Clothes retailers are fashioning a new way to sell
Loss of ‘golden quarter’ threatens sector but fresh strategies are emerging, writes
Retail’s “golden quarter” – the three-month run-up to Christmas and new year – is traditionally a time when fashion stores cash in. Shoppers embrace the new season’s lines, snapping up autumn and winter staples, and are often prepared to splash out on a new outfit for parties and events during the festive season.
But this year, parties have been cancelled, meetings postponed and weddings called off. Instead, the UK is facing a winter where people continue to spend more time than ever at home. How has this altered demand for clothes?
Some patterns of spending have remained the same, says Kat Farmer, fashion stylist, writer and blogger.
“Within a week, everyone ditches their sandals and summer dresses and it’s about wool and cashmere and coats and boots,” she says. “That doesn’t seem to have changed this year.”
But, perhaps unsurprisingly, retailers including Marks & Spencer and Asos have reported a steep drop in demand for formal wear and increased sales of casual clothing and leisure wear in recent months.
TM Lewin announced plans to shut all 66 UK stores in June, while Moss Bros is in talks with landlords to close some of its shops.
Both cited the cancellation of major events such as Royal Ascot, postponed weddings and working from home as reasons for their decline.
In a world where collections are finalised months before they hit the shelves, retailers are scrambling to bring out lines that remain relevant to consumers. “A lot of us aren’t sure whether we’ll even have a job and if we do, whether we’ll be going into the office,” points out Andrew Busby, founder of Retail Reflections, which analyses consumer habits.
Fashion brands have been continuing to engage with their audience in the last few months even when they haven’t been able to trade. “Primark continued to connect with customers via social media to ensure they didn’t desert them while stores were closed,” Busby says. This interaction could prove vital as the UK begins to return to some sort of normal, he suggests. At the other end of the price spectrum, some luxury brands have offered live streams of their shops, so consumers can “browse” virtually, giving them some of the same experience as actually visiting a store in person.
“The impact of Covid is just accelerating trends that were already visible in the industry – the switch to online, the polarisation across value and luxury – these are not new things, but we’ve seen several years’ worth of change in a few weeks,” says Anita Balchandani, partner and retail expert at McKinsey.
Changes in working patterns have caused shoppers to seek different fabrics and materials in order to be more comfortable at home, she points out. The challenge for brands is working out which of these trends are here to stay.
“The future is definitely pointing to how comfort and fashion and style can be combined. True understated luxury will trump overt ‘pretend’ luxury. So it will be less about [luxury brands] creating more affordable sub-labels, because that can have a brand-diluting effect. Rather, we’ll see a broadening of the brand offer across a wider set of categories that are more relevant to this new lifestyle.”
In the early weeks of the pandemic, fashion simply wasn’t on consumers’ radars – most were more concerned with buying food, health or entertainment goods. “Now that we start to see consumer appetite and interest in fashion come back, our view would be that the value segment would remain resilient because we expect a heightened sensitivity to levels of income,” says Balchandani.
Consumers may be keen to buy less, but buy things that last longer, leading to increased sales for the luxury brands that tap into the right trends.
“Consumers are going to be drawn to brands with stronger stories, better provenance and so on. That will probably take brands more in the direction of doing few things really well and being relevant to consumers’ lifestyles.”
Alice Marsh, a blogger and influencer who also works as a personal stylist in a department store in west London, thinks there is a place for middle-market brands as long as they are keeping their offer fresh. “Some people I’ve spoken to have worked throughout [the lockdown] so they have actually managed to save money. I have had people coming in looking for a total wardrobe refresh for the new season – especially if they’ve put on weight.”
She thinks formal dressing will endure as people begin to grow tired of wearing joggers and a sweatshirt.
But people may turn to local independent boutiques rather than the larger high street names, as a dual desire to shop locally for convenience and to support local businesses endures. Meanwhile, Farmer thinks the days of the office dress code are over. “It is going to be about sustaining the look of being professional while still being relaxed,” she predicts. She also thinks the mid-market brands will survive as long as they move quickly to appeal to customers who might have changed their habits, particularly around issues of sustainability.
Indeed, change on this front seems more likely to come from consumer pressure than from regulation.
Recommendations made by a parliamentary select committee report last year were roundly rejected by the Government.
MPs had called for more transparency in the supply chain and mandatory environmental targets for retailers, after warning that “textile production contributes more to
‘Covid is accelerating trends. We have seen several years’ worth of change in a few weeks’
climate change than international aviation and shipping combined”.
A McKinsey survey carried out in April this year found that of 2,000 German and British shoppers, 67pc believe the use of sustainable materials to be an important purchasing factor, and 63pc consider a brand’s promotion of sustainability in the same way.
Farmer says: “The customer [for mid-market brands] is probably becoming a bit more considered and thinking ‘do I actually need five summer dresses or could I spend a little more and just have three?’. It is a great opportunity for retailers to get involved in that movement towards a more sustainable industry.”
TK Maxx has launched its Give Up Clothes for Good campaign with TV presenter Laura Whitmore, as retailers focus more on sustainability