As fashion stores closed, alternative routes (private sales, online, e-mail or telephone) generated 12% of forcasted sales, not being able to compensate the loss generated by the lockdown. On the other hand, Fashion pure players platforms and marketplaces Net-à-Porter, Yoox and Farfetch increased sales with average 37%. Asos marketplace, the platform where customers shop the best new and vintage fashion from independent boutiques around the world, has reported 140 new independent boutiques over may 2020, after lockdown measures creating a “surging demand” for brands who primarily sell through bricks-and-mortar stores or at markets to have an online presence. This increase is close to 100% growth in brands versus last year. Most pure players (marketplaces) reflected higher sales due to substantially increased conversion rates. Farfetch got 123 million visitors from December 2019 until May 2020. Boosted by the crisis, most marketplaces nearly double turnover in this first quarter. With containment measures and store closings in the first quarter 2020, luxury enthusiasts have had no choice but to turn to eCommerce platforms. Indeed, during that quarter, online marketplaces continued to gain market share, in a context particularly favorable for e-commerce companies. Zalando was launching end of March a special partner program for retailers in the Netherlands and in Germany.
The winners: the e-commerce platforms. The losers….
H&M sales online and offline in France have plunged 71% since early March country by country, the group has detailed its commercial balance sheet March to May 2020: in Europe, Italy shows the biggest drops in activity (-80%) when the Swedish (-31%) and German markets (-46%) resisted better. H&M corporate declared a 57% drop in sales since March 2020. Online sales, on the other hand, are already operational in 46 of its 51 markets and increased by 32% over the period, high lighting the importance of digital in the current context.
The Spanish textile giant Inditex published a net loss of 409 million euros in the first quarter 2020 of its staggered fiscal year, due to the impact of the covid-19 pandemic. However, the fall in sales between the start of February and the end of April was limited to 44% (year on year) while the group saw up to 88% of its stores closed during the lockdown period.
In France, Celio, which has lost nearly 100 million euros in turnover (out of an annual total of around 800 million euros) due to the closings of its stores during the confinement, announces that it is undergoing safeguard procedures.
Offline Fashion retailers have particularly suffered from the lockdown. Some popular fashion brands have benefited from a shift of sales towards the internet, even if this transfer is far from sufficient to compensate for the suspension of physical sales. Moreover, many consumers moved online for the first time, merely as visitors, not necessarily converting into sales. The global luxury market is expected to plunge by 20 to 35% in 2020 impacted by the Covid-19, global luxury sales could drop up to 35% in 2020. The return level of 2019 is not expected until 2022-23.
Covid-19 disruption: shopping habits (sustainability, circularity, green logistics, proximity) could spell end of fast fashion…made in China.
Research shows consumers are following younger generation’s lead in move towards sustainable fashion, bought online. Peer-to-peer shopping app Depop that allows shoppers to buy second hand items from each other has seen a 90% increase in traffic since 1 April 2020. Depop visitors went up from 5,7 million monthly visitors to 6,8 million visitors in may 2020.
VINTED France, a leading European consumer to consumer marketplace for used vintage fashion hits nearly 24 million visitors on his website in may 2020. With the high street and the fashion industry brought to its knees by the coronavirus pandemic, the ‘buy less, buy better’ ideology of generation Z could see the beginning of the end of fast fashion; featuring rented items and others bought from resale vendors – becoming the new normal. 28% of people are recycling or reusing more clothes than normal and 35% of women intend to buy fewer clothes in the future. We see new investments in sustainable fashion and manufacturers to push towards a circular localized economy, producing durable fashion.
New online cross-border consumer to consumer and peer to peer platform businesses emerge! “Blue Planet effect”.
This emphasis on sustainability, non-mass-produced goods and uniqueness mirrors the consumer values of the younger generation whose attitude towards fashion has been shaped by the “Blue Planet effect”. Before the pandemic two-thirds of clothing was purchased in stores, but consumers had already found alternatives to bricks and mortar. Their sophisticated modes of consumption often outpacing what the high street could offer.
