This unpredictable humanitarian and financial crisis has caused any fashion strategy for 2020 to be thrown out of the window, and according to professional it may led to 27 to 30 percent decline of the total global fashion revenue. While fashion is currently focused on crisis management and contingency planning, we must eventually shift towards re-imagining our industry altogether.
Last week, BoF and McKinsey & Company released a Coronavirus Update to The State of Fashion 2020 — an authoritative annual report on the major themes in the fashion economy. The report outlines where the industry must focus in the long-term, analysing surveys, data and expert interviews to provide insight for fashion professionals as they embark on the 12- to 18- month period after the dust settles.
30% of fashion employees recognise that their company’s response to the crisis was ineffective. In the first theme, Survival Instincts, has a report that states recovery from the pandemic will coincide with a downturn market, which will lead to fashion players to build up there resilience planning and adapt their operating models.
56% of consumers said special promotions were an important factor when shopping for clothes in the 4 weeks leading up to 29 March 2020. The second theme, Discount Mindset, addresses the deep discounting plagues that retailers will face for the remainder of 2020, exacerbated by increasingly frugal and disillusioned consumers.
The crisis is a catalyst that will shock the industry into change — now is the time to get ready for a post-coronavirus world.” – Imran Amed, Founder and CEO, The Business of Fashion
700% year-on-year increase in livestreaming on Chinese e-commerce website Taobao since the outbreak of Covid-19. Digital Escalation is the third theme, as social distancing and lockdowns have elevated digital as an urgent priority across the entire value chain, which companies must scale up and strengthen in the recovery phase of the crisis or suffer in the longer term.
80% of fashion companies could be in distress after more than 2 months of store closures. Theme four, Darwinian Shakeout, analyses how the crisis will embolden the strong and accelerate the decline of companies that were struggling before the pandemic, leading to massive waves of consolidation, M&A activity and insolvencies.
The fashion value chain has been disrupted leading to rapid scaling up of innovation – from digital design to social commerce. The final theme, Innovation Imperative, examines how companies must introduce new tools and strategies across the value chain to future-proof their business models to cope with new restrictions, mitigate the damaging impact of the pandemic and adapt to economic and consumer shifts.