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LONDON, United Kingdom — Beyond its tragic human cost, the coronavirus has disrupted the fashion industry at an unprecedented scale and affected the lives and habits of fashion executives and consumers in cities from Tehran to New York. How can companies navigate this increasingly volatile retail landscape?
A keen grasp on consumer behaviour is more important than ever. At present, many consumers are self-isolating, which spells turmoil for the global economy. But in this week’s BoF Podcast, retail futurist Doug Stephens noted a phenomenon observed following 9/11, where a “brush with mortality” manifested in a consumption spike after things blew over. While companies should be cautious, optimism and adaptiveness are necessary for success down the road.
The majority of firms will be slashing budgets, cutting payrolls and closing so-called non-essential stores, but therein lies an opportunity. “Necessity really and truly is the mother of reinvention,” he said.
Stephens urges executives to adopt a different perspective. “Use this time to reinvent how you do what you do, bring consumers new alternatives, new value, and in the process even reinvent your own brand,” he told BoF Founder and Editor-in-Chief Imran Amed. “Don’t let innovation stop, because this could be the window of opportunity.”
While the current situation may bode well for digitally adept players in the grocery and pharmacy space like Amazon, it could also be devastating for many as the global economy braces for recession. Alongside firms in the supply chain, hospitality and luxury sectors, Stephens reckons that a financial crisis will be a death knell for dated fashion retail models.
“This could be the final nail in the coffin for a lot of department store chains for sure,” he said, pointing in particular to those with challenges businesses models. “Generally, the department store channel never really figured itself out in the ten years since the financial crisis...they never reinvented their value for consumers.”
Meanwhile, the pandemic could open the door for luxury players in need of a push to take their businesses to the next level. Stephens listed Chanel (which has yet to fully embrace e-commerce) and Amazon (which has long aimed to tap into the luxury space) as a hypothetical pairing.
“What this does is that it unfreezes a lot of those [brands’] postures,” said Stephens. “You don’t just snap your fingers and become an online player...In some cases you need a bridge to get there, and a bridge could be an Alibaba, a JD.com, or an Amazon, god forbid.”
And if 2008’s global financial crisis was any indication, understated luxury could make a comeback as consumers veer away from maximalist aesthetics. “The condition of the average consumer has not changed significantly since the last financial crisis,” Stephens added. “I think that the pain endured [in the event of a global recession] could be more significant and even more widespread.” Heightened social and moral scrutiny of the one percent could also drive a flight to quiet luxury.
“Will the rich be more inclined to keep it low key? Yeah, probably.”
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