COVID-19 Longer-Term Implications Apparel Sector | FTI Consulting

Consumer Reactions to COVID-19 & its Longer-Term Implications for the Apparel Sector

Retail & Consumer Products | Corporate Finance & Restructuring

June 11, 2020

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More than any “non-essential” retail good, COVID-19 has devastated the apparel sector since March. According to Census Bureau data, apparel store sales plunged 89% (YOY) in April and 46% in the last three months as retailers shuttered stores across the country (and in some cases, globally).

Accordingly, consumer behavior shifted drastically in response to the COVID economy, compounding retailers’ mounting list of woes. Retailers must commit to swift actions to stay engaged with the consumer while remaining solvent. Based on core trends revealed in a recent FTI Consulting survey of 1,000 U.S. consumers, we suggest retailers bear in mind the following as they plan for re-opening post-COVID-19:

  • Social/Brand engagement is paramount: Active social media support for COVID-related efforts for patients, front-line workers and employees pays dividends for retailers as they build strong loyalty with consumers. Social engagement in this area impacts brand loyalty nearly to the same degree as price and value (~35% of respondents) — a stark difference from past campaigns related to social causes which struggled to affect customer loyalty (~3-4% of respondents).
  • Focus on the “new” experience: As consumers react to the COVID-19 pandemic, demand for a contact-free (or at least socially distant) shopping experience increases. Retailers will need to pivot strategies to provide a safer shopping experience (potentially in lieu of personal, high-touch experiences) and work to manage costs associated with decreased traffic and increased safety and distancing policies.

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