@champion
Will the coronavirus impact the streetwear industry?….This is definitely the major question all retailers, department stores, online stores, and suppliers are asking themselves right now. This is also a question that consumers have as well. The coronavirus hit the whole world unexpectedly which is leaving many fashion designers and the streetwear industry unprepared for the pandemic. With an outbreak so huge for the world both small companies and big businesses alike are living in a scarce moment at this time. This tragedy can go either way for streetwear. It’s tough right now to look on the bright side of things. Some of the industry may learn how to maneuver in distress and others can sink like a ship. Who will thrive or remain steady during this time; and who will be putting the nail in the coffin for their business?
Severity of the Coronavirus (COVID-19) Pandemic
Many states and countries around the world right now are under restriction, being told to stay inside as an order by their state governors. Many department stores are closed right now until further notice. Many people are under a lot of anxiety forcing them into a fight or flight mode, where survival and staying healthy is top priority. Due to this virus some people are not focused right now on shopping for clothes or spending unnecessary money where they don’t need to. This indicates that there is a huge consumer behavioral shift. There has been reports on the virus hitting many different ages, this just proves that it doesn’t discriminate for who can be attacked. The severity of COVID-19 can be seen as very serious to some and not so important to others. Taking all of this into account brings us to what that means for the streetwear industry. Let’s break it on down.
Impact on Supply Chain
The coronavirus originated in China and a huge amount of clothing manufacturers are based there. It is most likely that there will be an impact on the fashion supply chain as factories shut down and production slows. China is a major source for fabrics and produces everything from coats to swimsuits for fashion brands internationally known. Retailers who follow a traditional two-season model with long lead times are fortunate that most stock for spring and summer will already have been sent out before the virus hit. These items will be en route to distribution centers. But some retail buyers who purchased pieces from their collections are canceling or cutting orders to eliminate expenses and to avoid holding inventory they can’t sell at this time. Any delayed delivery will further harm the discounting spiral that many are currently caught in. Delays will mean clothes arrive too late for the intended season and will then need to be marked down to sell. As a consumer you may not want your items that you bought to arrive later than normal which can result in people not wanting to shop at all.
With continued uncertainty around the COVID-19 and no signs of the spread slowing down, it seems highly likely that Chinese and other imported factories will be remaining closed for now. This will start to impact stock availability internationally. Some retailers are more immune to the effects of the coronavirus as they have a more diverse supply base. Companies like H&M and Zara who have a diverse supply base located in other locations around the world can withstand during this time. Their ability to shift volumes from one supplier to another will provide some protection against the disruption in China. To speak in the short term, all physical fashion retail, including streetwear, will take a hit.
Consumer Behavior Changes
Reports say that people who have been purchasing subscriptions or rental service are pausing their memberships because people are working from home. This basically is saying that they don’t need to rent anything. Services are pausing for fashion and for brands who operate a department store. Business owners are dealing with paying expensive leases on spaces that can no longer generate sales because they are closed.
With that being said there are people out there that are doing the opposite. People deal with stress and anxiety in different ways. Retail therapy is as real as comfort eating, binge drinking, or over exercising. There are people right now buying non-essentials online. For some, splurging on a non-essential purchase provides a much-needed break from the stress and anxiety they feel. While unnecessary purchases might not be the most important thing, they still play a role in many people’s lives. While the majority of streetwear clothing sales are declining, there is some traction of sales amidst the coronavirus pandemic.
Streetwear CEOs Speak on the Coronavirus Pandemic
In a recent interview Bobby Hundreds, the co-founder of the streetwear brand ‘The Hundreds’ says, “A lot of brands don’t have the cash reserves to sustain this. We’ve had to have conversations about the future whether that’s having layoffs, filing for bankruptcy, and how we can come back from this if it goes on longer than expected.” He then went on to explain that The Hundreds canceled its annual warehouse sale. This sale was supposed to take place on the weekend of March 21, 2020. He also closed the Los Angeles store location on the weekend of March 14, in hopes to signal the importance of social distancing to its Fairfax neighbors. Bobby took action in a way to keep money coming in for the company by not enduring much loss by hosting an online sale.
