What awaits the Fashion Sector After Coronary Virus?
What awaits the Fashion Sector After Coronary Virus?
Creation 02 June 2020 Update 15; 54
After Corona virus, the behavior of brands and consumers is changing in the fashion industry. Check out the detailed analysis of the fashion world.
The worst crisis seen in the fashion sector since 2008 is being experienced. So much so that it is estimated that 80% of fashion brands in Europe and America will be in financial trouble when this situation is over. All the players in the industry are trying to make predictions about the future while trying to make sense of the changes. First of all, it is necessary to consider the economic consequences of the crisis that is going on. According to McKinsey’s report, 56% of consumers say that they have reduced their spending, while 48% state that they do not buy the products they would prefer to buy under normal conditions due to economic uncertainties. As a result, the fashion sector, which includes clothing, shoes, bags and accessories, is expected to drop by 27-30% in 2020. The good news is that for 2021, his expectation is to grow by 2-4%.
You may also be interested in this topic
What awaits the luxury sector after coronavirus?
In addition, psychological factors are of great importance in determining the behavior of consumers after the crisis. Luxury consumption, which is not essential by nature, is basically a psychological consumption. And it is directly linked to people feeling safe. Trust in question covers many areas from economy to health. The global slowdown in the economy was already beginning to shake the trust of consumers. This epidemic deepened cracks and brought insecurity to another dimension. It is clear that such distrust will not go overnight, even if everything is under control. It is also necessary to accept that; The fashion sector has also been experiencing a crisis in itself in recent years. As John Idol, CEO of Capri, which includes brands such as Michael Kors and Versace, the change has already begun. The crisis experienced accelerated this change. While the weaknesses of the sector have emerged, brands have also realized how important the “change or die” rule is. The change in question goes far beyond being on social media or deciding to use sustainable fabric, and it involves extensive changes.
SALES AND MARKETING
Discount Culture Benefits Fashion or Harm?
As in every sector, one of the biggest problems faced by the fashion sector is overstock products. The value of every unsold item in this excess stock, which is mostly composed of seasonal products, decreases day by day. In addition, the warehouses where these products are put into the “last season” when the crisis is over, create another financial problem for brands.
Are Department Stores Confusing History?
The problems faced by department stores are long before the current crisis. Although the last time waiting for these stores that have a conservative attitude and have difficulty reading the spirit of the time has been clear, the crisis accelerates the arrival of this end. The declaration of bankruptcy in April 2020 after Neiman Marcus, which was established in 1907 after dealing with debts for many years, is a reflection of this situation.
The Future of Luxury Depends on Digitalization
They say, “Innovations arise from necessity”… By reading this crisis and its needs correctly; Companies that make the right innovations in many fields from production to marketing will emerge stronger from this period as seen in previous crises. For this, it is necessary to produce new perspectives in order to understand this change and turn it into a chance in the long run. Of course, the digital side is one of the areas where this change can be turned into luck.
What Will Be the Future of Fashion Week?
Armani, who held the Fall / Winter 2020 fashion show held in Milan Fashion Week in February 2020 due to the epidemic threat, gave the first clue about the future of fashion weeks. After that point, while most of the fashion weeks planned to be organized within the year are canceled, some of them were decided to be organized digitally. Shanghai Fashion Week was the first example of this practice.
Are the Winners of the Corona Period Luxury Luxury Brands?
One of the fastest growing markets of recent years has become second-hand. According to a report published by BCG in 2019, it was expected to reach $ 36 billion in 2021, forming 9% of the personal luxury products market. With the crisis, question marks began to appear about the future of the second-hand market, which is growing even faster than luxury itself. The figures are promising.
Is Revenge Exchange Lasting in Luxury?
With the beginning of life returning to normal in China, everyone’s eyes are turned there with the expectation of “revenge exchange”. So, what is this exchange of revenge? Interestingly, this term was first used for China in the 1980s. With the changes made within the scope of the Chinese Economic Reform, the country’s doors were opened to foreign investors and foreign brands entered China for the first time.
Luxury Without Logo Comes Back
Although it is thought that consumers will return to normal after the epidemic, it is obvious that this normal definition will be different from the old one. As in the 2008 economic crisis, after this crisis, together with the luxury shame, the concept that we call “silent luxury”, namely the brands and designs that do not shout logo, will come to the fore. Another of the main reasons why consumers will prefer products that have “investment” quality will be the increasing importance given to conscious and sustainable consumption.
Will E-Commerce Save Luxury Fashion?
Undoubtedly, the rise of e-commerce will be one of the issues that will mark the coming period. Aside from the question of whether luxury brands are ready for this, the biggest problem on the subject will be the high unemployment rates among the young generation who are accustomed to e-commerce. One of the biggest challenges for marketers will be accustoming the older generation to e-commerce, with the power to continue making luxury consumption.
Sustainable Fashion Now
Sustainability, which has become very popular in recent years with the increasing weight of Y and Z generations as consumers, will become a priority in many aspects. Change and transparency will be required in many areas, from supply chain to production techniques, from employee rights to waste management. It is clearer every day that the current system is not working and negatively affects the world.
Big Risk Awaiting Luxury: Problems in the Supply Chain
The crisis has brought many problems for both brands and suppliers. Luxury giants such as Gucci and Salvatore Ferragamo, who canceled their orders one by one after their sales were interrupted all over the world, was a big blow for these suppliers. In many countries, especially in Italy, where more than 40% of luxury production takes place, producers face the threat of not being able to open their doors again.