Store-based fashion retail is heavily concentrated in city-centre commercial areas or shopping malls. Diminished footfall, because of both growing e-commerce penetration and hybrid working arrangements following the COVID-19 pandemic can support growth for suburban retail as an alternative. With fashion players increasingly tapping into hyper-local propositions, while experimenting with stores as micro-fulfilment centres, suburban retail can emerge as a post-pandemic winning strategy.
This report comes in PPT.
The COVID-19 pandemic disrupted work-life patterns by shifting millions of employees to remote working conditions. This subsequently led to some consumers swapping expensive city-life for cheaper and more spacious suburban areas.
Luxury and premium such as brands Louis Vuitton and Nike tend to concentrate in affluent parts of city centres as seen in London, Paris and New York. They draw on their exclusivity, and are careful not to over-dilute their image - especially high-end luxury brands.
Mass market brands such as H&M and Next focus more on delivering distributed spatial strategies. In London, Paris and New York, such brands have an extensive array of locations across the metropolitans, and cater to the demands of lower and middle income local consumers who lay emphasis on fast fashion and affordability.
Less commuting into city centres, and fewer trips made my tourists, is reducing footfall in city centre locations. This is especially a worry for luxury brands which have a concentrated retailing strategy, and are dependent on a constant flow of wealthy individuals.
Fashion retail revenues and business strategies remain heavily reliant on city dwellers. This has been spurred by urban population growth and rising incomes which have continued to drive consumer appetites for discretionary spending.
The global pandemic has highlighted the negative social and environmental impact of current supply chains. This is fuelling demand for more sustainable and social practices which brands and retailers can no longer ignore, to remain relevant.
Already having one of the highest penetration rates for digital sales, at 28.7% of retail value RSP, global sales of apparel and footwear via e-commerce are set to further accelerate, given the compound effect of store closures and brands’ prioritisation of direct-to-consumer operations.
Pent-up domestic demand is turbo-charging recovery for fashion players although pre-COVID-19 levels of sales are not expected to fully recover until 2023. Brands and retailers need to adapt their product portfolios and omnichannel strategies to cater to the needs of local consumers and the increased time they spend at home.
Global sales of the luxury goods are already bouncing back strongly in 2021. Over half of revenues lost to the pandemic are expected to be recovered by 2022. Much of consumers’ spending on luxury goods is now taking place at home and giving birth of the new “locavore” luxury consumers.
Apparel is the aggregation of clothing and footwear. This dataset covers retail sales of apparel through both store-based retailers and non-store retailers. Excludes black market sales (i.e. untaxed, generated within informal retailing)and duty free sales (travel retail). Items must be new when sold to the consumer; second-hand/used items are excluded. Antique and/or vintage clothing and footwear is also excluded.
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