Shopping through online resale platforms such as Poshmark, Grailed, Unown, Rebelle, Vestiaire Collective and clothing rental sites, all of which have seen a sales boost during lockdown. Being able to ‘do something’ – upcycling, customizing or reusing rather than discarding – let younger people feel they are part of a movement, and that mindset has been popular even prior to the pandemic. More and more consumers will be comfortable with variety in their consumption choices – from buying new to circular options including rental and resale. A ‘mix-wardrobe’ is inevitable. Decluttering your wardrobe too! Rental will continue to expand, given consumer sustainability consciousness and a reset in consumerism. New subscription based online personal styling services emerge like Stitch Fix and Outfittery. Curated platforms emerge. Depop allows consumers to do both; resale as an alternative to shopping ‘new’. Depop gives the financial incentive to buy and sell garments, rather than leaving them unused in a wardrobe or sending them to a landfill.
Future of fashion and retail is under debate
Consumer confidence in “Made in China” is currently disrupted. China dominates our supply chains. But cheap production has its price: enormous dependency, and this has now consequently interrupted supply chains, with extreme delivery bottlenecks and a reduction in availability for online shops. In economic terms, we are therefore facing extreme challenges. Fashion calls for more social and environmental sustainability. The coronavirus pandemic forced consumers to adopt new habits, reevaluate priorities and shift consumption, and businesses pivoted to meet these immediate demands, adjusting to a new normality, where sustainability and circularity are standards. The new winners are the e-commerce cross-border platforms.
“Times of difficulty are great drivers of change, of innovation and there are so many good initiatives being started up around the globe”, says Carine Moitier, founder of Cross-Border Commerce Europe. She is certain that in a post-lockdown world many of these changes will persist. The innovation being driven across the world is contributing to defining our new normal. That is the reason why Cross-Border Commerce Europe launches CBCommerceNEXT.
About Cross-Border Commerce Europe:
Cross-Border Commerce Europe is the European network and knowledge platform for all eCommerce and omnichannel players present in at least three countries in Europe. CBCommerce.eu brings the different actors in contact with each other to increase visibility, share knowledge and figures, discover trends and specificities of each European country.
For more information, testimonials or interviews, you can contact:
Carine Moitier
Founder Cross-Border Commerce Europe
Mobile: +32 473 26 05 61
E-mail: carine.moitier@cbcommerce.eu[/vc_column_text][vc_column_text]Press coverage
Benelux
Emerce
Coronavirus brengt Europese moderetail grote veranderingen
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RTL
Coronavirus – Les ventes en ligne n’ont pas compensé la fermeture des magasins de mode européens
https://www.rtl.be/info/monde/economie/coronavirus-les-ventes-en-ligne-n-ont-pas-compense-la-fermeture-des-magasins-de-mode-europeens-1230436.aspx
Retailnews
‘Fashion na corona: de marktplaats wint’
https://retailtrends.nl/news/61018/fashion-na-corona-de-marktplaats-wint
La Libre
Coronavirus – Les ventes en ligne n’ont pas compensé la fermeture des magasins de mode européens
https://www.lalibre.be/dernieres-depeches/belga/coronavirus-les-ventes-en-ligne-n-ont-pas-compense-la-fermeture-des-magasins-de-mode-europeens-5f07efce7b50a6139b127c38
Le Soir
Coronavirus – Les ventes en ligne n’ont pas compensé la fermeture des magasins de mode européens
https://www.lesoir.be/312407/article/2020-07-09/les-ventes-en-ligne-nont-pas-compense-la-fermeture-des-magasins-de-mode
Fashion United
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https://fashionunited.be/nieuws/business/pandemie-zorgt-voor-positief-effect-op-europese-online-modeindustrie/2020071028815
Trends Tendances
Les ventes en ligne n’ont pas compensé la fermeture des magasins de mode européens
https://trends.levif.be/economie/entreprises/les-ventes-en-ligne-n-ont-pas-compense-la-fermeture-des-magasins-de-mode-europeens/article-normal-1309449.html[/vc_column_text][/vc_column][/vc_row]
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