The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
In Poland, the department store Vitkac is building a "luxury drive through" where shoppers can pick up their Gucci and Ferragamo in style without coming into contact with another human being. In Italy, Elena Mirò, a plus-size women's clothing chain, will allow customers to book appointments to ensure social distancing. In Brooklyn, Shen Beauty, an independent cosmetics store that sells luxury products and offers treatments, is producing hand sanitiser and figuring out how to sell makeup without testers.
These are just a few examples in a global, high-stakes retail experiment, where every store, whether it's operated by an international chain or independently owned, is a laboratory. Though governments and industry associations are offering some guidelines, retailers are, for the most part, winging it. Each must weigh the safety of employees and customers against their need to get shoppers back in the door and spending money.
Some of the old rules still apply: give people a reason to visit and treat them well, and they’ll open their wallets. Other emerging bits of conventional wisdom are brand new: services like curbside pickup and personal shoppers are going to be more common, and not just at luxury boutiques. For many brands, stores will now serve e-commerce operations rather than the other way around.
Only one thing is certain: when people emerge from their homes to shop, the stores they visit will be radically different.
“As far as stores go, no one can predict what’s going to happen there … whether we’ll be back to normal,” said Chris Riccobono, founder of Untuckit, the button-down shirt start-up. “And what is normal? You can’t even begin to guess what that’s going to look like.”
Many retailers are reimagining their stores even as they only have a vague idea of when they’ll be allowed to reopen.
In some places, the post-pandemic retail experiment is well underway. Most stores in China reopened in March, and in parts of Europe, some small shops were allowed to welcome customers earlier this month. On Monday, Texas Gov. Greg Abbott said all stores in the state can reopen on May 1, at 25 percent occupancy.
Elsewhere, including London and New York, stores may be weeks away from opening. And there will be false starts. A mall in Nebraska said it planned to reopen last week; it now says while employees can prep stores, it will be longer before many of them allow customers inside.
Untuckit, which operates about 90 stores in the US and UK, including one in that Nebraska mall, expects few if any of its locations to reopen before June. The company’s financial models assume minimal brick-and-mortar sales until September at the earliest, Riccobono said.
Until a vaccine comes out we're living in a world where stores are going to struggle.
Even when consumers can shop, fashion is low on their list of priorities. At Target, which has remained open throughout the pandemic, apparel and accessories sales plunged 40 percent in April. In China, forecasters say it could take months for spending to rebound. Retailers everywhere are bracing for future lockdowns if there are new Covid-19 outbreaks.
“Until a vaccine comes out we’re living in a world where stores are going to struggle,” Riccobono said.
Health Comes First
Fashion retailers can look to their neighbourhood drugstores and supermarkets to see what health protections they'll need to have in place when they reopen. Masks are everywhere, and usually government-mandated. Gloves, hand sanitiser and wipes are almost as ubiquitous. Contactless checkout, with cards swiped by cashiers behind plexiglass barriers, are coming to many stores.
Suffice to say, the dynamic between shoppers and store employees won’t be the same.
"When you can't see somebody's big smile on their face, this is when your eyes have to become very expressive," said Holli Rogers, chief executive of Browns, which operates two luxury fashion stores in London.
Social distancing is more of a wildcard. In many places, governments will limit how many people can enter stores and require distancing of up to six feet. Every customer will walk into a store with their own ideas about the right level of precautions. Browns is training sales associates about how to broach the subject.
Elena Mirò, with 200 shops in Europe, has spent the lockdown redesigning some stores to fit the reality of post-pandemic shopping. Most locations will allow in no more than four shoppers at once, and customers will be able to book appointments to avoid having to wait to get in, said Brand Manager Martino Boselli. They will first stop by a check-in area, where they will find hand sanitiser and gloves. Then, they will head to a designated spot where they can browse the brand’s collection without worrying about bumping into employees or fellow shoppers.
After selecting a piece to try on, a sales assistant will find the right size and colour in the stockroom and bring it to the customer. Each item will be sanitised and individually wrapped every time it is tried on.
“It’s very important for people to feel they are in a safe place,” Boselli said.
The ultra-cautious approach may not work everywhere, and could even alienate customers in regions with milder outbreaks. In some US cities, protesters are demanding that local governments allow businesses to reopen.
