The imposed community lockdowns, social distancing and the impact on production due to the COVID-19 pandemic have forced the fashion industry to shift its focus online. A lot of brands have also put assets such as factories, and supplier and logistics networks to good use to produce and distribute face masks, hand sanitizers and laboratory gowns. Many have also donated money, products and services to their local and global communities.1 However, months of restrictions still threaten the industry as a whole. So, what can brands do to weather this storm and come out strong?
Innovate when times are tough
In recent years, several brands have emerged as “super winners” in McKinsey & Company’s State of Fashion 2019 report2 for pioneering innovation in the fashion industry. Even though the State of Fashion 2020 report3 points out that the Global Fashion Industry growth is at a lower point this year than in 2019, there’s significant growth in other areas, such as in emerging regions, segments and categories.
Instead of holding out for better global forecasts, super winners such as Nike, Inditex (parent company of Zara), Kering, TJX and LVMH decided to opt for radical innovation, brand investment and operational efficiency. They switched their focus to opportunities presented for emerging regions, segments and categories and have successfully diversified to weather the storm.
These super winners also developed internal processes with strategic clarity:
- Made decisions based on data. Super winners leveraged data and analytics to develop business and product concepts and adopt aggressive positioning to outpace the competition, while others made the mistake of using data after product development.
- Prioritized time-to-market. They focused heavily on delivering products to market in fewer than eight weeks, effectively managing product launches in time for every “micro season.”
Boost earnings over revenue growth
According to BoF and McKinsey’s The State of Fashion 2020, “Successful companies will be the ones that make moves early and focus on boosting earnings over revenue growth and work out how to improve productivity while ensuring operational and financial flexibility.”
Super winners took advantage of customer insight from data to make better business decisions and further differentiate themselves. They also re-calibrated their approach by focusing on improving their existing digital capabilities, while investing in new tools to ensure data management sat in the middle of their strategy. This enabled them to confidently engage consumers across multiple channels, especially online, enhance their distribution capabilities, optimize their supply chain management and improve product experiences, which later resulted in sales.
Inaction breeds doubt and fear
Dale Carnegie was quoted saying, “Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy."
By choosing to innovate during tough times instead of playing safe or saving, super winners gave themselves the tools to maintain customers and remain relevant in the market during times of change. By using insights from data, they were able to identify the most attractive spaces and channels to play in during these trying times to capture demand and boost earnings.
Sources:
- https://www.businessinsider.com/amazon-walmart-lvmh-hm-support-coronavirus-pandemic-2020-3#loral-is-producing-hand-sanitizer-for-hospitals-care-homes-and-pharmacies-5
- https://www.businessoffashion.com/articles/intelligence/the-state-of-fashion-2019
- https://www.businessoffashion.com/articles/intelligence/the-state-of-fashion-2020-bof-mckinsey-report-release-download
