NEW YORK, United States — The spring lockdowns were a nightmare for Susan Korn.

At the time, her accessories line, Susan Alexandra, generated more than 80 percent of its business through stores like Neiman Marcus and other multi-brand shops. Sales plunged when non-essential businesses were ordered to close. She could do little but watch as retailer after retailer delayed or straight up cancelled orders.

Coronavirus cases are on the rise again, and officials in some states are threatening new lockdown measures. But Korn said she’s ready this time.

Since the spring, Korn has pulled her brand from many stores, adopting a direct-to-consumer e-commerce model. Losing the wholesale accounts is worth it, she said, considering the risks that come with relying on brick-and-mortar stores during the pandemic. She is also able to manufacture her boxy beaded handbags and fruit-shaped earrings to match demand on her website, rather than to meet unpredictable wholesale orders.

Thousands of retailers and brands took drastic steps to save their businesses during the height of the lockdowns this spring, when stores closed worldwide and demand for everything from handbags to button-down shirts crashed overnight. As the pandemic dragged on, makeshift adjustments turned into permanent changes.

Now, the fashion industry’s preparations are about to be put to the test.

Navigating all of this is still a big question mark.

Earlier this week, the World Health Organisation warned that new Covid cases are at the highest level since the start of the pandemic. In the UK, London is facing a fresh wave of lockdown restrictions, while tighter rules are already in place in the country's north. New York Gov. Andrew Cuomo said Monday that a second coronavirus-related shutdown is “possible” if not “inevitable.”

A repeat of the sweeping nationwide closures seen this spring appears unlikely. For the moment at least, government lockdowns are mostly restricted to bars, gyms and other high-risk businesses in the worst Covid-19 hotspots. But fashion brands are still preparing for disruptions; where coronavirus cases are rising, consumers tend to stay away from stores even if they are legally allowed to stay open.

“Navigating all of this is still a big question mark,” said James Miller, chief executive and chief creative officer of the Collected Group, which owns apparel labels Equipment, Joie and Current/Elliott. “But knowing that there’s so much risk with brick-and-mortar, online is more important than ever.”

Hope for the Best, Plan for the Worst

Miller said he’s deliberately underestimating future demand so it’s less likely he’ll be stuck with extra inventory at the end of the winter and spring seasons. This way, he can avoid “bad revenue” from discounts and promotions.

We've left money on the table simply because no one could [confidently] anticipate the inventory liability.

Many brands had to aggressively discount merchandise that went unsold during the spring. It could take years for the industry to work through excess inventory, and brands like Miller’s are doing everything they can to avoid adding more clothes to the pile.

“We’ve left money on the table simply because no one could [confidently] anticipate the inventory liability,” Miller said.

Eric Fisch, national sector head of retail and apparel at HSBC’s corporate banking division, said most of his largest fashion clients have done the same.

“It’s important to continue on that path of conservative planning,” Fisch said. “Because if you go into holiday this year comparing it with last year, you’ll end up with high inventory levels.”

Cut Down on Wholesale

Rowing Blazers is another brand that exited wholesale earlier this year.

The brand, known for its cheeky, streetwear-friendly rugby shirts, relied on third-party retailers for less than 10 percent of sales. That business wasn’t worth the complications that could arise in a second lockdown, including the wave of retailer bankruptcies that would likely follow, founder Jack Carlson said.

Rowing Blazers wasn’t sold at Neiman Marcus, Lord & Taylor or other retailers that filed for bankruptcy during the pandemic.

“But if we did, we would’ve been one of those brands that ended up not being ever paid for a product that’s shipped,” Carlson said. “We just don’t want to create even a risk of that happening.”

Unless they pay me upfront, I won't do it.

When you have wholesale partners to answer to, making quick business decisions becomes more complex. Orlagh McCloskey, co-founder of British label Rixo, said she would have preferred to hold some summer dress styles for next year when lockdowns first hit, but that wasn’t possible due to prior commitments from wholesale partners.

Before the crisis, Rixo’s business was split roughly 70-30 percent between wholesale and its own channels. This balance is shifting in the wake of the pandemic, but wholesale remains important to the brand.

Going forward, the brand is focusing on creating more exclusive products for its direct-to-consumer business, “so there is less of a crossover” with wholesale offerings, said McCloskey.

