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The ongoing pandemic has turned Maslow’s Hierarchy of Needs upside down as shopping has shifted toward basics with many affluent experiencing online grocery shopping for the first time. An Affluent Perspective (AP) survey conducted by YouGov in early April reveals, for the first time these high net worth consumers are spending their time reserved for shopping doing other things like connecting with friends and family via digital devices, decluttering their homes, crafting or hobbies, spending time outdoors and exercising. This time that they spend in isolation is also forcing them to reset their priorities in life.
The sector that will benefit most from the reset would be the $4.5 trillion global wellness sector. Products and services offering real wellness benefits will gain in demand as mental and emotional wellness will become more important than ever. Luxury brands displaying their wealth and extravagance will fade away in a post-coronavirus world.
Luxury shopping to get modest
Post pandemic, one of the topmost priorities for luxury consumers would to be to secure a financially-healthy future. Though the financial status of the
ultra-affluent elites may remain immune to the aftermath of the coronavirus, the same would not be the case with the professional class.
The AP report states, as layoffs and pay cuts will impact may white-collar professions in America, around 30 million citizens are likely to be unemployed. Similarly, the revenues and incomes of around 31 small business owners will be cut dramatically. These people inevitably make up the high-earners-not-rich (HENRY) demographic.
These HENRYs comprise around 80 per cent of the target consumers for luxury brands. In future, these may not be able contribute to 80 per cent revenues of these luxury brands. However, their share in their annual incomes would be way too important to lose. However, the shopping habits of these HENRYs are likely to shift radically as they would have ample time to reflect on what’s most important to them now and in the future. They would now prefer to indulge in more modest, discreet luxury indulgences where high-quality and long-lasting utility take precedence.
Personal well-being to drive luxe sales
Luxury brands would now need to ponder how their consumers’ luxury values and lifestyles will change as a result of the reset they have experienced. Their goal for future should be to provide the true luxury of wellbeing to their customers.
As achieving their personal well-being would be on topmost priority of consumers, luxury brands would have to reset to their objectives to these new dimensions as they pursue their own post-coronavirus journey.
Year 2020 may prove to be one of the worst years for the fashion industry as consumers cut down on their discretionary expenses and focus on essential shopping. As a report titled ‘Time for Change’ by McKinsey & Company created in collaboration with Sourcing Journal notes, revenues for apparel and footwear sectors are likely to contract 27 to 30 per cent in 2020 year-on-year with even deeper declines in some sub-sectors and geographies.
Around 22 per cent of the supply chain stakeholders expect their sourcing volumes to be halved this quarter, though this shrinkage may ease in the back half of the year, with just 7 per cent of sourcing executives expecting their volumes to be cut by more than half. Almost 49 per cent expect sourcing volumes to contract between 20 and 50 per cent in the second half of 2020, making it a far cry from smooth sailing for all links in the supply chain.
The state of sourcing affairs
The survey reveals around 75 per cent respondents have already canceled existing production orders. This is severely impacting cash-poor manufacturers.
The liabilities of Bangladesh factories have already reached $10 billion, reveals BGMEA. While one-third of European companies haven’t cancelled orders, around 87 per cent of US businesses have. McKinsey says, this discrepancy could be due to the difference in structure of assortment between these two countries and their sourcing methods. The report reveals, smaller European players often draw on a more varied set of sourcing countries, including significant near- shoring options.
Many retailers are amending their payment terms. Around 71 per cent respondents reported paying less than half of their existing orders as agreed, and 18 per cent are not paying as agreed at all. As many as 41 per cent are renegotiating payment terms on more than half their orders, and 25 per cent are deferring payment on half of their orders.
The survey reveals, more than half fashion players are taking responsibility for goods already purchased, and in some cases, already used raw materials. Just 13 per cent have agreed to pay production workers’ wages for more than half of their orders.
And 56 per cent respondents from global fashion businesses have taken measures to manage operating costs: 18 per cent have reduced salaries, 26 per cent reported furloughing or temporarily layed off staff, and 9 per cent have shed some staff permanently.
