel industry, which is looking at zero offline retail sales and even the online sales have been cut down to size. Finding a market for manufacturers and retailers has been tough and will continue to be, given the 360 degree change in the consumer mindset.
The demand for cotton globally has also nosedived, with the United States Department of Agriculture (USDA) lowering its forecast for global consumption by 6.4%. As per a USDA report, this represents a loss of about three and a half weeks of global spinning or about 16% of the expected spinning March through July based on the March USDA forecasts.
This draws from the mills in China, Vietnam, Pakistan and other countries downing shutters with the Covid-19 scare at its peak. Besides, no one’s priority at present is really to buy clothing categories and the attention, expectedly, has been directed towards essential products.
Closer to home, another development that came in earlier this week in India was the recent directive by the Ministry of Home Affairs (MHA) stating that the supply of non-essential goods by e-commerce companies will continue to remain prohibited during the lockdown. This was in context of the lockdown restrictions that had to be relaxed in some districts from April 20.
For retailers who have been facing a severe cash crunch due to lack of demand and business activity, this dashed their hopes further for any early movement towards recovery. The path ahead, feel retailers, will be excruciatingly slow and tough to manoeuvre. “Everyone is focusing on essentials right now. Fashion retail is among the worst hit sectors. Fashion has an innate connection to socialising. That explains it well enough as all social gatherings are now a thing of the past. Even when the lockdown is lifted, things won’t return to normal quickly enough,” rues Tanvi Malik, co-founder of brands such as FabAlley and Indya.
Online is where the heart is
Malik had been hopeful about the relaxations so that some of the ecommerce operations for their brands could be resumed from Monday. But she has now reconciled herself to the new guidelines that have come in. “It is status quo till May 3. We will continue some of our online orders which are ‘buy now, ship later’ ones. The 6-7 week period has pushed us back already. The relaxations sure would have been a bonus, but we had already assumed that cash flows would remain a constraint till the lockdown period. So it won’t change much for us,” she says matter-of-factly.
As is the case in the rest of the sectors, apparel retailers have also been battling with fixed cost overheads such as wages, rents and other expenses that need to be doled out. FabAlley, for instance, decided on a 20-25% pay cut across the management, with the founders opting for a 60% cut in their salaries. While offline retail was 65% of their business, online constituted 35%.
However, the orders on the website have seen a sharp dip to 50-100 orders a day as against 600-700 per day previously. “The plan right now is to focus on online retail. We are taking orders on our website which we will ship at a more conducive time. Though there has been a drop, people are still placing some orders. We are focusing on online in the immediate short term. Ecommerce is the first channel that will pick up,” adds Malik.
Similar is the story with denim brand Lee Cooper which is seeing an opportunity in its digital business in the times to come. The brand is changing the way it is communicating with consumers across the varied social media channels. “Shopping from home is being given a preference and we are getting constant feedback from people. We are engaging them more via interactive campaigns than just with the target of selling in mind. People need to have confidence in the brand and the mind needs to be relaxed,” asserts Hetak Kotak, CEO, Lee Cooper.
Fashion ecommerce company Myntra too has upped the ante, rolling out celeb-style updates and fashion influencer content through its ‘Myntra Studio’ initiative. “Engagement-led commerce will be the way forward and shopping online will certainly weigh as an option for consumers in both the Covid and post-Covid era. We will read consumer sentiments and react to it more quickly, with the ability to modify our offerings to meet changing demands and trends,” says a Myntra spokesperson.
Post the MHA guidelines, the Myntra app shows that they are now catering to orders for personal care essentials, protective masks and products that will be more relevant in the present context.
Necessity, thy name, is innovation
Sensing the need of the hour, brands are taking to out-of-the-box strategies to be in step with the ‘new normal.’ Online fashion retailer Koovs’, for instance, is offering discounts and accepting prepaid orders right now, which would be dispatched after the situation permits, as mentioned on their website. As part of its #21DaysWithKoovs campaign, the brand has a concept for the Work From Home (WFH) population called #AboveKeyboardDressing. “It is a fun image-led concept targeted at engaging with the WFH professionals. With video meetings becoming the new norm, dressing waist up is definitely a trend to watch out for,” highlights Mary Turner, CEO, Koovs.
Same is the case with FabAlley and Indya, which have altered their design lines based on the demand patterns that are undergoing a shift. The focus now is more on loungewear and a WFH line which they have recently launched. Plans are also underway to focus on ‘recession proof’ fashion lines or, essentially, the apparel style categories which people will invest in irrespective of the economic climate. This, they say, will hold them in good stead post lockdown.
For Lee Cooper, it is more about WFH ideas that are coming to play and brainstorming sessions for ‘stylish’ masks which are in the works. “We are partnering with people for such masks. Manufacturing is yet to start, but it will be a fast turnaround. How to make it more interesting is something that is being worked out right now,” adds Kotak.
Fashion brand Benetton is giving priority to strong cash management, tight inventory monitoring metrics and fine tuning future orders. “Our company is trying to address the needs of all our stakeholders across the value chain to ensure business continuity and bounce-back once the lockdown is lifted up,” reveals Sundeep Chugh, MD & CEO of Benetton India.
A whole new world
Several of the retail industry players that ET Digital spoke to emphasised that these winds of change will herald a new order for their ilk and others.
Associations such as Circular Apparel Innovation Factory (CAIF), an industry-led initiative by Intellecap, feels that it has become even more imperative that organisations reimagine and reframe their equation with the planet and the people on it. “We are in conversations with our stakeholders across the value chain to ensure that in the mid-long term, the sustainability agenda isn’t lost to competing business priorities,” says Venkat Kotamaraju, Director, CAIF.
Others stress the significance of setting aside a certain pool of money which can come in handy in such unpredictable situations. Making a business model that is self sufficient and not dependent on additional influxes of capital were some other suggestions floated to safeguard retail brands in such trying times. “One has to leverage what one already has instead of looking at new assets right now. This Financial Year will be tough for everyone. It is the year to fix the processes. FY 22 can rejig growth levels,” asserts Malik of FabAlley, exuding an assured sense of optimism.
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