The State of Fashion 2021
Hear our thoughts on this year’s highly anticipated report.
Each year, we at The Retail Darwin continue our effort to dissect key trends from the The State of Fashion report by The Business of Fashion in partnership with McKinsey & Company, identify themes especially relevant to the retail industry, and comment on them with our own thoughts. This year, we delve into three emerging trends: Retail ROI, Deeper Partnerships, and Less is More.
This year’s report comes with heightened anticipation as we remain acutely aware of the level of uncertainty in the recovery period amidst the ongoing pandemic. In the last three years, we have seen some of the same themes of agility, flexibility, and increased reliance on data analytics weaved throughout, albeit heightened by the pandemic.
Retail ROI: The notion of an impending retail evolution has only accelerated since its pre-pandemic days. BoF/McKinsey predicts a redevelopment of the retail footprint that we’re seeing IRL and forecasts the fashion industry to recover to 2019 sales numbers nearing 2022-2023. As hybrid flagship stores gain traction, the store experience is becoming hyper-focused on local economies. Paired with high quality retail spaces, the “halo effect”—the omnichannel idea that brick and mortar spaces often amplify unaccounted sales through other digital channels and brand experiences – rings true.
Deeper Partnerships: It’s no surprise that brands are tapping into their networks, partnering in impactful and carefully curated ways to create relationships that do not solely rely on transactions, making way for the desire for flexibility in the business model. A recent example like Gucci x North Face taps into recent gorpcore trends shows the powerful nature of brand partnerships and crossovers into 2021. For those brands who have not found themselves as high performers emerging from the pandemic, we may expect these brand crossovers to show themselves as acquisitions instead.
Less is More: This theme is rooted in a “profitability mindset” – a concept our teams speak on daily. Increasing sell-through and closely managing inventory levels by cutting back on overstock and avoiding discounting models require heavily investing in your team and reimagining KPIs for the new retail climate. Sales and marketing expert Dave Kurlan explains concisely: If you don’t engage, you can’t convert. We often refer to a commonly known standard that it costs nearly five times as much to convert a new customer as it does to keep an existing customer satisfied. Invest in your KPIs through streamlined operational structures, increased average order value, and heightened engagement with the consumer—both digitally and in store.
To learn more on how we’re helping retailers rethink and reach their goals, reach our Retail Experience and Incubation team at retailincubation@wsdevelopment.com