2020 has taught us many things – we have seen the rise of comfort-first clothing, learnt the importance of merging physical with the digital, the magic of upcycling and the need for correct pricing. Brands and retailers have used this period to course correct and strengthen their focus on DTC and omnichannel, and also identified new and more personal ways to connect with their consumers.
COVID-19 brought life and business as we knew it, to a standstill. As restrictions ease and vaccine campaigns roll out painting a picture of a brighter future, one thing is for certain that the fashion industry cannot return to its pre-pandemic processes and levels of mass production. We discuss some of the challenges brands and MBOs faced during the pandemic, the problem of excess stock, key growth drivers and what they’ve had to tweak in order to address the customer’s evolving needs.
DEALING WITH THE PANDEMIC
“COVID-19 taught us that no matter how well you are planned, you have to be prepared for contingency. This meant the team had to think on the spot, work with whatever is available and come up with solutions that would suit the customer as well as the brand. As a company, we focused on training our employees on how to deal with a crisis and how to respond to the worst case scenario in the least amount of time. All that is helping us this year to overcome the worst and keep moving forward,” Shweta Kapur, Creative Director of 431-88, told Apparel Resources (AR) in an exclusive interview.
2020 started on a positive note for Shruti Sancheti, Founder of label Shruti Sancheti and Pinnacle by Shruti Sancheti, and things were looking up for the brand with huge plans of diversification in the pipeline. Faced with the adversity of sitting over a new experimental collection, pending international Spring/Summer deliveries and domestic orders, and three standalone stores, the label faced an extremely vulnerable situation for which no one could provide any solution.
Shruti acted fast for damage control and slowly embraced the new WFH and Zoom lifestyle, simultaneously making masks for a charitable initiative by FDCI. The brand opened in a limited capacity last June, totally clueless about what the future would bring. Like majority of labels in the country, Shruti too had paid 3 months salaries (albeit half) to their team during lockdown and as a conscious decision, didn’t lay off anyone. The challenge lay in figuring out how to go about sustaining business in an unpredictable scenario.
“The day we opened, a bridegroom came to the store and placed a sizeable order,” Shruti said adding, “All his previously placed orders with other designers were cancelled and he wanted half a dozen elaborate outfits in 2 weeks.” The entrepreneurial womenswear designer grabbed the opportunity which in turn opened a whole new genre of menswear for the label.
“We took extra steps to customise and cater to the cautious customer and worked extremely hard in terms of designing precise CADs and samples for international buyers to procure orders,” Shruti highlighted.
Sustaining a business and yet being ethical, emerged as a huge challenge for brands such as Bloni. So Akshat Bansal, Founder of Bloni, made the wise decision of moving the atelier to his hometown in Hisar, Haryana for a safer, united, all in-house environment with food and shelter for all employees to reduce the risk of COVID-19.
On the fashion buyers’ front, owing to the nature of their business, MBOs enjoyed a very strong e-commerce platform even prior to COVID-19, which in turn helped them get through the period. “Post April, we saw year-on-year growth at Azafashions.com. At the stores, we introduced video conferencing and home appointments, so customers could get the convenience of shopping at the stores from the comfort of their home,” Devangi Parekh, Creative Director, Aza Fashions told AR.
She went on to add, “We onboarded a wide range of new designers online to help them drive sales digitally and worked with designers on an overall strategy to help liquidate their stock. We also introduced lower price points online and expanded the catalogue available to customers across all categories and age groups, including womenswear, menswear, kidswear, jewellery, accessories and home décor.”
Dubai-based MBO Vesimi also did a lot of door-to-door service, video calls and zoom calls to show outfits to its customers who couldn’t visit the store.
Commenting on the same, Atinirmal Pagarani, Founder and Curator at Vesimi, told AR, “Initially, there was a standstill in Dubai but by the grace of God, the store belongs to us and we don’t have to pay a rent, so that literally saved us. Our staff was very supportive, and themselves suggested solutions for cost-cutting and everything fell in place.”
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THE ‘ONLINE’ CONSUMER
The shift from physical to digital has been in the pipeline for quite some time now but last year just accelerated that shift at all levels for all industries. Keeping in mind the same, designers and brands entered the e-commerce world and revamped their websites and social handles keeping in mind the ease and convenience for customers.
