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What Will Be The Future of Fashion Retail Post Coronavirus?
At the height of the pandemic discussions around how fashion and retail would be forced to move towards different models of production and sales were the hot topic. Yet as things gradually return to ‘normal’, this conversation seems to be losing momentum.
So let’s revisit what the future of fashion and retail look like as we continue to grapple with Coronavirus for the foreseeable future.
Although many retailers have seen a surge in online sales as a result of the pandemic, this has not been enough to combat the drastic drop in physical sales.
E-commerce is not necessarily a cheaper alternative to traditional brick and mortar shops due to brands having to absorb costs such as picking and shipping the items which the customer does themselves if they shop in store as well as marketing costs.
In fact, in store sales are often used to subsidise high e-commerce costs and the repercussions of the reduced footfall in stores has already begun to surface with high profile brands and department stores announcing large jobs cuts nationally and worldwide.
In the past week British heritage label Burberry announced they would be terminating 500 jobs internationally, which makes up around 5% of their workforce in order to reduce costs by up to £55 million.
Ted Baker also reported that they would be letting go of 500 jobs and luxury high-street department store Harvey Nichols has proposed job cuts across all their stores.
It is clear that we are yet to experience the full economic fall out that Coronavirus will bring upon us. So how will our retail habits and priorities shift as a result?
In an Afterpay report in partnership with The Future Laboratory, they detail the emerging Gen-Z [1995-2012] demographic and how they are changing the face of retail.
What matters to Gen- Z today
One concern for Gen-Z documented in the report was financial wellness over aspirational spending.
Displays of wealth are less likely to be important status symbols to them as they prefer flexibility in their finances and are making more considered purchases.
The majority of 18-24 year olds who use Afterpay have their accounts linked to a debit card as they reject credits cards completely.
This is in line with wider statistics on Gen-Z’s financial habits which show that 72% of young people aged 18-24 in the UK have an ISA account whilst 52% do not have a credit card.
Gen-Z do not want to be in bondage to large financial commitments, instead opting for more financial control which explains why services like Afterpay and Klarna are popular amongst them.
Gen-Z are far more conscious about the impacts of their spending habits than previous generations and are combining sustainable practices with convenience purchasing moving towards community commerce.
This means they mix and match buying from smaller emerging brands which are birthed on social media as well as bigger fast-fashion brands for convenience.
In turn Gen-Z gravitates towards platforms that integrate social media and retail functions so an app like Depop which combines an Instagram like interface with reselling has a large Gen-Z user base.
80% of Depop’s British users are 13-24 years old and top sellers on the app are able to make over £150,000 annually.
Due to the branding culture that has been growing on social media over the last few years, emerging fashion brands are personally connected with their users in a different way that sees them have a more friendly and intimate rapport with their customers.
This has filtered up to bigger brands and as a result Gen-Z expect brands to be transparent, honest and open to discussion and collaboration.
Finally, it is a priority for Gen-Z that brands provide authentic touch points such as diverse representation in brand advertising. In the UK 63% of Gen-Z said they prefer to see real people in adverts compared to 37% of millennials who share this sentiment.
We are living in the identity generation, where there is more freedom to decide who you want to be and how you want to present yourself to the world and a key way to do this is through fashion.
‘Fashion is a paradoxical industry for Gen-Z: they seek an individualised aesthetic but assemble it from brands that are peer approved’
The Afterpay report highlights that Gen-Z want to feel that brands understand them and this means seeing themselves represented and reflected in stripped back advertsing, which is not aspirational but has a more natural and un-edited aesthetic.
Fashion and Retail as impacted by Gen-Z’s retail priorities
As Gen-Z gain more spending power, brands will have to make sure they cater to their priorities and values if they want to secure their coins.
This looks like branding/advertising that is personal and enables expression of individual identity rather than constricting it to a box.
They must also find the balance between contemporary retail concepts such as influencer marketing and content creation, resources Gen-Z look to as stamps of approval for fashion brands.
It will be important for more, if not all fashion brands to seamlessly integrate their retail outlets across physical and digital platforms, despite the added costs this will inevitably incur to thrive post Coronavirus. Providing more flexible payment methods will also be a must.
Lastly more brands will need to be more transparent about their practices with a pro-active focus on sustainability and ethical production.
