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Coronavirus shines a light on relevance and purpose

Looking back to before the pandemic, Australian clothing and footwear retailers appeared well-placed to face the opportunities and challenges that have since occurred.

CommBank research conducted in January 2020 showed that over the past five years, clothing and footwear retailers were more likely than other retailers to have invested in technology and e-commerce capabilities to accommodate strong demand from digital shoppers. This has put many in good stead amid the acceleration of online shopping that coronavirus has brought.

Reflecting that, many clothing and footwear retailers were also already right-sizing their store networks and footprints before coronavirus took hold. This has become a more important consideration as retailers navigate social restrictions and hygiene-conscious shoppers.

Despite taking these steps, many clothing and footwear retailers remain under immense pressure. While many existing trends have intensified, coronavirus has also introduced new and persistent challenges. Ongoing trading restrictions, subdued foot traffic, and fluctuating demand are just a few.  

However, the CommBank research showed that in January 2020, around two-thirds of clothing and footwear retailers felt stronger than they did in 2015, more than any other category. A focus on understanding customers and market trends, along with investing in brand purpose, were some of the key characteristics that set them apart from weaker retailers.

As coronavirus tests the resilience of many clothing and footwear retailers, we spoke to one brand that stood out for its performance during coronavirus. And Jonathan Salfield, co-founder and marketing director at sustainable streetwear brand Afends, believes the traits of strong retailers before the pandemic now having an even stronger application.

Managing uncertainty

According to Jonathan, Afends already had comprehensive e-commerce infrastructure in place to accommodate the uplift in demand from online shoppers. As a predominantly direct-to-consumer business, Jonathan says the more significant changes to the way Afends operates relate to keeping pace with changing market trends and minimising uncertainty.

“You can plan in detail internally,” Jonathan says. “But if a market is in lockdown and you can’t get orders out, you encounter revenue and stock issues, so we have made a lot of changes.”

“The biggest change is to increase the number of seasonal collections from four to six. This allows us to be closer to our market, better predict trends and make tighter and more compelling product selections. This decision was to support planning, rather than a ‘fast fashion’ approach – by planning every two months, rather than quarterly, this reduces our inventory and cash-flow requirements. Also, we’re getting the collections out faster which means we aren’t looking as far into the future and that is resonating well with customers.”

“Seasonality is a huge challenge for most fashion retailers, but the positive for Afends is that people buy us more for our summer products than our winter products and we remain focused on what we do well. We have a presence in multiple global locations so can follow the demand as seasons change.”

While 70% of Afends’ business is direct-to-consumer through its websites and five flagship stores, the remaining 30% is via wholesale channels through local and international stockists. Jonathan says that to further reduce the uncertainty through these channels, Afends moved to a cash-on-delivery (COD) model for its wholesale partners and introduced Zip Business as an alternative to provide interest-free payment options, so Afends’ focus could remain on products and services rather than financing.

“To manage the risk of shipping a wholesale order to a retailer that may not be able to open its doors or be in a position to pay, we saw moving to a COD model as important. We compensated by offering a payment option, and overall, the response has been positive.”

Living by the brand purpose

Even before the pandemic, CommBank research from January 2020 showed that consumers saw room for improvement when it came to having a relevant and meaningful brand purpose, something which is a focus among stronger retailers.

Against a backdrop of changing consumer attitudes, many in the industry have also predicted a watershed moment for fast, disposable fashion as coronavirus prompted consumers to reassess what they actually need.

Jonathan agrees, saying that “successful retailers within the clothing and footwear industry will make better quality, more sustainable products so that customers will potentially consume less but have better quality things.”

“We decided about five years ago that we needed to take responsibility for our actions in every facet of the brand from the raw materials to how staff and factory workers are treated. We truly believe in sustainable and ethical practices, and the research shows that’s what customers want.”

“We combine this focus on sustainability with a commitment to producing a high-quality product using free-thinking designers. Everything we do we try to do it our own way, and I think that mindset is contagious. Once our products go into partner stores, we have a higher sell-through rate than other brands and we have seen a flight to quality during coronavirus that is supporting sales.”

Good experiences rely on transparency

Jonathan explains that transparency in the way that retailers engage with customers is also now even more important. He says that it is both critical to delivering on Afends’ purpose, but also extends to every customer touchpoint. 

“We believe in end-to-end transparency from discovering the brand all the way to when the product is ready to be recycled or biodegraded,” Jonathan says. “This is crucial to delivering a positive experience for customers, and it relies on clear communication at every step.”

“This includes simple steps like being very clear around our returns policy. However, in an e-commerce world where you are only seeing a photo of an item before you buy it, we need to provide a comprehensive and accurate digital experience.”

“We try to represent the product in as much detail as possible through photography and our written descriptions. We showcase where the product was made, which factory, and provide information about that factory including the age of the youngest worker. We are trying to be as transparent as possible and empower our customers and we believe everyone should do that.”   

So, years of investment in technology and e-commerce equipped the sector for the turbo-boosted shift to digital shopping during the coronavirus pandemic. For retailers operating physical stores, moving beyond government restrictions and regaining the confidence of shoppers are likely to be top priorities.

For all clothing and footwear retailers, remaining close to market trends and increasing relevance among customers is harder amid lower visibility of the future. But as Jonathan highlights, having a meaningful purpose and understanding what customers want is likely to remain crucial to the strength of retailers well beyond coronavirus. 

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