Impact of the COVID-19 pandemic on the fashion industry

Last updated

Face masks integrated into a 2021 fashion show outfit. Ruwanthi's collection at TFDA 2021.jpg
Face masks integrated into a 2021 fashion show outfit.

The COVID-19 pandemic affects the global fashion industry as governments close down manufacturing plants, and through store closures, and event cancellations [1] to attempt to slow the spread of the virus. The COVID-19 pandemic has had a major impact on fashion brands worldwide. [2] At the same time, the fashion industry faces challenges in consumer demand. [3] New opportunities are also presenting themselves as fashion brands shift to making fashionable COVID-19 face masks. [4] [5] Domenico de Sole, chairman of Tom Ford International, remarked that "I have seen a lot of difficult situations in my long career and this has been the most devastating event, not just for fashion and luxury, but all industries." [6]

Contents

Manufacturing

In the first months following the start of the global lock-down, the fashion sector was shaken by the sudden stop of all retail stores sales worldwide. The supply chain froze for a few weeks in some countries, which materialized by a lack of fabric availability and order cancellations. Many fashion designers saw the pandemic as a catalyst for change, a way to break away from the industry's constraints. Most fashion companies focused on innovation with online sales to maintain revenue afloat. [7] According to Bloomberg , Bangladesh was severely hit by the sudden halt of production. In many countries, financial programs were launched to support suddenly jobless workers of the fashion industry. [8] "The global trade union which works to give workers around the world a voice, says that millions of garment makers have already lost their jobs as a result of the virus and have no access to social or financial safety nets to help them weather this storm." [8] This has affected many fashion brands directly, as they face challenges by no longer having their manufacturers to rely on. Brands typically pay their suppliers weeks or even months after delivery, rather than upon order. [9] Suppliers, though, need to pay upfront the cost of materials and fibers used to make the products they have been asked to produced from brands. The issue is that with the unfolding situation of the pandemic, fashion brands and retailers are cancelling orders, due to low demands of clothing, and cancelling payments for orders that have already been placed with their manufacturers. Hence, fashion brands take no responsibility for the impact this has on the people working under their supply chains; their manufacturers who have already worked on crafting their products at their own cost and no longer receive anything in return. Given the situation, factories are left with no other choice than to keep hold of unwanted goods already made or destroy them, and laying off workers to afford the crisis or shutting down their factories indefinitely. [8] With this scenario happening all over the globe, fashion brands are highly affected when it comes to the manufacturing of their goods.

Sales

Shuttered Hugo Boss store in Brisbane, Australia (March 2020) Hugo Boss store during the COVID-19 pandemic in Brisbane, Australia 03.jpg
Shuttered Hugo Boss store in Brisbane, Australia (March 2020)

In early April 2020, Forrester published a report predicting a $2.1 trillion loss in sales for the global retail industry in 2020. [10]

With store closures, some fashion companies had their spring sales fell by 60%. A mid-April report by the Census Bureau estimated the decline of retail sales to -8,7% in March 2020, with clothing sales falling hard with a 50.5% sales drop. The New York Times found the data comparable to those of the months following the 2008 financial crisis, even though stores remained opened that time. Sales of casualwear and sleepwear, to adapt to the lockdown lifestyle, boomed. Department stores, which were already losing the competition to online sales, all announced a major crisis to come, being unable to compensate their losses with online sales. [11] In April 2020, clothing sales fell 79% in the USA. [12] The industry recorded a 9.6% global decline in 2020. [10]

The demand for tracksuits, pajamas, hoodies, sportswear, and other leisurewear highly rose. Baggy jeans, for example, are replacing tight ones. [13] Sweatpants sales grew 80% in 2020 in the USA. [12] The fashion needs and interests of people are highly shifting, as they prefer comfortable clothes over high design. Consumer changes in tastes in accordance to apparel and styles have led businesses to pivot towards a greater focus in loungewear and activewear, ideal for a stay at home situation. Moreover, with the shift in customer attention to safety, health and wellness, retailers are facing the post-pandemic challenge of capturing new customer needs with a greater focus in hygiene and safety to retain their clientele. [14]

Marketing

The economic crisis hit the larger department stores first: J.Crew, Neiman Marcus, Brooks Brothers and JCPenney all filed for bankruptcy within the months following the coronavirus outbreak. On the other end, the outbreak was also the start of booming online sales for some smaller, low-overhead clothing companies that foster a close relationship with their customers. [12]