Next normal in sourcing
Around 76 per cent international sourcing community believes the pandemic will propel speed and flexibility models for the industry, the survey found. Of that three-quarters collective, 52 per cent expect to see a “high acceleration” of flexible product development with shorter lead times and smaller batch sizes. Sixty percent think they’ll see an acceleration of on-demand production.
With coronavirus forcing consumers to reflect on essentials versus excess, many are emphasizing on consuming responsibly from businesses that embrace sustainability. In a separate McKinsey consumer survey conducted recently, more than 20 per cent expressed their desire to curb clothing consumption and spend more on local businesses. Almost 16 per cent European consumers and 13 per cent of their North American counterparts said they’ll be buying more “socially and ecologically sustainable clothing” in their post-pandemic lives.
In the survey with Sourcing Journal, 70 per cent respondents believe the pandemic will fuel closer partnerships between buyers and suppliers, while 60 percent think it will finally push sustainable materials into the mainstream.
After hosting a record breaking 543 exhibitors from 14 countries and regions, along with over 19,000 visitors from 93 countries and regions in 2019, Yarn Expo Autumn will return to Shanghai from September 23-25, 2020. Known within the industry as the leading fair for accessing the promising Chinese and Asian markets, the 2020 autumn edition will provide the perfect platform to help the industry rebound and recover from the worldwide COVID-19 disruption. The fair is expected to occupy 26,000 sqm of exhibition space at the National Exhibition and Convention Center in Shanghai.
When commenting on the upcoming fair and its benefits for the industry, Wendy Wen, Senior General Manager of Messe Frankfurt said: “The coronavirus pandemic has forced the industry to face unprecedented challenges and whilst a full recovery will take time, businesses around the world are already looking ahead to actively seek ways to prompt a market rebound.” She continued: “This autumn’s edition of Yarn Expo is therefore as vital as ever for the industry and its global supply chains. The fair offers a platform to help companies reconnect whilst supplying access to the rebounding market. With its extensive experience and understanding of the industry, Yarn Expo is in a strong position to support the overall recovery of the yarn and fibre sector.”
Yarn Expo Autumn has always provided fairgoers with a comprehensive outlook on the market themes and this year will be no exception. Trending eco-friendly and innovative products will be showcased amongst a diverse range of high-quality yarns and fibers, all under one roof.
By exhibiting at the show, companies position themselves in the heart of the ever-growing Chinese and Asian markets. Donatas Čerkevičius, Commercial Director of Naturalus Pluostas, Lithuania said: “Yarn Expo is the best place to meet professionals from spinning mills, trade buyers and even designers who come here to see trending textures and colors.”
Along with efficiency, buyers also appreciate the high quality level of products available and rely on the fair as a source to access the newest industry trends and technologies. Recognising the quality and quantity of Yarn Expo Autumn after attending the fair for the last six years, Rajiv Srivastava, Manager, Neman Brothers & Assoc, the US observed: “Suppliers display all kinds of products and are always keeping up with industry trends. This show is way beyond a sourcing channel – it’s more like a stage for high-quality products and innovative concepts. It gathers everybody in one place which is effective.”
The extensive fringe programme and dedicated product zones will enrich the experience for fairgoers. Market trends and information will be shared in forums such as the China Fibre Fashion Trends and seminar which will dive deep into the Chinese market. Meanwhile, the Fancy Yarn Vision zone will return amongst others, following its popularity in the previous edition. The area will gather creative fancy yarn and downstream application products to display the latest innovations from fancy yarn exhibitors.
Yarn Expo Autumn 2020 will be held concurrently with Intertextile Shanghai Apparel Fabrics – Autumn Edition, PH Value and CHIC, providing a concentrated overview of the latest trends and developments in the sector, all in one place. Yarn Expo is organised by Messe Frankfurt (HK) Ltd and the Sub-Council of Textile Industry, CCPIT.
Data from UK-based Columbus Consulting reveals, 64 per cent shoppers in the country are ready to purchase new fashion items within a month of the coronavirus lockdown’s end, with another 24 per cent expressing interest in buying within the following three months.
While 70 per cent shoppers admitted to tightening their purse strings amid the virus’ economic disruption, Columbus Consulting partner Charlotte Kula-Przezwanski was quite surprised to find that more than three-fifths of shoppers were already contemplating their next shopping excursion.