Susan Alexandra’s Korn said she’s open to wholesale partnerships if the retailer has a strong track record of treating brands well.

“Unless they pay me upfront, I won’t do it,” Korn said.

Invest in E-Commerce

The easiest way to avoid the effects of a lockdown is to invest in e-commerce.

Carlson said that Rowing Blazers will soon unveil a redesigned site that will be easier to navigate and offer features like recommended products on each item’s webpage. Susan Alexandra, too, is in the process of making the site more user-friendly: the brand just hired its first full-time customer service employee and is paying for sponsored ads on social media for the first time.

“Our website [was] just not really optimised for handling the kind of volume of business that we’re now doing,” Carlson said. Part of his site update today, he added, is including the best practices and industry standards he has learned since launching the brand three years ago.

The Customer Connection

Uncertainty around the future of consumer confidence and behaviour patterns complicates any contingency plan. While the US recorded its first major boost in consumer confidence in September after back-to-back monthly declines, confidence still remains below pre-pandemic levels, according to The Conference Board.

Andrea Baldo, chief executive of Danish contemporary brand Ganni said that more than potential store lockdowns themselves, he’s concerned about the impact a second wave would have on consumer confidence.

Keeping shoppers engaged with a brand, even when they don't feel like spending, is key. In the wake of the first wave of lockdowns, for instance, Ganni ramped up its communications with customers with initiatives like a new "Ganni Talks" podcast and an art competition launched on Instagram, where winners would receive a gift card and have artwork displayed as part of an exhibition when lockdowns ended.

“All this was trying to engage the community in a different way, in a much more profound way than what we’ve previously done,” said Baldo.

The outreach efforts helped the brand discover it had more global fans than it realised. Over the next few months, it will focus on growing its digital presence in China and South Korea.

Adapt to the Pandemic Lifestyle

When lockdowns first hit, housebound shoppers couldn't get enough of workout clothes and loungewear. As the pandemic has progressed, the shift towards more casual, comfortable clothing has stuck around. Fashion brands that previously did brisk business in occasion dressing need to be prepared.

Rixo is well known for its silk dresses, a popular choice for summer weddings and Christmas parties. However, with event dressing largely on hold for the time being, the brand has diversified its product mix by offering more casual dresses, doubling down on knitwear and branching into more casual categories.

“We’ve still kept true to our silk dresses as well,” said McCloskey. “It’s just offering a wider range so we’re more agile with what’s happening … so if there is another lockdown and weddings can’t go on until the latter stage of next year, we’re not sitting on a multitude of sequin dresses that can only be worn to parties.”

In terms of buying, Rixo has stopped placing large orders ahead of a season, instead buying smaller quantities in anticipation of being more reactive to the data within the season and placing additional orders appropriately.

Distribute Smarter

With the knowledge that at least half of all apparel sales now take place online, retailers and brands must keep on on the logistics side. This means that if a second lockdown will affect distribution centres, having multiple locations can be a business saviour, said Sarah Willersdorf, global head of luxury at Boston Consulting Group.

Having distribution centres in strategic places will also enable brands and retailers to cut down on costs of shipping, whether that’s in a traditional online warehouse, in stores or even temporary distribution centres set up ahead of the holidays.

Curbside pickup, for instance, will continue to be huge for retailers especially in the case of another shutdown, said Zach Thomann, executive vice president and general manager of PFS, a logistics company. The placement of inventory, therefore, will be either a “big opportunity or risk point” for brands, he said.

So much about being a designer has changed since March.

Allocating too little inventory in stores would result in lost sales or higher e-commerce shipping costs while allocating too much inventory in any location could lead to inconvenient logistics. All three major carriers in the US, for instance, will charge premiums on shipping during the holiday season. This means that retailers will have an interest in reducing the distance every package travels.

In order to survive for the long haul, brands and retailers must be as vigilant as ever in keeping up with these consumer expectations, which will require supply chain flexibility and all kinds of seamless e-commerce services.

“So much about being a designer has changed since March,” Korn told BoF. “For one, I’m not just a designer anymore. I’m a leader and I have a business to run … And I’ve learned so much even though it’s been such a challenge.”

Editor's note: This story was updated on October 15th, 2020, to reflect the news of tighter lockdown restrictions being introduced in London.

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