The economic slump brought upon by the pandemic and shelter-at-home policies has forced fashion retailers to escape the undynamic system of brick-and-mortar.
As non-essential retailers struggle to stay operational amid pandemic, the quote “when one door closes, another opens” seems to be the lesson fashion retailers are trying to grasp these days.
Retailers shift digital despite store reopening
A new report from Shopify showed how the eCommerce landscape changed as more brick-and-mortar retailers turn online. According to the platform, the number of newly built stores has exponentially increased by 62% between mid-March through April.
At the same time, the Europe-based online fashion retailer Zalando has also registered 50 new brands—including American Eagle Outfitters and Vaude—to its marketplace beginning mid-April.
The trend, experts weighed in, seems to be the future of retail.
The biggest fashion retailer H&M, for instance, has seen a massive increase in online sales from March through May, while its local currency sales fell by 57%.
The company also started reopening some of its stores in Germany where stay-at-home policies were gradually lifted. However, sales were still down by 46%.
Zalando recorded 39% of new customers as well. Analyst Sherri Malek of RBC describes the gain as “evidence of the accelerated consumer shift from offline to online.”
Shopify CEO Tobi Lutke also shared how, through online sales, brick-and-mortar stores were able to recover almost 94% of its in-store transactions lost due to the pandemic between mid-March and late April, per Financial Times.
On the one hand, Bain predicts that the crisis will become the catalyst for retail reinvention.
As the pandemic speeds up the shift to digital selling, retailers should “unlock the full potential of omnichannel retailing” and digital marketing.
Global pandemic speed up brands shift to digital
The shift from physical to digital stores has been a long-debated topic in the retail industry.
Surprisingly, the pandemic’s aftermath pushed consumers to change their shopping habits from the traditional store visits to online buying.
A recent study conducted by Kantar shows massive growth in online purchases. Based on the data, the number of individuals who take 50% of their total purchase has skyrocketed by 25% to 80%.
It also suggests that even after the pandemic is over, six out of 10 shoppers plan to continue shopping online as much as they do now.
The study also shows sales trends for non-essential products will rally by the end of the year, with home electronics and clothing to receive the largest bounce back.
In addition, Joakim Gavelin of Detail Online also reiterated that major categories would recover to even higher levels once the pandemic is over.
“2020 is not lost. Right now, there is an enormous potential for brand owners to increase online sales in 2020. […] To be a winner in this, you need to have good control of your products online as you would at a physical retailer.”
Given the facts, it appears that an eCommerce-focused system will likely be the “new normal” for the retail retail industry.