“People who were previously unsure about shopping online have transitioned quickly, and now expect a seamless omnichannel experience. Comfort and convenience are definitely factors that customers look for when shopping. We’ve observed a renewed preference for local Indian brands with a story to tell. Going forward, brands will have to find a way to blend content, commerce and creativity. Organisation, scale and integration of technology will be key to success,” Devangi stated. The MBO is currently in the process of launching an Aza mobile app to further ease shopping for consumers.
Amidst stringent lockdown measures and shuttering of stores, brands were forced to adopt digital strategies in order to tap customers. According to Bain & Co., digital penetration from brands went from 12 per cent in 2019 to a staggering 23 per cent in 2020.
Sensing the pulse of the market, brands like Bloni were quick to launch a stronger e-commerce website to bounce back balance in finances. For the brand to accelerate digital viewing, Bloni did two digital shows with FDCI and LFW, thereby entering the new digital era of fashion.
THE PROBLEM OF EXCESS STOCK AND DISCOUNTING STRATEGIES
In Bloni’s case, Akshat was preparing for a Grand Finale showcase at Blenders Pride Fashion Tour and FDCI’s Autumn/Winter 2020 presentation, but as life would have it, it turned out to be extremely unfortunate to create two massive collections and not be able to showcase any. “This setback led to approximately 300 new samples rendered meaningless due to COVID-19. All the stock produced for our flagship store for 2020 is still racked up waiting to get sold,” Akshat revealed.
Left with many undelivered domestic and international orders, and excess fabric meant for domestic orders and existing stock, fashion businesses were hit hard with no courier services and strict lockdowns. At a time like this, all one could do was plan.
“Using that period to sort our digital platform, we started operations in June and contacted our European buyers. We offered them our Spring/Summer collection at subsidised rates and managed to get few orders,” Shruti revealed, adding, “The way to tap the domestic market was by offering fabulous discounts and offers. We also gave design solutions, offered customisation, over-Zoom designing and made complementary masks on each order to get the business back on track.”
Then again, we have unconventional designers such as Shweta Kapur. As a design company, 431-88 has always focused on making seasonless products that are not trend based. For this reason, the brand never goes on sale, so their approach towards the discounting trend and excess stock has been quite different.
“Since last year we have been keeping a very close watch on the stock to sale ration and have been producing our collections accordingly,” Shweta explained, adding, “Most of our orders are taken on an advance payment and the extra stock produced is a data driven list of products that we are confident of selling in the near future. For this reason, we don’t have excess stock. As we grow into the business, we are looking at slowly shifting towards a model where we only produce what we have an order for but that shift will take a little time.”
On the fashion buyers’ front, as part of their business model, Aza doesn’t keep a lot of excess outright inventory. However, the unsold stock does get liquidated during the sales they host both in-store and online, and the MBO works very closely with designers to offer deals and value adds to clients to help drive sales.
In Dubai, Vesimi requested designers to revise their prices. “We marked down clothing to as much as 80-90 per cent off for a few designers because the designers themselves were telling us to not send any stock back to them as they had excess stock to deal with at their own end,” Atinirmal stated.
Vesimi’s sale went on for months on end, with at least one or two racks always on sale at any given time – these are mainly pieces from earlier seasons that still sell because Indian fashion is not something that quickly goes out of trend. Many styles are classics, so they sell throughout.
PANDEMIC BESTSELLERS AND DEALBREAKERS
As a result of salaries being cut to almost half, and many people losing their jobs altogether, less frequent and more intimate gatherings, customers became more value conscious.
Well-priced items and labels offering a unique selling proposition continued to do well. Comfort-first, easy, airy, timeless and seasonless pieces flew off the shelves, whilst dark colours, form fitting silhouettes and partywear were slow to move.
“Classic and timeless styles such as straight kurta sets and anarkalis saw a big resurgence right after lockdown. Also, discounted styles moved very well over the last year,” Devangi stated.
According to Shweta Kapur, “The second wave of COVID-19 has devastated the country and I don’t think we will be ready to step out and socialise as freely as last year. Being homebound for the near future, smart comfort dressing will still be a key trend and with more and more people thinking of health and exercising, I predict that cleaner, leaner silhouettes would take preference over oversized ones.”
