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#looktothefuture Strategies for Emerging from Covid-19

Inspired by the raft of useful information flooding my inbox from the media and my network and this recent sad photo I took in Central London, I thought I’d consolidate some of the best ideas and produce a quick guide with some practical ideas to help premium and luxury brands and retailers manage and emerge from the current lock down. 

 

🏠 Learn how to be productive even in isolation

🤑 Spend your money carefully 

🤹‍♀ Control what you can control

👗 Ideas for inventory

👩👩👧 Talking to your community

 

🌈 What does the big picture look like for your business

Even before Coronavirus the fashion industry was not optimistic about 2020 and this crisis will accelerate the decline of struggling fashion brands and retailers and but for the innovative the future can be strong. The fashion industry expects to be disproportionally affected given its discretionary nature and it is estimated it will be a 12 to 18 months period before the dust settles. Although it is affecting our daily lives, instilling anxiety in our minds we mustn’t let this gloom stop innovation, we can make this period, a window of opportunity.

🏠 Learn how to be productive even in isolation

When working with clients, business leaders often highlight their staff as their best asset and in my experience, this is true. We all currently miss the camaraderie and atmosphere of a collaborative office, although there are some benefits to home working. Have your business managed to create a productive virtual co-working space for your teams? 

Humans thrive on structure, ownership and purpose. Start at 9am with a call to share plans for the day and loop back at 5pm to review achievements. Close contact, collaboration and a feeling of collective achievement will help keep morale up. Can the video channels (Zoom, Teams etc.) be left on with cameras and mikes off, so people can jump on for a catch up or chat at any time? New systems can feel awkward, but we are all using these technologies to communicate with friends, so it can quickly become a new normal. Keep in touch with furloughed staff, they are just as important as your customers and will also need regular communication to feel engaged. (WhatsApp, Yammer)

  • Daily team check ins
  • Keep in touch with furloughed staff
  • Add inclusive weekly virtual social events
  • Track and measure performance to highlight achievements and progress

🤑 Spend your money carefully 

Brands should be constantly reviewing their cost bases to identify measures for quick wins, assess their workforces and rationalise overheads. According to McKinsey & BoF’s recent report “If stores remain closed for 2 months analysis expects 80% of European and US fashion companies to be in distress.” This is a staggering statistic but show just how hard it is going to be.

There will be tough choices regarding how to make savings but failing to adapt might mean closure. For some, it might be that no matter how carefully you spend and how hard you try to cut back there just won’t be the cash. Despite best efforts there may be little you can do and looking for ways to be even more creative might be your only option. 

Put simply, to survive plan carefully, work and rework your cashflow using different hypothesis and keep reviewing the assumptions, today’s plans might not be applicable tomorrow. 

  • Fixed overheads, what can be reduced or delayed?
  • Do I need, and can I apply for a grant or loan?
  • What are current cash flow projections illustrating?
  • How long can the business be sustained?

Useful Links: 226 small business grands and funding programmes in the UK

https://entrepreneurhandbook.co.uk/grants-loans/

Government Covid-19 Support-online-briefing

https://commonslibrary.parliament.uk/research-briefings/cbp-8847/

🤹‍♀ Control what you can control

It is easy to be overwhelmed when so much has changed so quickly. Solving mission critical problems where we connect with others who might have different priorities can be frustrating so instead focus your energies on controlling what you can control. Most of us have a to do list that often gets ignored in the daily rush. I know first-hand that busy and stretched teams often run out of time when tasked with doing robust data analysis. 

“Control what you can control”

What new products and platforms are there to engage customers, enable your people to be more efficient and scale your business without additional head count. Anecdotally, speaking to some tech consultants their clients are currently getting better value from them as they have more time to really think about the fine detail behind upgrades and integration solutions.

Digital improvements:

  • Does your website look tired?
  • Does it operate seamlessly across channels?
  • Are your funnels effective at servicing customers?
  • Have you really analysed the data around digital marketing?
  • Are you spending wisely?
  • Find new way to engage consumers online

There will be a digital escalation and urgency, brands will continue to invest more in existing digital capabilities such as improving the customer journey and broader consumer experience. Digital customer management tools now allow brands to keep up an ongoing dialogue with individual customers and there has been a growth in bespoke shopping experiences on and offline. On the Chinese ecommerce website Taobao, livestreaming has increased 700% year on year. Increasingly retailers will change their mindset and operating like pure digital players. Roles will be reversed, and the question will now be “How can a store presence support my e-commerce sales?”

Conduct a sustainability audit:

Even before the pandemic values around sustainability had become a focus. Polarising our views around materialism, over-consumption and irresponsible business practices. Are your design and sourcing team familiar with the UN’s 17 Sustainability Development Goals, ask them to audit your current practices. Which are relevant to your business and what can you impact? 

Although complex and confusing, step one is to understand what your brand stands for and how you want it to be seen. Bench mark your current impact and draft a road map that will enable the business to achieve its long-term ambitions. What are the targets for the next 6 months, 12 months?

