The shifting state of the fashion industry

2020 is the kind of year nobody expected. The pandemic means the fashion industry is undergoing unprecedented shifts and accelerating the changes that were already happening. Some of these are irreversible and will change how we approach apparel products forever.

Not surprisingly, there is an increased prominence of online shopping, as consumers adhere to stay-at-home guidelines and retailers are making it easier to shop from the comfort of their couches. In addition, more physical stores are closing, as companies look to reduce their footprint and optimize costs out of necessity, rather than convenience.

The coronavirus will leave a significant mark. Companies have suffered a heavy hit to their revenues due to store closures and decreased consumer activity. The latter is also true of online shopping, as items such as clothing and footwear are not deemed essential in a world fighting a pandemic. In addition, many consumers have unfortunately suffered a reduction or loss of income or other economic setbacks.

There have been unexpected effects on the fashion sector. But rather than completely changing the outlook for the industry, as has happened in other sectors, it has simply accelerated what was already taking place. Before, optimizing a company’s physical store footprint was seen as important, but now this is a must, and retailers must make this adjustment immediately to survive. Even as we try to return to some kind of normal, it is clear that the economy has suffered, and reduced spending will be our reality for the near future. Companies must adapt accordingly.

Capgemini is keenly aware of the changes unfolding in the fashion industry and we understand the challenges in the new marketplace. The better-capitalized players with solid business models will probably make it out of this contraction and recover in time, but the majority of companies are currently in a struggle to survive and some have already declared bankruptcy. For the successful companies, the coming stages will define their place in the industry forever. This is a crucial moment to adjust market strategies and align processes and technologies for the new normal.

In the tough climate that lies ahead, we must move and adapt quickly. Or we will be moved, against unfavorable odds. Having the experience to understand the latest trends and the flexibility to adapt will be key. Capgemini has the knowledge and awareness to support retailers in these uncertain times.

Author details:

Gabi Ledesma is Vice President Global Retail and Consumer Products at Capgemini and has extensive experience in retail planning, operations, and global supply chain. With a strong focus on innovation, he helps clients improve business operations and solve complex business problems successfully. He can be reached at gabriel.ledesma@capgemini.com.