At 431-88, shirts and kurta sets emerged as new categories that reflected a steep jump in the sale curve. Saris have always been a strong category for the label, but with more people having to stay home, comfort dressing that does not come across as shabby, has taken preference for the Indian consumer.
“What really didn’t move were runway looks from the main collection as events were less, and in our case, occasion wear featuring elaborate ruffle organza and fragile, since they don’t have a repeat value,” Shweta said.
Similarly, for Shruti Sancheti, the world has changed and fashion has new terminologies like WFH, Zoom meeting and quarantine party looks. Also there is tremendous sense of accountability and introspection and the post-Covid consumer will favour clothes which are timeless and versatile. Easy, breezy silhouettes that are season-fluid, surface ornamentation and colours which are relevant eternally will be indulged. Value for money, sustainability and classic pieces will be the choice for most.
MARKET SCENARIO AND CONSUMER SENTIMENT
The pandemic coupled with the digital age, has made consumers more price-aware than ever, giving them the ability to compare prices be it online or offline. Getting the pricing wrong on a product can risk an entire line ending up in the sales section. External factors like fast fashion brands constantly dropping new trends and slashing prices, adds to this further. Therefore, identifying and pegging the correct price for a product has become more critically important.
Devangi quotes that the proportion of discounted products as a percent of all sales has increased post-Covid, especially online. However, many designers have also introduced collections which are reasonably priced, which do not need to be discounted in order to sell. “Customers are essentially looking for value, and if a product is inherently well-priced for the look it offers, then it does sell. We have also seen a lot of wedding outfits sell at full price, because a bride who wants to wear something still wants to wear that regardless of the number of people attending the wedding,” Devangi elucidated.
The market started to show signs of picking up well in January but the consumer today is economically and psychologically fatigued and considers many factors before making the final purchase. Having said that, well-priced collections and labels that offer a unique selling proposition are performing well.
“Customers are willing to pay full price for a product if they love the product. But if the product crosses a particular price point then they are dancing on our heads for a discount,” Atinirmal said, adding, “Customers today know that in general, events are not happening, so they haggle a lot and when they haggle with us, we have no option but to haggle with the designer. 70 to 80 per cent of designers get convinced because they know a sale is being closed and some money is better than no money – it’s a battle we are still fighting on a daily basis but full price is happening. The sale is also on- it’s case by case, I cannot say which is more but yes, discounts are definitely on.”
Commenting on the same, Shweta said, “Customers now understand that even though you are paying a higher price for designerwear, your cost per wear is way cheaper than what you would buy from the high street. They also understand and support the needs of small homegrown businesses and want to invest in something which is well designed, comes from a source which is ethical in practice and supports the Indian textile industry.”
On a whole, consumer sentiment remains positive with signs of improvement as lockdowns lift and restrictions ease. Validating the same, Akshat said, “Consumers are buying what they really relate to, I don’t think it’s a matter of full or discount prices, consumers who like designer wear don’t really have the money crunch, they just don’t have places to go wearing new designer clothes. This shall pass and we will bounce back.”
UPCYCLING AND RECYCLING
The pandemic has made consumers re-evaluate their relationship with clothes. Lockdowns met with a surge of DIY tutorials on TikTok, educating consumers on upcycling or repairing goods, as well as giving old clothes a new life through crafting, thereby increasing the product’s lifespan. Today, 65 per cent of consumers plan to purchase more long-lasting, high-quality goods. This will lead to a demand for timeless, investment pieces that will retain value over time and can eventually be resold.
With two brands sitting on four collections by the time the restrictions eased, Pinnacle by Shruti Sancheti was stuck with a huge surplus of fabric which never went into production.
But because the label’s design sensibility in each collection is an extension of their thought process, Shruti upcycled old fabrics by incorporating block printing and innovative dyeing processes and created looks to embrace the new lifestyle. “We used patches of various prints and made reversible, versatile garments which could be used in multiple ways. The idea was to use what we had and we created hi-fashion garments and accessories from them rather than investing in more fabrics,” Shruti corroborated.