As retail stores shut their doors and stay-at-home orders kept people inside, there was a dramatic shift towards digital commerce that is likely to continue post-pandemic. Consumers had to increase their use of services like social commerce and curbside pickup and retailers had to offer digital solutions in order to survive. [15] Sales from physical brick-and-mortar stores and department stores are down and expected to continue decreasing while direct-to-consumer online retailers are on the rise. [16] Some dressmakers and seamstresses have shifted to making masks, including specialized masks for Sikhs and wearers of turbans, hijabs, and hearing aids, as well as those with full beards. [17] According to Shashin Shah of TotalRetail, the industry's new challenge is to deliver "contactless yet engaging customer experiences." [10]

The lockdown led to a surge of new TikTok users, with 2 million app downloads during the week of March 16, 2020 (1.7 million the prior week), but its gross revenue grew by 34% that same week. [18] According to Isabel Slone, TikTok rewards people for "retreating into their own niches and discovering new interests". [19]

According to the Harvard Business Review (2021), the covid crisis led to a great decline in traditional advertising spending, and a historic ROI from social media, leading fashion companies and brands to boost their online and digital presence. About 61% of CMOs indicated that they have "shifted resources to building customer-facing digital interfaces" and 56.2% are planning to "transform their go-to-market business models to focus on digital opportunities". [20]

Sustainability

The fashion industry is well ranked as one of the world's largest polluting industries. Its impact on this planet has only been getting worse, as the industry has grown throughout the years. [21] With the spread of the COVID-19 pandemic, the industry is facing a stage of reassessment and is searching for new alternatives that are mindful of our people and planet. [22] Just recently, the State of Fashion Report of 2019 claimed the industry was undergoing a "year of awakening" as consumers demanded greater social responsibility from fashion retailers big and small. Nonetheless, with the rise of the pandemic at the start of the 2020 year, the fashion industry's sustainability efforts began to slow down. Sustainability was becoming way less of a priority for fashion retail, as fashion retail businesses were undergoing a state of emergency and fighting for survival. [22] Now though, as the crisis aligns consumer, environmental, and ethical interests, the spotlight on sustainability has been brought back to light. Numerous reports and studies have shown the impact the COVID-19 pandemic has had on focusing our minds towards helping to create a better, healthier planet. Consumer fashion purchasing behavior has evolved and people are leaning towards more environmentally-friendly, sustainable, and/or ethical purchases. [23] The resale apparel market, which includes online resell as well as thrift and donation stores, is set to skyrocket in a post-COVID-19 world. [24] Many collaborations and projects have arisen within brands, to support recycling, resale, sustainable collections, or material innovations. [25] In addition, many brands have published their accelerated sustainability goals in terms of plastic, carbon, and energy reduction. [25] With the impact the pandemic has had on consumer purchasing behavior, environmental awareness, and sustainable consumption, several efforts are being carried out globally to build a sustainable fashion future.

LVMH launched the deadstock resale platform Nona Source to boost the industry's circularity. [26]

Secondhand fashion

The pandemic propelled an already existing surge for secondhand fashion. [27] Websites such as The RealReal, ThredUp, or Poshmark, saw a surge of activity during the pandemic. [27] In March 2021, the luxury group Kering acquired 5% of the secondhand resale platform Vestiaire Collective. [28] In early 2024, the Gucci Vault (marketplace of exclusive collaborations and It products) was replaced by Gucci Vintage (reconditioned secondhand clothes). [29]

Events

Designers have adapted with producing and showcasing their fashion products by streaming presentations online without a live audience present. [30] The British Fashion Council made an announcement in April 2020 that it would develop a digital "cultural fashion week platform" that designers could use in any way that they thought would work for them rather than facilitating the typical format and setting of a fashion show. Shanghai and Moscow fashion weeks were presented digitally in late March and April 2020. Ermenegildo Zegna coined the word phygital to describe "physical space and digital technologies" as its new way of showcasing fashion. [31]

As art galleries and museums were closed, First American Art Magazine organized a virtual art exhibition and asked the Native art community to submit masks. More than seventy artists handed in 125 masks, from functional masks to decorated ones. [32]

High fashion

Trikini Mannequin with bathing suit and matching face mask Roncesvalles.jog.jpg
Trikini

The COVID-19 pandemic caused change in the fashion industry. The necessity to purchase clothing on a frequent basis no longer exists, and numerous brands and historic department stores have closed for good. [12] Face masks are a "piece of clothing ... that began as purely protective transforming into a fashion statement in no time at all." [33] The trikini in Italy, for example, consists of two piece beachwear and a matching mask. [34] [35] [36] [37] More broadly they have appeared on the catwalk as a part of the haute couture's industry turn towards a utilitarian flair, and furthermore with the global rollout of effective vaccines thought is now being given to "the post-COVID look". [38]

See also

Related Research Articles

<span class="mw-page-title-main">H&M</span> Swedish multinational clothing retail company

H & M Hennes & Mauritz AB, also known as H&M Group, is a multinational clothing company based in Sweden that focuses on fast-fashion clothing. As of 23 June 2022, H&M Group operated in 75 geographical markets with 4,801 stores under the various company brands, with 107,375 full-time equivalent positions.

