A slow reopening of stores and companies has just started like, for instance, in Austria and Germany. In Italy manufacturing companies reopened on May 4 and stores will follow on May 18. Despite this, most of the multibrand stores are not sure they will be able to register a rapid turnover.
We asked market insiders how they will face the upcoming weeks’ and months’ challenge, how they will handle consumers’ generally lowered interest for fashion (and their smaller budgets) while dealing with stocks of unsold products and the postponing of trade shows.
What budgets, order rhythms and trade shows will be key in the future?
When considering how much budget retailers could place is another key aspect thinking that the present season is being spent with closed doors. For Edoardo Giaroli of sportswear label Letasca, budgets will be reduced though buyers won’t stop buying. “They will buy according to a different approach and sensibility, being more aware about product quality and brand values.”
Matteo Tugliani of sneaker label Moaconcept thinks that retailers might spend half of what they spent for 2020 and will keep an extra budget for ready-to-deliver collections to better manage the cash flow of their stores. For Enzo Fusco, FGF Industries, budgets will be small, although retailers will continue to do their best to encourage their clients to purchase again despite the difficult times.
Some retailers also want to be careful when it comes to placing orders: “Diligent retailers that have been monitoring the markets and taking bold actions, for sure have done some cuts on the Open To Buy. Depending on how brands will perform with the re-opening of the marketplace, there will be always an opportunity to reevaluate the in-season management of the stock and seek for that right product that will be on-trend and short in units,” explains David Pujolar Segura from AW Lab.
Can new order rhythms help?
This particular moment is a first-time situation as every insider is facing it as a live-and-learn time and everyone cannot follow the same standard approach. Many think that cooperation could help supporting this situation, especially because very probably only the fittest, smartest and most influential will survive. “Brands won’t help every retailer with return or discounts. They will choose to save the most strategic for them and their future,” says Tommaso Andorlini of SOTF and Playground. He also thinks all the deliveries will be late of at least two months and considers this as a good opportunity. “It's the occasion to have a new alignment and new timing. F/w 2020-21 will start in September instead of June and will end in late February/March with the start of the seasonal sale in February. Everybody has to keep the focus on avoiding or limiting Black Friday and in-season sales from now on if we want to escape from this black hole. The big players must lead the market in that direction. It's not easy in uncertain days like these, but it would be a pity to waste the occasion.”
Also Superga believes in the importance to keep one’s selling period as long as possible from now on. “Due to the fact that the sales season is considered to be adapted to the actual seasons, the retailer gains six weeks of sales time. This means that the retailer can sell the spring/summer products regularly until about mid-August and only then does the summer sales begin - just as we know it from the past.” And referring to possible changes in selling rhythms adds: “If sales times adapt to the seasons, then suppliers should deliver their products later and the traders take delivery of the merchandise with valuta.”
Fritzi aus Preußen's Björn Nadler rather thinks that the scenario is too uncertain to understand what changes might happen: “We don’t think we will ship our first deliveries for Winter in June or July. As is well known, this crisis originated in China, which, like us, has struggled with the consequences and has had a lockdown. This will clearly push back deliveries. But after some consultation with our retailers this is welcomed. Exactly when we will be able to deliver will become apparent in the coming weeks." Though he also adds: “Most retailers welcome these postponements of delivery and would like to see them become permanent. In the end, this will show how strong the ‘community’ is to initiate such changes in a sustainable way.”
Trade shows: who needs them?
As the overall situation is changing rapidly and shows are postponed or cancelled, some players think that trade shows are not indispensable at this stage. Or, as Björn Nadler from Fritzi aus Preußen believes, shows have to develop alternative ways to present one’s products: “I do not see any need for a trade fair this year. Basically, this decision is currently being made by the state, and as things stand now, such major events will not take place during this period. We have learned in the last weeks to be creative when it comes to information gathering during the time of the contact ban. Maybe we can also develop great ideas for the future–how brands can get in touch with their customers interactively and exchange information about upcoming collections and their joint business.”
On the same wavelength also Nobis thinks this is the right moment for exploring new digital paths. “We feel strongly that B2B trade shows will move in a similar direction as retail, toward a more digital landscape–bridging the buyer to the brand electronically. We have seen this example previously developed by many trade shows offering a ‘digital showroom’ visible to only registered attendees of the show. For example, E-pitti with Pitti Uomo has been doing it since a few seasons. This could be a very valuable tool in the coming months and beyond.”
Pitti Uomo’s Agostino Poletto thinks that shows remain essential: “There will always be novelties and new collections anyway. International appointments where buyers don’t simply come for placing orders but also for exchanging ideas, understanding where do we stand and forecast how the market will evolve are indispensable today more than ever. Moreover in a few weeks we will inaugurate our Pitti Connect platform as we are aware that three days of direct experience during the show can be worth 30 conference-calls, video-presentations and phone calls.”
Despite this, rescheduling is also key these days. Pitti Uomo’s postponing from June to September was accepted much differently. For Enzo Fusco shows are not what entrepreneurs need today: “Although I understand that it is important giving a sign for Italy and Made in Italy, September is too late for promoting sales. Plus companies cannot stand costs apart from the indispensable and immediately useful ones.”
Lorenzo Osti, C.P. Company, has a similar opinion: “A show in September can’t help much apart if the whole industry calendar will be moved ahead of about two-three months and consequently postponing selling season, deliveries and sales. Though all this should be coordinated globally. It might be easier skipping one edition and realign ourselves from next f/w 2020-21.”
On the opposite, Closed’s co-owner and managing director Til Nadler thinks it can be very helpful: “Rescheduling Pitti would definitely help to–especially for everything that comes from Europe–there will be delays in the sampling process. Thus fairs in September could be a realistic timing for presenting the new main collections.”
READ ALSO:
