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Covid-19 impact & shift to online retail apparel

Full report: Future of European Apparel Industry: Evolution of Stores

Covid-19 impact & shift to online retail apparel

2 minute read

This article looks at the impact of Covid-19 and the shift to online; particularly the impact of consumer behaviour on European retail sectors as shoppers experience more digital customer journeys since the pandemic. It forms part of a report entitled: A seamless fit - Evolution of stores in a digital-centric customer journey.

 

The European clothing sector is traversing through a profound transformation period. Covid-19 has clearly disrupted global economies, fractured international supply chains and has permanently impacted the way consumers live, work, and shop for apparel.

For most, 2020 will be marked as a year that kicked off successive waves of disruption. Demand was decimated by unprecedented stay-at-home mandates, store closures, and restrictions on travel and social events.

The apparel sector was one of the most negatively impacted sectors. Business models had to quickly adapt to accommodate new, extraordinary trading conditions. However, for some, this was a retail gift to boost online engagement. Digital uptake has soared, with some retailers accelerating their digital transformation by years in just a matter of months; new technologies were adopted, new partnerships formed, and new business models embraced.

 

Covid-19 impact & shift to online retail apparel - Retail Economics

 

As restrictions tighten and relax in response to the crisis, retailers and brands must reimagine their proposition to reflect a more digital-centric customer journey. As such, an evolution in the purpose and role of physical stores is critical.

 

"Increased engagement in digital will persist for many parts of the market, based on behavioural shifts since the pandemic and long-term shopping intentions.

[Continued below]

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This work forms part of a wider piece of research and is a downloadable in pdf format

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Shopper types emerging from Covid-19 impacts

Covid-19 impacts have been felt unevenly across consumer segments depending on age, affluence, technological proficiency, and many other factors. One of the most significant challenges currently facing European apparel brands is assessing whether these shifts towards greater use of digital channels will persist beyond the impact of the pandemic. Our research suggests that increased engagement in digital will persist for many parts of the market, based on behavioural shifts since the pandemic and long-term shopping intentions. The work identifies four main consumer archetypes for European apparel shoppers (Fig 1).

 

Fig 1. - Four key shopper types have emerged over the pandemic

Shopper types emerging from Covid-19 impacts - Retail Economics

Source: Retail Economics

 

Digital Embracers (30%) – permanent change in shopping behaviour, shift from stores to online Digital Dabblers (18%) – temporary change in shopping behaviour, open to shopping more online Store Reverters (24%) – temporary change in shopping behaviour, will revert to store Store Loyalists (28%) – no change in shopping behaviour, loyal to store

 

Permanency of behavioural change

The shift towards digital has emerged as the most prolific impact for European apparel brands. Our research shows that just under half (49%) of European consumers have changed their apparel shopping behaviour as a direct consequence of the pandemic.

While some of these behavioural changes are temporary (e.g. from health/safety concerns, or capacity constraints), nearly a third (31%) of European consumers believe that how they shop for apparel will change permanently, even after the impact of the pandemic recedes.

The UK shows the greatest impact from behavioural changes with 36% of shoppers expecting to permanently alter the way they shop for apparel following Covid-19. This is the highest proportion amongst the four major European retail markets surveyed (Fig 2).

 

Fig 2. - UK Shoppers most impacted by pandemic

UK Shoppers most impacted by pandemic - Retail Economics

Source: Retail Economics

 

Differences by shopper age

Focusing on generational differences, our research shows that Millennial consumers (25-44 yrs) are most likely to feel that the pandemic has permanently impacted their shopping behaviour (34%). This age group (typically juggling family commitments and in mid-career) have increased their use of digital tools and time indoors during the crisis, resulting in an improved work-life balance (e.g. remote working, accumulated savings). As such, they expect to maintain these changes on a permanent basis.

 

Fig 2. - UK Shoppers most impacted by pandemic

Permanent consumer behaviour change greatest for Millenials - Retail Economics

Question asked: “Thinking about the way Covid-19 has affected the way you shop for apparel, which option best describes the impact on your shopping behavior?” Source: Retail Economics

 

Digital shift across entire customer journey

Digital technology is now at the epicentre of people’s lives, whether that’s communicating with friends and family, remote working, or shopping. Notably, its influence has become more pronounced across all stages of the customer journey for apparel. From the awareness of fashion brands and products to service and returns, many consumers have been exposed to new digital-first customer journeys, breaking down initial barriers of setting up online accounts, entering payment details and overcoming issues of trust.

 

Browsing vs buying

Our research shows that the permanency of the shift to online is greater for consumers when browsing compared to buying. In the UK, as many as a quarter of all shoppers intend to continue browsing more online for apparel than they did prior to the pandemic.

"One in three European shoppers say that since the pandemic, they now spend more time online browsing for clothing and footwear, with nearly 20% expecting this change to be permanent.

Covid-19 impact on EU Apparel - Retail Economics

 

Shying away from physical stores

Consumers across all European markets researched expect to visit clothing and footwear stores less frequently than pre-pandemic times. The greatest declines are expected across the UK (-26%), followed by France (-21%), Germany (-18%) and the Netherlands (-18%).

Overall, more than a quarter of European shoppers expect to make fewer visits to clothing and footwear stores than they did before Covid-19.

 

Download the full report here to discover more insights into how the online channel for apparel is rapidly changing and what this means for retailers and brands as we move closer to a post pandemic era.

Things to do now

Explore the next article in this series which looks at lost physical retail store sales within the apparel industry here.

Download the full report here

Found this short article interesting?

This insight article forms part of a thought leadership report entitled “A seamless fit - Evolution of stores in a digital-centric customer journey” produced by Retail Economics in partnership with Eversheds SutherlandIt is the first in a three part article series which explores the future of the European apparel industry and the role of physical stores. For retailers and brands seeking insight into the impact of the crisis across Europe, the full report provides data-driven insights and guidance for action.

View Full Report Here

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