<span class="mw-page-title-main">Inditex</span> Spanish multinational clothing company

Industria de Diseño Textil, S.A. is a Spanish multinational clothing company headquartered in Arteixo, Galicia, Spain. Inditex, the biggest fast fashion group in the world, operates over 7,200 stores in 93 markets worldwide. The company's flagship brand is Zara, but it also owns a number of other brands such as Zara Home, Bershka, Massimo Dutti, Oysho, Pull&Bear, Stradivarius, Uterqüe and Lefties. The majority of its stores are corporate-owned, while franchises are mainly conceded in countries where corporate properties cannot be foreign-owned.

River Island is a London-based, multi-channel fashion brand, founded in 1948 by Bernard Lewis. The retailer has a presence in over 125 of worldwide markets, in stores and online.

<span class="mw-page-title-main">Primark</span> Irish multinational fast-fashion company

Primark Stores Limited is an Irish multinational fast fashion retailer with headquarters in Dublin, Ireland, with outlets across Europe and in the United States. The original Penneys brand is not used outside of Ireland because it is owned elsewhere by American retailer J. C. Penney.

<span class="mw-page-title-main">Vintage clothing</span> Garments originating from a previous era

Vintage clothing is a generic term for garments originating from a previous era, as recent as the 1990s. The term can also be applied in reference to second-hand retail outlets, e.g. in vintage clothing store. While the concept originated during World War I as a response to textile shortages, vintage dressing encompasses choosing accessories, mixing vintage garments with new, as well as creating an ensemble of various styles and periods. Vintage clothes typically sell at low prices for high-end name brands.

<span class="mw-page-title-main">Fast fashion</span> Quick retail copying of catwalk trends

Fast fashion is the business model of replicating recent catwalk trends and high-fashion designs, mass-producing them at a low cost, and bringing them to retail quickly while demand is at its highest. The term fast fashion is also used generically to describe the products of this business model. Retailers who employ the fast fashion strategy include Primark, H&M, Shein, and Zara, all of which have become large multinationals by driving high turnover of inexpensive seasonal and trendy clothing that appeals to fashion-conscious consumers.

The National Retail Federation (NRF) is the world's largest retail trade association. Its members include department stores, catalog, Internet, and independent retailers, restaurants, grocery stores, multi-level marketing companies and vendors.

An online grocer is a supermarket or grocery store that allows ordering via websites or mobile apps. The order can either be collected by the customer or delivered to the customer by drivers engaged by the grocer, a food delivery service, or by delivery drones and robots.

Clothing industry or garment industry summarizes the types of trade and industry along the production and value chain of clothing and garments, starting with the textile industry, embellishment using embroidery, via the fashion industry to apparel retailers up to trade with second-hand clothes and textile recycling. The producing sectors build upon a wealth of clothing technology some of which, like the loom, the cotton gin, and the sewing machine heralded industrialization not only of the previous textile manufacturing practices. Clothing industries are also known as allied industries, fashion industries, garment industries, or soft goods industries.

<span class="mw-page-title-main">Digital fashion</span>

Digital Fashion is the visual representation of clothing built using computer technologies and 3D software. This industry is on the rise due to ethical awareness and uses of digital fashion technology such as artificial intelligence to create products with complex social and technical software.

<span class="mw-page-title-main">Joules (clothing)</span> British fashion retailer

Joules is a British clothing company which sells clothing and homeware products inspired by British country lifestyles. Its founder Tom Joule described its business model in 2011 as creating clothing with "colour and fun and entertainment".

<span class="mw-page-title-main">Retail apocalypse</span> Period in the 2010s where many American brick and mortar retail stores have closed or struggled

Retail apocalypse refers to the closing of numerous brick-and-mortar retail stores, especially those of large chains, beginning around 2010 and accelerating due to the mandatory closures during the COVID-19 pandemic.

Boohoo Group plc is a British online fast-fashion retailer, aimed at 16–30 year olds. The business was founded in 2006, and had sales in 2019 of £856.9 million.