Despite being confined to their homes in the near-term, shoppers are likely getting antsy about returning to some semblance of their normal lives, she said. UK’s high street retailers and others have undoubtedly suffered, she admitted, pointing to popular department store Debenhams, which officially filed for administration, equivalent to bankruptcy, in early April. Nearly one-quarter of surveyed shoppers said they wouldn’t purchase any fashion items while the pandemic rages on, and about half said they might—but the purchases will be few and far between.
More than 70 percent of all consumers admitted to increased purchases via e-commerce channels, while 29 percent copped to significantly upping their online shopping game since the lockdown began.
Kula-Przezwanski touted sites like Boohoo, Missguided and PrettyLittleThing as winners with Gen Z and millennial shoppers ages 14-30. Brands are also bombarding young shoppers—who are glued to their mobile devices—with unbeatable deals.
With consumers relegated to their living rooms and home offices, comfortable, casual picks have resonated best, Kula-Przezwanski said. One-third of shoppers said casual wear would be their most likely purchase, while 19 per cent said active wear was their shopping priority.
Consumers are also placing a much larger emphasis on quality than they did before the crisis, with 80 percent of shoppers saying the global health event has prompted them to consider and appreciate their purchases more than they did in the past.
The South African fashion industry is evolving to meet the needs of those living under lockdown conditions by initiating the production of masks. For instance, Milliner Crystal Birch is producing a range of fabric face masks, as well as protective shield visors with transparent panels which cover the eyes, nose and mouth. Similarly, Sandy Rogers, a designer in Johannesburg’s Victoria Yards, is making face masks on behalf of Goodbye Malaria, which is donating them to the Solidarity Fund and to Nando’s, to protect its employees.
Polo South Africa recently pledged to provide 250,000 face masks which are being provided to at-risk commuters and essential-service providers. Polo is using its shirt factory in Atlantis, Cape Town, to generate these cotton masks. Like the others, they are not medical grade but they are washable and reusable and can help prevent people spreading infection and from touching their noses and mouths in the course of travel.
Indie brands The Watermelon Social Club and Klipa Denim are producing face masks for employees, customers and, hopefully, for hospital staff in the future. ERRE Fashion, a local luxe favourite, is making a range of masks, as well as producing scrubs for nurses in a collaborative venture with designers Isabel de Villiers and Jacques Bam.
Ludhiana Spinners Association (LSA), which wants to resume production of yarn, is now demanding that the anti- dumping duty on the import of acrylic fiber should be withdrawn with immediate effect.
Acrylic fiber is the basic raw material for making value added products like sweaters, shawls, etc. and continuation of the duty on this fiber will be double whammy for us, particularly in the times of this pandemic. Millions of units of spinning, textile and garment sector are of the view that in a recent petition filed for review of the anti-dumping duty the decision taken will be made purely on merit basis and duty will be totally waived.
However, three big wigs of the acrylic fiber industry for protecting their profits are putting lakhs of jobs and thousands of micro, small and medium enterprises (MSME) at stake and lobbying for continuation of the anti-dumping duty on the acrylic fibre. These three players wish to control the market by putting other spinners and hosiery industry at a disadvantage. It’s a matter of survival for these millions of units. Combined together, these fiber producers employ about 6,000 persons versus 45,000-50,000 employed by 50-60 spinning factories of Ludhiana on which the knitwears industry is fully dependant. Besides, nearly 10 lakh persons are employed by the knitwear industry.
Ravindra Verma of Northern India Textile Mills Association (NITMA) also requested the government to provide a level playing field to the spinners and knitwear manufacturers in Ludhiana as users of this raw material have always been at the receiving end of these unwarranted duties, whereas the few Indian producers of acrylic fibres are enjoying a very strong financial situation.
In an interaction with members of Merchants' Chamber of Commerce and Industry through a webinar, Union textiles minister Smriti Irani urged the industry to reorient itself and not depend financial packages from the government as its finances are already under strain due to coronavirus pandemic. Irani cited the example of JCT group in Punjab which had sought support to ferry the samples of PPEs to a laboratory in Aurangabad for testing during the lockdown and the government had helped the firm for this.
