The COVID-19 pandemic has strongly affected the global economy and also has the potential to act as a catalyst for change and growth.
In addition to the unique economic crisis which has created economic recession worldwide, COVID-19 has the chance of completely shifting our current way of doing fashion business, by encouraging a more sustainable approach, innovation, efficiency and flexibility within businesses.
According to McKinsey’s State of Fashion 2021 report, there are two predicted extreme scenarios for the foreseeable future. On one hand, the:
To survive this crisis and keep growing, fashion companies must identify novel strategies and opportunities to leverage and maintain a competitive edge. Market valuations predict that companies with digital transformation strategies and a digital integration of channels will suffer less from the current economic crisis than those without. Data and analytics are expected to gain an increasingly important role, enabling companies to gain in-depth insights into consumer behavior and needs, thus helping find better ways to keep clients engaged. The digital world holds great potential for companies to unlock, to attract and tailor specifically to client demands. In order to combat the criss and keep growing successfully, brands must be aware of the predicted 2021 digital fashion trends they should focus on: Digital Sprint, Social Shopping and Implementing an omnichannel strategy, which will be explained in more detail as follows.
Fashion has been shifting towards online sales for years, a process considerably accelerated by the COVID-19 pandemic, with ecommerce’s share of fashion sales globally seeing an increase from 16 to 29%.
Digital players around the world have proven to be more resilient and flexible than fully offline brands, as reflected by the stock markets who valued online retailers 42% higher than offline ones. Thus, digital growth can be defined as the biggest opportunity for companies in 2021, with 70% of executives surveyed by the consulting firm McKinsey expecting a 20% growth in their ecommerce platforms.
As can be seen from the graph, COVID-19 is considered by top executives as the biggest challenge for the global fashion industry, whereas digitalization is defined as the biggest opportunity to leverage.
With the rise in popularity of digital, companies are not only making use of social media and mainstream platforms anymore, but also disruptive innovations such as livestream commerce, an interactive tool which is set to reach $138 billion in 2020.
This rising trend is extremely popular in South-East Asian countries such as China and consists of influencers or bloggers live streaming their in-store shopping experience to their online followers.
Other social shopping innovations include collaborations between fashion brands and video games, the live streaming platform Twitch for example, which also are a growing trend attracting younger and tech-savvy customers.
(Sources: Twitch, Fortune & Dazed)
As digital transformation strategies keep growing, fashion brands should take advantage of the opportunities that come from social and online shopping both as a new revenue stream but also for product discovery. Thus, brands should leverage digital fashion trends to create the best experience for their clients through innovative tools such as social shopping, gamification, social media engagement and many others.
Many companies are now embedding digital in their offline stores, with the goal of enhancing consumer experience. A good way of integrating human interaction with digital experience is by implementing an omnichannel strategy. As physical stores see long-term challenges arise, also due to the COVID-19 pandemic, more and more companies are cutting jobs in stores and creating new ones in digital. Doing so adds a human touch to the digital experiences and accelerates their growth in digitalization with the goal of delivering an innovative shopping experience to customers tailored to satisfy their individual needs. More and more companies are investing in hybrid flagship spaces, which allow them to leverage digital opportunities in-store. This is just an example of potential new store formats that are likely to emerge in the future to offer omnichannel services. As brands will need a 360-degree understanding of their clients’ behavior and need to fully target them and leverage the power of technology, data and analytics will cover more and more a key role.
This is how Helena Helmersson, Chief Executive of the H&M Group, describes the shift to digital: “The most clear [change] is that customers that had not yet started to do their shopping online have now started to do so. We didn’t know [if] people [would] go back to their old behaviours, but what is now really clear when we re-open the stores [is that people] really want to meet us in both channels, physical stores and online. They want to do both. In the future probably there’s even more channels than our two main ones.” The continuous changes and developments in our society will ultimately make it essential for brands to offer a digital-physical hybrid presence.