“The virus is different for every state ... from a mental standpoint too,” said Untuckit’s Riccobono. “In New York, people are scared to go out their front doors. But we don’t want to scare people in Nebraska who are thinking ‘I just want to go back to my normal life.’ New York has to look different than Nebraska.”
The social-distancing dance is going to limit foot traffic to a fraction of pre-pandemic levels.
Jessica Richards, owner of Shen Beauty, said she regularly had 20 customers at a time in her store, and had started building out a new, larger boutique before the lockdown. Now, she’s expecting she’ll be allowed to accommodate 10 at most, in a space twice the size. Untuckit expects 20 people to visit stores daily, where a busy day pre-pandemic might have seen 300. Elena Mirò anticipates its safety measures will reduce store traffic by two-thirds.
“It’s a much nicer shopping experience when there’s not a million people around you, but as a retailer you want those people in there,” Richards said. “It drives energy ... losing that is going to be really hard.”
Vitkac hopes to turn its health precautions into a post-pandemic spin on experiential retail. The retailer has always relied on in-store attractions to get people in the door, including a skateboarding half-pipe, free childcare and a high-end restaurant, said Arkadiusz Likus, the Warsaw department store’s owner and chief executive.
When the store reopens, its restaurant will set up a food truck selling “the perfect pizza” outside the main entrance. In the parking lot, customers can pick up orders in a “beautiful blue booth” modelled after a McDonald’s drive through, Likus said.
In order to bring traffic to the store in a post-pandemic world, you need to be even more creative.
“In order to bring traffic to the store in a post-pandemic world, you need to be even more creative,” Likus said. “You need to make people smile.”
Many retailers expect to ease up on safety measures after a few months. That will likely depend on whether Covid-19 flares up again this fall.
“This is something that’s going to change, we’ll not have this approach for the rest of our lives,” Boselli said. “Hopefully in the next two to three months it will change again.”
The Conversion Factor
With fewer customers coming in the door, retailers need to get those shoppers to spend more.
Several retailers told BoF they expect a higher percentage of in-store customers to make a purchase, and for average order sizes to increase. That's partly due to pent-up demand, known in China as "revenge shopping." But it also reflects how only the most determined shoppers will venture out of their homes at first.
“If you’re willing to step in a store in this situation, it’s because you really want to buy,” Boselli said.
Other customers will need more convincing. Some retailers have been using the pandemic to build out personal shopping services. Vitkac even converted its shop floor into a “call center,” where employees could help customers browse virtually via video calls.
Browns is equipping sales associates with an app that allows them to book fitting rooms for customers and view their online wish lists, among other features. Though this technology was becoming common in stores before the pandemic, it has the added benefit of reducing face-to-face interactions for customers who want to minimise contact, Rogers said.
Stores will also need to get staffing levels right. Millions of retail workers have been laid off and will need to be rehired. Not all will be.
Stores in Asia have reopened with less staff, shorter hours and fewer shifts, said Anna Vichitcholchai, customer success manager at RetailNext, a retail data and consulting firm. Often, employees work on the same team from shift to shift, to reduce interactions with new people that could spread the virus.
Although having idle salespeople is a danger immediately after reopening, customer service could suffer if traffic bounces back and there aren’t enough employees to handle the influx of shoppers, she said. Stores should start by hiring back their most experienced salespeople, but be ready to quickly add more employees.
The customer experience has to take precedence.
“There’s a fine balance between understaffing and overstaffing,” Vichitcholchai said. “There’s an importance to [shoppers] coming back to some sort of normalcy in the shopping experience. The customer experience has to take precedence.”
Offline to Online
E-commerce is going to play a bigger role after the pandemic. Many stores are setting up to handle online orders. Elena Mirò's Boselli said online sales could nearly double to 9 percent this year, and plans to enable store associates to shop with online customers via video Whatsapp calls. Richards said she would have had an easier time during the lockdown if she'd invested more in her e-commerce operation before the pandemic. She plans to devote more to building her boutique’s online presence even after her new store opens.
During the lockdown, Browns employees interacted more often with their clients online, sharing details about new arrivals or just checking in. Customers have liked the extra engagement so much that it’s almost certain to carry over even after Browns’ two London stores reopen, Rogers said.
“It’s going to be fascinating to see that kind of pivot of that [store associate] role as it all gets going again,” she said. “They’re personal shoppers, they’re social media managers, they’re content creators.”
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