Impact on Online Stores and E-Commerce
Online stores and e-commerce sites seemed to have the biggest beneficiaries for this coronavirus streetwear epidemic. Businesses that ship goods and services directly to people and their warehouses or distribution centers are considered essential and allowed to remain open. Fox News recently reported that there is no evidence right now that COVID-19 can be spread through mail. This is good to know but the downside is places like Amazon have been overwhelmed with the amount of orders coming in, resulting in longer wait times for products to reach homes. To fix this issue Amazon recently said they are “hiring 100,000 warehouse workers and raising pay as the coronavirus causes an ‘unprecedented’ increase in demand for this time of year.” New York City is also under a take shelter order, but similar to Los Angeles, warehouses and shipping distribution centers are considered essential and therefore still open. Some e-commerce sites have recently shut down due to the coronavirus impact on streetwear. Some stayed busy earlier into the pandemic and were still shipping products, but now are looking into alternatives to keep their team safe and healthy.
How Do Streetwear Brands Stay Relevant and Operate During This Time?
Well, it seems like social selling is a better idea than push marketing for the time being. Getting creative on social media is likely the best way for brands to stay engaged with their communities and potentially generate sales. But there is also a downside to this if the approach is too eager or insensitive to the public. There has been a lot of talk that when people and companies start capitalizing on an opportunity like this, for the at-home shopper, it screams opportunism and can come off very wrong. Social media is a platform that can be used as a place where people and designers can be more personal.
The norm is for customers to step into the shoes of their favorite streetwear brand. But if the brand now did the opposite, stepping into the shoes of the public, this can be seen as empathic and kind right now. A meaningful, personal message can lift spirits as well. Corporate talk may not be a good look right now because it almost always comes off as marketing. Right now is about understanding the customer mind-set. Note that when people have anxiety they are also uncomfortable which doesn’t give them confidence to purchase. During this time there are still fashion designers who are working from home. They feel like they still need to keep their hands busy in the business. They are using their phones and laptops with apps like FaceTime and WhatsApp to stay connected with their team members on the subject of work. We live in such a digital world, but people in this industry are really learning to be more digital than ever before.
Some designers have expressed that they are finding new ways to keep their business afloat. Many came into a problem of not being able to have a fitting with models to make sure clothes fit properly. To counter attack this issue they are sending garments to fit models or some people from the team try things on and test the fit. The time for creativity is really being tested. Thinking outside the box from how things were once operated before the coronavirus impact on streetwear is vital to surviving. Many streetwear brands can take this slowed time to reinvent where they may feel the need to. Streetwear brands have to still keep up with their competitors. They have to think of what they could be doing behind closed doors. Many competitors can be making changes and retreating from the market to create new windows of opportunities after the madness is over. Playing this time like a game of chess and being strategic is important. Being flexible, agile, and learning how to navigate can really make or break our favorite streetwear brands.
Brands Helping Out
@newbalance
New Balance just recently announced on March 27, 2020 that the streetwear brand is taking action to manufacture and ship out facial masks to hospitals around the world. On their website the brand goes into detail saying, “The global COVID-19 health crisis has called on individuals and organizations to bring their expertise and resources to solve new and extraordinary challenges. New Balance has engaged its skilled and innovative U.S. manufacturing workforce to develop face masks to address the significant demand for these supplies. We are producing prototypes for face masks in our Lawrence, MA manufacturing facility and hope to scale production using our other New England factories soon. We are coordinating our efforts with government officials and local medical institutions as well other U.S. consortiums and testing facilities.” Companies like Nike and Patagonia have also took drastic measures to help out during the coronavirus outbreak.
Ending Thoughts
Fashion is now at a restart moment, and the system is like never before. No one really knows what’s happening or going to happen. Everything in the media up until now has been imperfect information and being re-questioned. Looking out into the distance and thinking long term for streetwear companies that were in danger before, could really be damaged after its all said and done. If the economy hits a recession on the other side of this, which parts of the industry are likely to suffer the most? Will the coronavirus impact on streetwear ever get back to what it once was? The answers to these questions are to be determined, and we will all be waiting patiently to see the outcome.
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