  • What is composition of the main fabric you use? How is it sourced?
  • How confident are you that your suppliers meet global standards?
  • Can you create circularity amongst your hangers, for example?
  • Is all the packaging used recyclable and recycled?
  • Is this an opportunity to introduce a circular product into the collection?
  • What about working with a charity on waste?
  • Is calculating your carbon foot print important for your customer?

Understand the answers to these questions and setting goals will enable you to hit the ground running as we move forward. 

Useful resources: UN’s 17 goals

https://www.un.org/sustainabledevelopment/

Tools to help you plans

https://www.goodbusinesscharter.com

👗 Ideas for inventory

Unfortunately, the discount mind set will plague us for the remainder of 2020, the inventory glut will force brands to be conservative about their Autumn 20 & Spring 21 production runs, if indeed they buy product at all. But cancelling stock is very short sighted and highlights the inequalities across and interconnectedness of our industry, magnifying how broken some parts are., if our international suppliers fail so will we. Poverty in some of these countries is rife and the poor people will be hardest hit.

“The goal must be to extract as much cash as possible while minimising any damage to the brand”

For most the goal must be to extract as much cash as possible while minimising any damage to the brand. The size of business, expectations for Autumn 20 and existing stock holding would inform my approach. 

Expectations for market segments

  • Middle market and department stores are expected to be hit hardest 
  • The value sector and super markets are still functioning
  • Luxury brands are currently experiencing a bounce back in China, but smaller players in luxury will struggle to compete against the giants (Kering, LVMH) who control everything from supply chains to retail estate

Existing inventory

  • Can any existing orders for 2020 be rescoped?
  • Unsold SS20, what are the options? 
  • How are core lines performing? What is its rate of sale, will there be broken sizes by Autumn 20
  • Aged stock what can be used successfully? Think creatively with a photographer or artist to represent. 
  • What new product is really needed?
  • Can technology help reduce sampling and waste?

Actions to clear stock

  • How quickly can stock be liquidated and turned into cash, at what cost? 
  • Offer flash sales on new items now, (Last week, Rixo offered customers 30 percent off new pieces online, the first time it ever marked down new merchandise)
  • Could Pop up’s in other countries be an option?
  • Have you compelling visuals that will allow you to position your brand and your product in the optimal light to get the best price?
  • Last resort is to work with charities to get rid of unwanted clothes.

👩👩👧 Talking to my community 

Data suggests that in Europe and US more than 65% of consumers expect to decrease their spending on clothing, with 40% decreasing on all spending. To entice your customers, asking yourself “What are the biggest challenges my current customers are facing right now that we can help them solve?”

“What are the biggest challenges my current customers are facing right now 

that we can help them solve?”

What original campaigns and ideas to engage appropriately can we find? There are so many inspiring stories about how brands are adapting to speak to their different audiences, Drapers recently highlighted some creative ideas implemented by Levi’s, Mr Porter, John Lewis and Ganni on April 17. Remember it must make sense to your brand and your audience.

  • Ask you teams for their best and brightest ideas?
  • How are our customers engaging with you now? 
  • Are there opportunities to collaborations with brands who have similar customers? 
  • Can marketing activities be co-ordinated with your current partners, suppliers and agencies?
  • Share staff stories, supplier stories, run webinars with your makers?
  • Can staff be used to communicate directly with our customers, using digital customer management tools?

Check out the online panels last week from both Vogue Fashion Conversations and Fashinnovation 

https://bit.ly/3cSQF6V

https://event.fashinnovation.nyc/

 

🌈 What does the big picture look like for your business?

We mustn’t let this gloom stop us from innovating, it could be our best window of opportunity. There were winners following Sars and the financial crash of 2008, and there will be winners following this pandemic.  Opportunities are out there for those who pivot and look creatively for new solutions. Innovation is key, and we must keep thinking outside the box. As seen in China, the re-opening of physical retail doesn’t not mean a return to normal. Successful players will embrace new technologies and behaviours for the long haul.

“Innovation is key, we must keep thinking outside the box”

  • What is your business goal? 
  • Where do you imagine the business in 3 years? 
  • Take advantage of new economic and consumer models 
  • Now is the time to accelerate trials and new integrate technologies at speed
  • Review hiring strategies and team structures
  • Reducing customer touch points in store

 

What does the big picture look like for fashion and retail, will the winners take all?

Recovery will coincide with a recessionary market and a discount mind set will plague us for the remainder of 2020. Travelling shoppers will take longer to return, which means travel retail and tourist department stores will continue to suffer into 2021. It’s time to rewire the fashion system. There is considerable talk of rethinking buying cycles, valuing the product more and not relying on endless discounting. Current models, particularly fast fashion is unsustainable from a social and environmental point of view. There have been many discussions on how this might change and what the new normal will look like. Although it is currently affecting our daily lives and instilling anxiety, we mustn’t let this gloom stop us, we can pivot, be successful and use this as an exciting window of opportunity.

Additional sources: Business of Fashion, Drapers Record and McKinsey’s State of Fashion Report.

https://mck.co/2W09Zs7

 

Contributed by Karen Bendell

For more information on Karen and her services as a brand consultant, check out her feature on our website here


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