For many of us, the year 2020 can accurately be referred to as “the year of the elastic waistband.” With store closures, event cancellations and people sheltering at home, there has been little need to wear “real” clothes, let alone shop for new outfits. Now, as more consumers become vaccinated and begin their post-COVID plans, industry experts predict they’ll be updating their wardrobes for new experiences. With a return to normalcy in sight, retailers must be prepared to meet customer demand while delivering the seamless and convenient experience consumers have become accustomed to during the pandemic. Here are some key statistics to help brands strengthen their supply chains and gear up for a fashion revival.
Fashion Embarks on Post-COVID Road to Recovery
- Although clothing and accessories sales plummeted almost 90% a year ago, Wells Fargo analysts find that store traffic is up and margins are growing
- As of March 2021, U.S. retailers had plans for 3,344 new stores and 2,649 closures (this is a new trend, as store closures have far surpassed openings in recent years)
- Retail executives expect post-COVID-19 ecommerce penetration to increase 25% to 40% across categories, which will drive retailers’ investments in real-time inventory tracking and the conversion of stores into fulfillment centers
- A McKinsey survey shows 34% growth in customers purchasing footwear most or all online and 48% growth in customers purchasing apparel most or all online
- What’s motivating these purchases? Out of more than a thousand shoppers who participated in a Digital Commerce 360 survey earlier this month, 41% said they made an apparel, accessory or shoe purchase to replace something in their wardrobe, 36% were inspired by the changing weather and 35% simply wanted to freshen up their wardrobes
Omnichannel Becomes the Future of Retail
- More than 1/3 of Americans have made omnichannel features such as buying online for in-store pickup part of their regular shopping routine since the start of the pandemic
- 2/3 of retail executives cite the growth of omnichannel and digital shopping as the most significant trend affecting the industry—and its greatest challenge
- 46% of retail executives plan to increase their investment in omnichannel retailing moving forward, compared to their plans prior to COVID-19
- 51% of retailers cited ecommerce platforms among the top three budget priorities for 2021
Returns Climb Amid Ecommerce Surge
- Per Narvar, the number of ecommerce packages returned in 2020 rose 70% from 2019 due to the increase in online shopping and uptick in “bracketing” (buying multiple versions of the same item—usually apparel—to try them on and return the ones that do not fit)
- In a Digital Commerce 360 survey, 62% of consumers said they bracketed an online purchase in 2020, up from 48% in 2019
- The most common reasons consumers are bracketing now more than in years prior: Weight gain/loss and uncertainty of new size (41%), inability to try things on at stores (31%) and purchasing from new retailers (21%)
- In the same survey, 26% of shoppers said they will factor in free return shipping before making a purchase
- A Narvar survey found that of shoppers whose last return was “very easy,” 46% were able to drop the return off at a convenient location, 43% were informed when the refund was processed, 38% got an instant refund and 32% received an updated status of the return
Consumers Care About Environmental, Social and Governance (ESG) Issues
It is critical for brands to map their supply chains and understand what is happening at every tier; in fact, a company’s reputation depends on it. If a company is unaware that their supplier is using a subcontractor that they did not authorize, and that subcontractor engages in unethical or illegal labor practices, the brand’s reputation is at risk for irreparable damage.
- 1/3 of participants in a McKinsey survey said they stopped using a brand based on its social actions; 71% indicated they would lose trust in a brand forever if it placed profits over people
- 66% of consumers said they would stop or significantly reduce shopping at a brand if they found it was not treating its employees—or its suppliers’ employees—fairly
- Gen-Zers are willing to pay more for products that support their values, and 80% of that generation refuse to buy goods from companies involved in societal scandals
The Rising Trend of Sustainable Fashion
- According to McKinsey’s State of Fashion 2021 report, sustainability is the second biggest opportunity for retail behind digital, with more than 3 in 5 consumers saying environmental impact is an important factor in making purchasing decisions
- 67% of consumers consider the use of sustainable materials to be important when buying clothes, while 63% also look at the way a brand promotes sustainability
- As much as 12% of fibers are discarded on a factory floor, 25% of garments remain unsold and less than 1% of products are recycled into new garments. With consumers’ growing concerns about sustainability, the fashion industry must focus on building and scaling strategies around circularity—reducing, recycling, refurbishing, reselling, renting and repairing items
“Dupe Influencers” Become a Growing Concern
Because legitimate brands go to great lengths to ensure their supply chains comply with labor, safety and environmental practices, they should be wary of a fast-growing group of influencers promoting counterfeit merchandise.
- According to a report released by the American Apparel and Footwear Association (AAFA), “dupe influencers”—those who use their social media platforms to promote counterfeit merchandise—are becoming a growing threat to reputable brands. These influencers are using hashtags to attract new followers and increase online engagement, and as of a month ago, #designerdupefinds had more than 6.5 million associated views on TikTok
- By 2022, the influencer industry is set to be worth $15 billion, and counterfeit goods will displace roughly $1 to $2 trillion of global sales
Retailers to Strengthen Partnerships with Suppliers
- In April 2020, around 3/4 of sourcing executives reported cancelling orders during the first wave of the pandemic. Some brands didn’t just cancel their orders—they refused to pay for completed goods, jeopardizing the livelihoods of millions of garment workers and exposing the need for stronger partnerships between brands and suppliers
- Last year, 35% of fashion executives said they expected resilience and partnerships in the supply chain to be a top theme in 2021
- 73% of fashion executives expect that companies will increasingly enter closer partnerships with suppliers and reduce transactional supplier relationships in 2021
RFID Technology Makes a Comeback
As ecommerce grew during the pandemic, so too did the need for increased supply chain visibility. The use of Radio-Frequency Identification (RFID) tags is becoming more widely adopted with the growth of ecommerce due to improvements in labor efficiency as well as traceability at the pallet or unit level.
- Over the last decade, costs of RFID tags have fallen by 80% while accuracy has doubled and range has quintupled; prices have dropped by nearly 50%
- In-store RFID benefits: 99% inventory accuracy, 60%-80% stockout reduction, 2%-12% sales lift and 10% shrink reduction
Don’t Wait to Prepare for Peak Season
If this year’s peak season is anything like last year’s, the time to prepare is now—especially if fashion makes the comeback industry experts are predicting.
Import volumes are projected to remain at record or near-record levels as retailers replenish and build their inventories to prepare for the back-to-school and holiday shopping seasons. According to FreightWaves, as retailers continue building up their inventories, they will face even higher shipping premiums—and potentially caps on their imports due to a trans-Pacific shipping network that has reached its limit. Retailers may also face delays due to port congestion heading into the summer-fall peak shipping season. Be sure to consult with your supply chain partner and build a plan to get your products in without racing against the clock or blowing your budget.
It’s also important to consider implementing a multicarrier solution. Retailers who had their volumes capped by major national carriers during last year’s “Shipageddon” were left scrambling to find another option, and a multicarrier solution can mitigate the risk of that happening again.
Visible is here to help you prepare. Whether you need customs brokerage support, facility space for your imports or a fulfillment solution that speeds up delivery to your customers, we’re here to help your business thrive—now and in the post-pandemic environment. Fill out our contact form or call 877.728.5328 to talk to an expert today.
Sources: McKinsey, RILA, Retail Dive, AAFA, BigCommerce, NRF, FreightWaves, Shopify, Business of Fashion, Digital Commerce 360, Narvar