As a brand, Bloni is known for carrying forward its surplus fabrics from their previous collection in order to be sustainable, ethical and ensure project continuity to keep the brand narrative intact. So the pandemic was no different, wherein the brand continued to upcycle unsold pieces and show samples to sell as archives and one-of pieces.
According to Atinirmal Pagarani, “I don’t know if I should say that the customers have evolved, but I would rather say that the customers are confused. The most regular and some of my biggest buyers are also confused during this time. Because for them retail is a therapy and it’s also a need. It’s also, ‘do I need this new piece?’ and ‘how can I use my older garments?’ The market has evolved in the sense that it is getting simpler, outfits are getting lighter, price points are lesser and bills are smaller.”
Vesimi has a tailoring division which saw many people bring in their old outfits asking them to upcycle their garments because they wanted to repeat it. Since salaries were cut over 60 per cent, they didn’t want to spend too much on new outfits. For this service, the MBO had a tailoring charge for the expertise of their in-house designers put into play and labour charges for the tailors.
At 431-88 as well, Shweta and her team have been utilising all fabric waste to make bags for storing their garments. Through this, the brand aims to reduce their dependency on plastic.
IMPACT OF THE WEDDING SEASON
The Indian fashion industry is majorly driven by the wedding season, related events and festive occasions, and it came as a blessing in disguise for the industry. Even though gatherings were limited and budgets were cut to half, wedding wardrobes emerged as a key aggregator for retail.
For Aza Fashions, both Diwali and the wedding season helped drive sales online and offline. “We saw a big uptick before Diwali, and after that sales continued to grow as events and social gatherings in many cities started taking place. Because wedding dates have been spread across the year this time, sales haven’t been confined to the usual ‘season time’. This year, we have a lot of weddings in summer as well, which used to experience a summer/ holiday slump in earlier years,” Devangi explained.
She then further explained, “Wedding lehengas continue to do well with us at Aza despite the current situation. While attendance at celebrations has reduced significantly, the bride, groom and their families still buy what they always wanted to wear, because at the end of the day, this is a special celebration they’ve dreamt about for years.
In Dubai, the wedding season observed a slump with many customers reaching out to Vesimi, informing them of their engagement, or their roka, but they are not planning anything because of the pandemic.
“It’s just a small dinner in the house or a dinner at a restaurant, so that has affected sales quite a bit,” Atinirmal explained, adding, “Customers want to do a trousseau but they wonder where they’re going to wear it after the wedding, as events are still not happening. So rather than buying those 11/20/30 outfits, they are buying one or two with an ideology that whenever they need more, they will come back to shop – it is all need-based now. The market is getting better – my March turnover is better than my February turnover, my February turnover was better than my January turnover and my January turnover was better than my December turnover, so in that way we are scaling positively.”
For Vesimi, pre-bridal actually became bridal because the brides were not going for heavy outfits since the functions were much smaller. At the same time, there were brides who didn’t care even if there were 10 people attending the wedding – they wanted to go all out on their special day. “The men especially in this region, do not bother too much about kurtas or experimenting with fashion as in the case of Indian men, so they literally went back to wearing shirts and trousers,” Atinirmal highlighted.
On the designer’s front, Shweta validated the same, “Weddings in India are recession-proof. It is fortunate or unfortunate depending on which lens you view this from, but the year so far and 2020 have been no different. Weddings and the festive season helped us cover up a lot of losses that had trickled over from the lockdown months,” Shweta affirmed.
The season proved to be a boon for Shruti as well. “Weddings were undoubtedly our cash cow in 2020. We as a brand, did contemporary Indian wear and offered looks that would work for the restrained bride or the family members,” Shruti stated adding, “We did loads of weddings which were incidentally smaller but had multiple functions and discovered a new genre of menswear, wedding-related accessories and more.”
While post-pandemic effects continue to have some impact, the biggest game changer in this market has been the evolving consumer. The fashion industry has been very product focused rather than consumer focused, so the real opportunity at a time like this is to be consumer-centric and then tap into specific areas of your business to understand how to best serve your customer. Managing stock, finding new ways to engage and understand your consumer and nailing price with demand is what is going to guarantee sales in the coming time.