Beyond COVID-19: How Apparel and Footwear Retail Will be Impacted

For apparel and footwear retailers, the next 12 to 18 months will be about survival, with a heavy emphasis on top-line sales, cost containment and risk mitigation. With stores in the US, Europe and my home of country of Australia starting to re-open, these retailers are faced with massive amounts of inventory that are unseasonable and may be out of fashion, whether in stores, warehouses or in transit.

We’re already seeing the impact of these challenging times with both J. Crew Group and Neiman Marcus Group filing for Chapter 11 bankruptcy protection while numerous others are considered on the brink.

But the reality is that this crisis isn’t treating all apparel and footwear retailers the same. Some, particularly in the off-price category, while facing significant challenges in the near-term will likely be able to accelerate as consumers increasingly focus on price and there’s excess liquidation stock available to purchase. While others, many of which have been fading icons such as will have their decline accelerated or simply cease to exist in the not too distant future.

In the below diagram I have, along with my colleague Bob Hetu, laid out what we anticipate the residual impacts of COVID-19 will be within 5 key apparel and footwear segments.

The full analysis of each of these 5 segments is behind the Gartner paywall and can be found here: Beyond COVID-19: Apparel and Footwear Retail Supply Chains.

Food For Thought:

• Walmart and Target are both ramping up their last-mile delivery services. Walmart’s 2-hour delivery service for $10 is expanding to more than 1,000 store locations, while Target pounced on Deliv, a last-mile delivery firm that had been servicing the likes of Best Buy and Walgreens, acquiring selected technologies and hiring key people from within the business that is otherwise winding up.
• Check out this robo-dog that is enforcing social distancing in Singapore. Not sure how I’d feel having a robot hound checking up on me!
• Consumers are stampeding back to their favourite restaurants in my home town of Sydney, Australia following the announcement that COVID-19 related restrictions are being lifted in key parts of the economy.

As a quick reminder, Gartner continues to produce a wide array of content in all our usual areas while also providing focused research on COVID-19 with a significant volume of this made publicly available here. 

Until next week – stay safe.

Best,

Thomas

Note: I’ve been publishing this blog on a weekly basis for the last 2 months but will be pulling back to a less frequent approach for the weeks ahead. Thanks for your patience with me as I work out the optimal cadence here and of course if you’ve found this one useful please do look out for my next blog notification from my account on LinkedIn.