Fashion to Rally After COVID-19 but Must Make Changes, Report Says
PreciseTarget, a data-science and machine-learning market-research company headquartered in Bethesda, Md., recently released a forecast that predicted a recovery pathway for the fashion industry after the COVID-19 pandemic. However, the study also forecasted that the pandemic would force the fashion business to make big changes.
PreciseTarget was founded by Rob McGovern, the entrepreneur who also founded the employment website CareerBuilder. For the PreciseTarget forecast, McGovern and his team gathered historical commerce statistics from the Federal Reserve Bank to develop a data-driven analysis of recessions over the past 20 years such as the Dot-com crash of 2001 and the Great Recession of 2008. He made forecasts for the next few fiscal quarters.
“Based on the data we analyzed from previous recessions, we believe that the soft-goods retail market will experience a faster return to pre-COVID-19 sales figures than other sectors,” McGovern said. Sales for apparel and soft goods experienced rallies after the two preceding recessions of the 21st century, he said. He forecasted apparel to make another rally after the current recession. However, he expected a big and, mostly likely, permanent shift to online buying and digital commerce after the current recession.
The forecast predicted a big wave of closures for bricks-and-mortar stores, perhaps a 30 percent to 50 percent reduction in physical storefronts in the U.S. Brands that make it through the current downturn will increasingly rely on direct-to-consumer retail. Many brands will make perhaps 40 percent of their revenue from DTC commerce.
To reach consumers, data skills will be as crucial as merchandising. Staffs of apparel retailers and brands will be stocked as much with data scientists as they are with merchandisers. One of PreciseTarget’s missions is to provide retailers with a guide to using big data to help them inform their businesses.
PreciseTarget bases its market research on more than 5 billion retailer-provided SKU-level transactions along with daily assortment updates from major brands and retailers.
PreciseTarget’s forecast also predicted that retailers would make major promotions to clear inventory. “2020 will set new records for discounting,” the report noted. “There’s an epic glut of inventory that must be cleared. There are exacerbating factors like store closures, diminished demand for professional attire due to sheltering at home and consumer uncertainty.”