Shopping habits have been changing for many years, with reduced footfall in physical stores leading to increasingly empty high streets. The trend towards buying online has been significantly accelerated by the recent pandemic. Retailers have been forced to close shops for the foreseeable future which has resulted in new pressures to perform better online, a challenge which has been met with varying degrees of success.
Figures show spending on goods other than food, including fashion and jewellery, has fallen by over a third due to decreased demand, financial security and store visits. Online sales have shown promising signs of growth but it’s yet unclear whether this will cover retail losses. Despite a consistent upturn in internet shopping over the years, around 80% of transactions still happen in store, meaning there is a substantial gap to close. Hugo Boss, for example, has reported an overall loss in its first quarter despite its online business sustaining strong performance in 2020.
Although eCommerce successes could mitigate against some of the damage, buying behaviour online is often very different to offline. This is particularly marked in the luxury sector, which has traditionally evaded digitisation over concerns about exclusivity and the reluctance of consumers to make expensive purchases online. Evidence suggests customers are also less likely to make impulse buys online, yielding lower average order sizes. Increased return rates, which are costly for retailers, due to issues with sizing fit, quality and colour are a further drawback.
While fashion continues to be badly affected, a few categories of apparel have actually experienced a surge in popularity. Online sales of sweatpants have witnessed a dramatic increase, along with yoga pants, bathrobes and other comfortable loungewear. Matching co-ordinates, particularly in neutral and pastel tones, have been widely sought after, as well as colourful tie-dyed athleisurewear.
The ability to capitalise on these sudden trends has varied. Online retailer Boohoo, who reported a 54% profit rise in April, has managed to rapidly adjust to demand due to short lead times. Other digitally native brands also appear to have the advantage from early investment in their eCommerce strategy, something which might make all the difference to their survival.
By Rebecca Taylar