<span class="mw-page-title-main">Impact of the COVID-19 pandemic on the food industry</span> Impact of COVID-19

The COVID-19 pandemic affects the global food industry as governments close down restaurants and bars to slow the spread of the virus. Across the world, restaurants' daily traffic dropped precipitously compared to the same period in 2019. Closures of restaurants caused a ripple effect among related industries such as food production, liquor, wine, and beer production, food and beverage shipping, fishing, and farming.

<span class="mw-page-title-main">Economic impact of the COVID-19 pandemic</span>

The COVID-19 pandemic has had far-reaching economic consequences including the COVID-19 recession, the second largest global recession in recent history, decreased business in the services sector during the COVID-19 lockdowns, the 2020 stock market crash, which included the largest single-week stock market decline since the financial crisis of 2007–2008 and the impact of COVID-19 on financial markets, the 2021–2023 global supply chain crisis, the 2021–2023 inflation surge, shortages related to the COVID-19 pandemic including the 2020–present global chip shortage, panic buying, and price gouging. It led to governments providing an unprecedented amount of stimulus. The pandemic was also a factor in the 2021–2022 global energy crisis and 2022–2023 food crises.

<span class="mw-page-title-main">Economic impact of the COVID-19 pandemic in the United States</span> Overview of the impact of the COVID-19 pandemic on U.S. economy

The economic impact of the COVID-19 pandemic in the United States has been widely disruptive, adversely affecting travel, financial markets, employment, shipping, and other industries. The impacts can be attributed not just to government intervention to contain the virus, but also to consumer and business behavior to reduce exposure to and spread of the virus.

<span class="mw-page-title-main">Impact of the COVID-19 pandemic on retail</span> Aspect of viral outbreak

The COVID-19 pandemic has taken a sharp economic toll on the retail industry worldwide as many retailers and shopping centers were forced to shut down for months due to mandated stay-at-home orders. As a result of these closures, online retailers received a major boost in sales as customers looked for alternative ways to shop and the effects of the retail apocalypse were exacerbated. A number of notable retailers filed for bankruptcy including Ascena Retail Group, Debenhams, Arcadia Group, Brooks Brothers, GNC, J. C. Penney, Lord & Taylor and Neiman Marcus.

Retail Apparel Group is an Australian and New Zealand clothing retail company, wholly owned by the Foschini Group. The company operates stores under the Tarocash, Connor, yd., Johnny Bigg, Rockwear and AXL+Co brands.

<span class="mw-page-title-main">Strandbags</span> Australian and New Zealand retailer

Strandbags is an Australian and New Zealand retailer of handbags, wallets, luggage, backpacks and other personal accessories.

Revenge buying refers to a sudden surge in the purchase of consumer goods after people are denied the opportunity to shop for extended periods of time. The revenge buying mechanism is thought to have evolved as a reaction to the frustration and psychological discomfort caused by restrictions in the freedom of movement and commerce. Unlike panic buying, revenge buying appears to involve the purchase of superfluous goods, such as bags and clothing, as well as decorative objects such as gems and jewellery. The industries revolving around the production of these objects, a major source of revenue for the retail sector, saw huge losses during the lockdowns induced by the COVID-19 pandemic.

