An interesting aspect of this topic. The data is from the US but this will probably apply in differing ways elsewhere too.
Speaking for myself, I will probably buy more t-shirts once this eases (that is, more home wear). I haven't worn a shirt in over a month. Udhay https://www.fastcompany.com/90492468/spending-on-clothes-plummets-50-heres-what-it-means-for-fashions-future Spending on clothes plummets 50%. Here’s what it means for fashion’s future By Elizabeth Segran4 minute Read This week, the Census Bureau released consumer spending data for the month of March. Anyone could have guessed that lockdown orders around the country would lead to a drop in retail sales, but the extent of the decline was staggering. Sales plummeted by 8.7%, the largest-ever decrease on record, nearly triple the previous worst month on record in 2008. And clothing and accessory brands took the biggest hit, dropping by an astronomical 50.5%. This raises big questions about the future of fashion. As brands scramble to reorganize their businesses to respond to the crisis, some are not likely to make it, which could completely transform the landscape of the industry in the next few months and years. Why is this happening? Consumers are actually spending more on essential goods: Grocery stores saw a 26.9% increase in spending and health stores saw a 4.3% increase. This is partly because these are the only brick-and-mortar stores that are allowed to remain open right now, but it is also because consumers are worried about spending money unnecessarily with a significant recession looming on the horizon. Across the board, sectors that rely on discretionary spending have seen declines. “There is a lot of uncertainty and anxiety about the future,” says Andrew Lipsman, principal analyst at the research firm eMarketer. “People are shifting their spending to focus on the things they really need and cutting their budgets on less essential goods.” But the coronavirus lockdown has changed our lifestyles in ways that make buying new clothes particularly irrelevant. Since people are finding ways to fill their time at home, hobby shops and bookstores have not been as badly hit, with a 23.3% decline, and home furnishings and furniture stores have seen only a 26.8% decline, perhaps because some people are spending money on making their homes more livable. Lipsman says that categories of apparel that are designed to be worn in public settings, like workwear or formal wear, have been hit harder than brands that focus on clothes we wear at home, like loungewear. And accessories brands that focus on travel have also seen revenues tank. Away, for instance, reported sales declines of 90%. “That’s just a really unfortunate consequence of the travel restrictions we’re facing,” he says. Also suffering are brands that have large fleets of brick-and-mortar stores, according to Jordan Elkind, VP of product marketing at Amperity, a firm that analyzes brands’ consumer data. “Digitally native brands, which have always relied on the internet to engage customers, are weathering the storm better than brands that still relied heavily on customers coming into stores,” he says, based on the recent data his company has collected about a wide range of brands. More than 250,000 stores have temporarily shuttered since March. Many apparel brands are currently offering big promotions and discounts to generate revenue and clear their inventory. Elkind assumed that the people most likely to buy clothes during these sales would be millennial professionals, but his data tells another story. He’s found that it’s customers over 60 that have been most likely to spend on fashion items. “One hypothesis brands have is that these young professionals also have young children, so they don’t have a lot of time to spend online shopping right now,” he says. “But this is also revealing that older consumers are more comfortable shopping online than previously thought.” The future of fashion So what can we expect going forward? In the short term, analysts believe that consumer spending on fashion is going to decline even further, if lockdown orders continue into May (or longer) and unemployment figures keep rising. Brands that are able to sell online will lose less revenue than their counterparts that operate largely in brick-and-mortar stores, but the bleeding is not likely to stop in the next few months. And even being digitally native is no guarantee of survival. Many direct-to-consumer brands are suffering too. “I can tell you for sure that the numbers for April are likely to be even worse,” says Lipsman. “People are going to put their stimulus checks toward essential goods, like groceries and credit card payments.” They won’t be buying new clothes. In the longer term, this extended period of disruption could completely change the fashion landscape. Coresight Research, which collects data about the retail sector, expects 15,000 stores to close permanently as a result of this crisis, which could force some brands into bankruptcy. “We don’t expect things to be normal for at least a year, perhaps longer,” Elkind says. “Some brands will just not be able to make it through this period of extended decline in sales.” Both Lipsman and Elkind believe that this crisis will accelerate a transformation that was already underway in the world of brick-and-mortar retail. For years, there has been talk of a “retail apocalypse” as consumers eschew stores in favor of shopping online. That led many brands to move into experiential retail, creating in-store events and activities to lure patrons, while doubling down on digital experiences. “Many apparel companies were already in the process of rethinking their retail strategy or actively reworking it,” says Elkind. “This is going to force them to transition even more quickly to become more digital. And those that cannot make the leap will just not survive.” Whether or not a brand is able to survive depends on some idiosyncratic factors. This includes what particular kind of product it makes. (Suitcase brand Away has been harder hit than sneaker brand Allbirds, for instance.) It also depends on whether the brand has cash reserves on hand to keep the lights on in the midst of a sales decline. But ultimately, industry analysts believe that the DTC approach—that is, having a direct relationship with your customer, largely nurtured on the internet—is likely to endure once the crisis is over. The DTC brands that do survive have the potential to become much more successful in the aftermath of the coronavirus crisis because many of their competitors will have gone under. About the author Elizabeth Segran, Ph.D., is a staff writer at Fast Company. She lives in Cambridge, Massachusetts