She told members of the city-based industry body that the government’s job is making policy and provide support and it has been doing its best to support all. The Reserve Bank of India has already given relaxations and banks are supporting businesses to tide over the crisis.
Irani said the textiles ministry is in discussion with the West Bengal government to work out a plan to help the jute industry. Farmers need 4,500 million tonne of certified jute seeds to improve quality of the golden fiber, and only a part of this is available now.
Milan has opted for digital streaming of its fashion week scheduled from July 14-17, 2020. Dubbed ‘Milano Digital Fashion Week,’ the event will showcase Spring/Summer 2021 menswear collections alongside both men’s and women’s Spring 2021 pre-collections.
Milan-based organisation Camera Nazionale della Moda Italiana (CNMI), will set up a digital platform for streaming, accessible through its website – www.cameramoda.it, as well as popular social media channels including Instagram, Facebook, LinkedIn, Weibo and YouTube.
The platform will provide photographic and video content, interviews and backstage peaks to creative moments and alternative and unique viewpoints, all organised in a calendar with slots for each brand, the aim being to create a rich and varied palimpsest of use to all operators in the industry.
Alongside the Milano Digital Fashion Week’s showcases, one section of the platform will be dedicated solely to CNMI-accredited showrooms, which will be able to present their brands via photos and videos, with the objective of supporting Italian businesses through this first post-COVID-19 campaign.
Milan is the next city after London and Paris to have announced a digital fashion week amidst the global coronavirus crisis. On 21 April, the British Fashion Council declared a digital presentation of both its men’s and womenswear showcases under the London Fashion Week banner, through a single genderless digital platform.
E-commerce portal LovetheSales, which allows consumers to shop all sales in one place says, the demand for luxury fashion has shot back up in the past fortnight, with searches for luxury brands up 27 per cent year-on-year. While celebrity fashion choices have been less relevant, one key influencer is continuing to make an impact. The Duchess of Cambridge —whose Boden Aurora midi wrap dress, worn in the second part of the interview, drove searches for Boden dresses up 98 per cent in the last week on the LovetheSales marketplace.
Other trends embraced by the famous have also moved away from the Instagram-fuelled excess of full-on celebrity culture to a more community-focused direction. Views for rainbow fashion wear, for instance, skyrocketed 566 per cent in April, compared to a year ago.
Demand for fashionable face masks increased by 285 per cent, month-on-month. In fact Lyst report had suggested, the Off-White mask was the most searched item for fashion masks online and is currently sold out. Other brands seeing high demand for fashionable face masks include US label Rag & Bone. The brand recently released a mask, which is also now sold out, with part of the profits going to Covid-19 charities. Boohoo’s masks have also seen a 218% surge in page views in the past fortnight.
Another clear trend has been big demand for activewear whose demand has shot up by 141 per cent. The demand for loungewear also rose by 433 per cent. Under Armour and New balance are the brands of choice for runners, with demand for them up by 65 per cent and 60 per cent year-on-year. Cycling clothing brand Castelli has seen the biggest jump in search with demand up by 98 per cent this month.
A report by Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB), the ongoing COVID 19 pandemic led to 77.94 per cent decline in exports of leather products and footwear in the country. As per the Export Promotion Bureau stats overall export earnings from leather products and leather footwear declined by 6.59 per cent, 21.72 per cent and 79.30 per cent during February, March, and April respectively.
Over four months from January to April, export earnings from leather products and leather footwear declined by 19.26 per cent to $200.43 million in 2020. Exports of leather footwear declined by 22.10 per cent to $128.82 million while those of leather products declined by 15.59 per cent to $82.87 million.
Comparing April alone, overall export earnings from leather products and leather footwear in April 2020 dipped by 79.70 per cent over April 2019. Leather products fell by 82.47 per cent whereas leather footwear fell by 77.94 per cent.
This unprecedented export fall is due to most retailers, chain stores and shops remaining closed in major export markets as in EU countries: Germany, Italy, France, and etc.; the US and Japan. In these markets, demand for footwear and leather goods has almost dwindled to zero. Reportedly, sales for this year's spring season are as much as 70 per cent lower than last year.
