Fashion retailers and coronavirus: Tips for offsetting the loss of in-store trading

Care to share?

The continuing and dynamic situation surrounding coronavirus is a threat to people and the economy. Industry by industry, starting with fashion retail, I will be taking a look at the disruption that is taking place and some of the biggest threats to business. I’ve also collected ideas and inspiration that might help fashion retailers get through this hard period.

Divante presents Click & Collect Accelerator

The lock-down of shopping malls has been the biggest hit so far to retail, and sales have subsequently plunged. We’ve seen numbers showing a drop of -50% in China, -10% in Hong Kong, and -25% in Italy. These will be repeated globally in the coming weeks as countries continue to deal with the crisis and stop people from mingling in large groups. 

The knock-on impact is hugely significant. An estimated 20% of the US workforce, for example, relies upon the retail industry. Losing jobs en masse in any sector could be devastating to the economy.

However, we still believe that eCommerce and the power of community can lessen the negative impact and even help us find new solutions for a better future. Here are some ways in which fashion brands are reacting and adapting to the current situation, some of which may be inspiring and actionable for your own business.

10 tips for fashion retailers to reduce the impact of COVID-19

Information flow

This is step zero. Before you make any changes to your business, think about how you will keep your customers informed to make the most of your initiatives. There is no point investing time, energy, and money in innovations if your customers don’t know about them. Gianluca Girard, Chief of Digital eCommerce at Elixseri AG and creator of the Made FOR Italy initiative to help support Italian business in the crisis, shared how many retailers have failed during the Italian coronavirus outbreak as a result of not being able to clearly communicate with customers.

There is so much content swirling around and a great deal of fake news that confuses customers. Share clearly and often with customers on all your official channels. Utilize things like loyalty programs to connect directly with regular customers and prepare a clear and comprehensive FAQ section on your channels about the crisis and how your business is reacting to it. Let people know that you are open for business and what they can expect. 

Live streaming

Live Video Streaming is a dynamic and interactive way to show products. Additional video or text chat with your sales employees in their home offices is a way of then collecting orders and talking about the upsell. Your employees are the heart and soul of your in-store sales and are much more effective and flexible than automated systems for completing some orders.

Italy’s OTB Group (the parent company of iconic fashion brands Diesel, Maison Margiela, Marni, Viktor&Rolf, and Paula Cademartori, and state-of-the-art companies Staff International and Brave Kid) has embraced live streaming in China.

The leader of this industry is Alibaba. Tmall Fashion is blooming with luxury brands starting to experiment with live streaming. Secoo is another growing company that is realizing the potential of live streaming to boost luxury sales online. Last year they started cooperation with Prada and Versace to name just a few. 


Second-hand luxury

Feiyu is an interesting case study in the same field. They are using live streaming but their focus is on selling second-hand luxury products. 

In future, there is the opportunity for brands to create this kind of second-hand marketplace for their products. It allows them to verify the authenticity of products more easily and take a broker’s cut of resales. This idea utilizes existing client relationships and distributed logistics, and is also very important for the concept of the circular economy. 

Online influencers

Chinese cosmetics company Lin Qingxuan was forced to close 40% of its stores during the outbreak. By moving all beauty advisors from those stores to become online influencers, they achieved 200% growth compared to the previous year. 

Cosmo Lady, which is the largest underwear and lingerie company in China, has shifted its focus to selling on WeChat. They’ve engaged all employees by creating a sales ranking for every single employee, even including the CEO!

More basic products 

Bernstein analyst Luca Solca estimates that sales of luxury goods will be down by 30% inQ2. Michael Kors and Versace holding company stock went down over 40% this week and the majority of other retailers experienced declines of around 30%.

This seems like an inevitable result, as people focus on more basic needs in a time of crisis. This is why, in the US, Walmart and Target stock were performing much better than others. If the virus is followed by a period of recession, we may see some luxury brands launching more affordable clothing lines or making more discount offers to bolster sales in a slow economy. However, there are varying opinions on how people will behave once stores are open again. Some suggest that buyers will flock back to stores, so such sales will not be necessary.

More local products

Production in China has been severely disrupted and that is leading to supply chain issues for fashion brands that have traditionally looked to Asia for sourcing. Brands with a local supply of goods might find that now is a good opportunity to compete and that they have a more sustainable model for the future. It’s a good time to look at ways to work with local producers who will be in need of an injection of business, and is a positive move for local economies and smaller suppliers.

Flash sales

During the 2008 financial crisis, we saw a new business model including flash sales and so-called “sales clubs” thrive. This could happen again in a scramble to shift a lot of unsold merchandise. However, this time around, we may see brands organizing their own sub-brands for doing that. The next Gilt or Rue La La could be owned by a fashion group rather than being a non-corporate initiative. 

Timur Romanov

Direct 2 Consumer (D2C) brands

This is another business that has its origins in the financial crisis. It has since stayed around and become an effective business model that meets the needs of a new generation of customers. Being on-line-only significantly reduces the cost base. D2C brands now also have an enhanced chance of success with platforms such as Social Commerce that allow them to reach out directly to customers. 

Online-only fashion shows

Gucci, Versace, and Prada have recently canceled fashion shows; for others, the show must go on, even if it is only on-line. Designers in Japan have taken to live streaming shows and the Shanghai Fashion Week has announced that it will take place entirely online on the Tmall platform. 

Whilst these events may seem a poor second place to traditional catwalk shows at first glance, Business of Fashion, rather surprisingly, reported that Armani’s live stream of its show in Milan last month saw better engagement than the brand’s conventional runway show in September. It may be the novelty factor but it is clear that there are enough people interested in online events for businesses in all sectors to make use of them at least in the short term.

Virtual try-on 

Social distancing could increase the adoption of AR and VR virtual try-on technologies and virtual showrooms. 

Les Petits Joueurs, an Italian producer of luxury bags and shoes, is launching a full virtual showroom with Augmented Reality (AR) options to try on every product. In just the last few days, they have observed more on-line sales as a result of this innovation. 

You will find more examples of virtual try-ons here >

Nothing is written in stone for retail 

From all these examples, we can predict that the digital side of the retail business will grow at a faster pace than previous projections. As for brick-and-mortar stores, there is no way of telling for sure what the actual situation will be in six months. 

Many traditional retailers such as Gap, Macy’s, Oly Navy and J.Crew were already struggling due to a combination of declining sales, thin margin, and high debts. There is a strong chance that sustained pressure on business due to the coronavirus could lead to some famous brands becoming casualties of the tough times we face. However, others take a more optimistic view of how retail will fare, both now and after restrictions on movement are lifted. 

In an interview with Dezeen, Li Edelkoort, argues that the crisis may bring about a sea change in the way society consumes goods and a shift in our respect for workers. In response, Katarzyna Gola of Geek Goes Chic points out that human history tells us something different. After previous crises, we have seen booms in retail and people have been keen to get out and spend on goods. So, it will be business as usual, but on a greater scale than before!

In essence, we just don’t know for sure how long the current situation will last, which parts of its impact will be negative, and which will foster positive change. We should prepare for the worst but very much hope for the best. However, it is already clear that it is an incredibly hard time for the world, and that traditional retailers are turning online to look for answers to the great challenges they face. eCommerce has proven itself to be robust and is playing a vital, real-time role in the transformation of society. Right now it is the lifeline that retailers are reaching for, and it is answering the call.



  5. Hong Kong Government Statistical Digest of the Services Sector 2019 Edition, Statistica Feb 2020,

Published March 15, 2020