References

  1. Ilchi, Layla (17 March 2020). "How the Coronavirus Is Impacting the Fashion, Beauty and Retail Industries". Women's Wear Daily. Retrieved 7 May 2020.
  2. Silver, Katie (7 May 2020). "Small fashion brands in Asia hit by coronavirus". BBC News. Retrieved 7 May 2020.
  3. Law, Tara (3 March 2020). "How Coronavirus' Effect on the Fashion Industry Reveals Flaws in the Global Economy". Time. Retrieved 7 May 2020.
  4. Philipkoski, Kristen (12 April 2020). "30+ Fashion Brands Pivoting To Make Stylish Coronavirus Masks". Forbes. Retrieved 8 May 2020.
  5. Friedman, Vanessa (22 April 2020). "Should Masks Be a Fashion Statement?". The New York Times. Retrieved 8 May 2020.
  6. "What Will It Really Take To Fix Fashion?". British Vogue. 20 September 2020. Retrieved 20 August 2021.
  7. Roberts-Islam, Brooke (13 April 2020). "Designer And Supply Chain Digital Revolution: How COVID-19 Is Changing The Fashion Industry". Forbes. Retrieved 7 May 2020.
  8. 1 2 3 "The impact of COVID-19 on the people who make our clothes". Fashion Revolution. 27 March 2020. Retrieved 20 August 2021.
  9. Glover, Simon (30 March 2020). "Fashion lovers urged to support garment workers". Ecotextile News. Retrieved 20 August 2021.
  10. 1 2 3 Shah, Shashin (18 March 2021). "COVID-19's Effect on Consumer Purchase Behavior". Total Retail. Archived from the original on 19 March 2021. Retrieved 20 August 2021.
  11. "How coronavirus could alter the way we shop for clothes from now on". TODAY.com. 30 April 2020. Retrieved 8 May 2020.
  12. 1 2 3 4 Gonot, Stephanie (6 August 2020). "Sweatpants Forever". The New York Times.
  13. Tett, Gillian (28 April 2021). "For post-Covid style, comfort is in and status anxiety is out" . Financial Times.
  14. McKinsey. "The State of Fashion 2020" (PDF). McKinsey & Company.
  15. "COVID-19: Impact on retail consumer behavior | Accenture". www.accenture.com. Retrieved 11 October 2020.
  16. Coffman, Courtney (19 June 2018). "Shops Aren't for Shopping Anymore". The Atlantic. Retrieved 11 October 2020.
  17. "The dressmaker helping Australia with modified masks". BBC News.
  18. Stassen, Murray (24 March 2020). "Music Business World". Music Business Worldwide. Retrieved 9 February 2024.
  19. Slone, Isabel (10 June 2021). "Opinion | There Are No Fashion Rules Anymore". The New York Times. ISSN   0362-4331 . Retrieved 13 August 2021.
  20. "CMOs: Adapt Your Social Media Strategy for a Post-Pandemic World". Harvard Business Review. 19 January 2021. ISSN   0017-8012 . Retrieved 4 August 2021.
  21. "Environmental Impacts of the Fashion Industry". SustainYourStyle. Retrieved 13 August 2021.
  22. 1 2 Fish, Isabella (8 December 2020). "How Covid turned the spotlight on sustainability". Drapers. Retrieved 13 August 2021.
  23. "Has coronavirus made us more ethical consumers?". BBC News. 14 January 2021. Retrieved 13 August 2021.
  24. "Study: Resale apparel market set to skyrocket in post-COVID-19 world". Chain Store Age. 23 June 2020. Retrieved 13 August 2021.
  25. 1 2 Preuss, Simone (13 August 2021). "38 Sustainability efforts of the fashion industry in July 2021". FashionUnited. Retrieved 13 August 2021.
  26. "How The Likes Of Louis Vuitton, Dior And Fendi Are Selling On Their Leftover Fabrics". British Vogue. 20 May 2022. Retrieved 16 February 2024.
  27. 1 2 Caminiti, Eric Rosenbaum,Susan (19 September 2020). "Coronavirus and luxury retail: Shopping for used Hermes, Cartier in Covid era". CNBC. Retrieved 20 August 2021.{{cite web}}: CS1 maint: multiple names: authors list (link)
  28. "Gucci owner Kering invests in resale platform Vestiaire Collective". Reuters. 1 March 2021. Retrieved 16 February 2024.
  29. "The End of Gucci Vault Is the Start of Something Beautiful (EXCLUSIVE)". Highsnobiety. 4 January 2024. Retrieved 16 February 2024.
  30. "2020 Fashion week innovations". fashionunited.com. 1 May 2020. Retrieved 7 May 2020.
  31. Friedman, Vanessa (2 May 2020). "Is This the Future of the Fashion Show?". The New York Times. Retrieved 7 May 2020.
  32. "Masked Heroes: Facial Coverings by Native Artists". First American Art Magazine. 15 June 2020.
  33. Givhan, Robin (4 May 2020). "Masks are here to stay. And they're quickly becoming a way to express ourselves". Washington Post.
  34. CONCOLINO, NIVES (26 April 2020). "Trikini, il costume da bagno con la mascherina". il Resto del Carlino (in Italian). Retrieved 28 April 2020.
  35. "Coronavirus, sarà l'estate del trikini: il costume abbinato alla mascherina. FOTO | Sky TG24". tg24.sky.it. 26 April 2020.
  36. Deabler, Alexandra (12 May 2020). "Italian designer launches 'trikini' beachwear design, complete with matching bikini and mask set". Fox News. Retrieved 13 May 2020.
  37. "Coronavirus: New 'trikini' trend boasts bikini & matching face masks". Capital. Retrieved 13 May 2020.
  38. McIntosh, Steven (30 December 2020). "Fashion lookahead: Eight major 2021 looks from tie-dye to pastels". BBC News.