The Apparel Industry: Tailored for a New Era
How is shopping behavior expected to change in the post-pandemic world? An FTI Consulting survey of 1,000 consumers provides insights for the apparel industry.
The economic catastrophe spurred by the COVID-19 pandemic was particularly harsh on the apparel industry. With the entire world practicing self-distancing, governments across the U.S. deemed apparel retailers “non-essential” business, forcing the closure of brick-and-mortar stores. Not unexpectedly, retailers saw their sales plummet.
Year-over-year store sales for apparel decreased an astronomical 89 percent in April (and by 46 percent in a three-month period alone) according to data from the U.S. Census Bureau.
As the United States eases into a post-COVID economy, apparel retailers should be aware of how consumer behavior changed during the lockdown — and what might be expected in the coming months. Key to apparel retailers’ adapting to this new normal will be their commitment to swift actions to stay engaged with consumer expectations while also finding ways to remain solvent.
Consider, for instance, the goodwill brands built by demonstrating active support for COVID-related causes. According to FTI Consulting’s Trends in the Apparel Sector survey, 36 percent of the 1,000 consumers surveyed said that support of COVID-19 victims and frontline workers influenced their brand loyalty. That is nearly the same number of respondents (37 percent) who said that “great prices” was the top influencer.
Among other enlightening findings from the survey:
- Price and value drove the majority of brand switching: 29 percent of respondents noted they switched brands during COVID-19 with price and value as inducements for change.
- When asked why they miss brick-and-mortar shopping, 54 percent said it was the ability to see, touch and feel the product.
- Convenience of online purchasing and preference for a contactless purchase/concerns about hygiene were the core drivers for customers not looking to return to stores.
- Online apparel sales are projected to cannibalize about 7 to 10 percent of store sales. Retailers must continue to improve distribution channels and automation to meet this demand.
As the year goes on, retailers should conduct a holistic review of their store portfolios to identify what store closures are necessary for long-term survival.
Despite the gloom and doom there is light: Nearly one-third of consumers say they will not change their shopping habits and are excited to return to stores for the tactile experience of shopping, such as trying on clothes and leaving with new purchases in hand.
To learn more about these trends, see the FTI Consulting article “Consumer Reactions to COVID-19 & Its Longer-Term Implications for the Apparel Sector,” which also includes a registration link to read the full survey results.
© Copyright 2020. The views expressed herein are those of the authors and do not necessarily represent the views of FTI Consulting, Inc. or its other professionals.
Senior Managing Director