It’s January 2021! The time to join back office, drink coffee, talk, shop and work a little, after a busy Work From Home isolation!
“It’s also the time to assess the impact of returns.” As the returns happen in Christmas holidays, now is the time to assess the impact. At an average, an estimated two-thirds of giftees return an item received during the holiday season. And it is likewise time for retailers to reassess the demand for next season and analyse the seasons’ repeats, as also the consumers’ mindset.
Sadly, now that most European countries and the US are under partial or self-imposed lockdown, the buying is very slow. Holiday-related purchases from Thanksgiving to Cyber Monday – the busiest period – were down 14 per cent from 2019 in the US, whereas EU as a whole is down by around 8 per cent. The figure would have been much higher, if e-retail had not compensated for a large chunk of the downturn at bricks-and-mortar stores.
Luckily or unluckily, India is not in the race of winterwear, a major category for the holiday season; hence little impact is seen to affect the Indian exporters… Usually they have little work during these times, while few even close shops in these months, to enjoy a vacation.
Now the wait is for March, when some repeats trickle in or sampling happens for the next season till about June. But now with fast fashion an accepted norm, sampling goes on till late August… while the orders start tickling in from September onwards.
The biggest debate today is …What will happen in year 2021?
Answers can be found in how things moved in 2020 and seeing retailers’ sales graphs over the last few months. The year gone by as a whole was a retail disaster and no one can deny that!
Earlier, in August the situation had somewhat improved in the EU encouraging buyers to finally start picking up the already finished goods lying on the shopfloor and also confirm orders for the semi-finished products; some buyers even placed fresh orders.
Almost immediately thereafter around September, the second wave of pandemic hit the European countries, which meant that the buyers now have additional inventory of summer wear!
Now this inventory, as also the cancelled orders are piled up… will these go into incinerators or wastage dumps, highly unlikely… they will in all probability be brought back from the storage dumps or warehouses to the stores, lined up for next summer, which in fact is going to impact the next year’s export orders.
In my last editorial, I said 2021 is not going to be as rosy as we all think, at least for us in fashion apparel… and I can already see the reflection. The biggest hope was holiday sales… but alas! Ever heard of retailers including big giants like Target Corp., Walmart Inc. and Macy’s Inc. being closed on Thanksgiving Day… well it happened in 2020, which led to the most drastic drop in foot traffic.
Though impulse buying or a desire to binge post lockdowns may show a little resurgence but overall, one can expect a bad season for Indian exports, also because our product basket is narrow and fashion-oriented.
The industry needs to be prepared to be different and be smart in its business decision… it is now or never, and for sure wearable is the step forward. Ready for the challenge?