If the pandemic has taught the ecommerce community anything, it’s that retailers need to find ways to evolve in order to survive. And this warning doesn’t just apply to local and small businesses, but large, global retailers as well. 

Since the COVID-19 outbreak, online shopping for clothing and apparel has risen by more than 14% per BigCommerce. And why wouldn’t it? Since more and more department stores and outfitters are closing their doors, customers are taking to the screens to fulfill their shopping fixes. 

But the presence of online stores does not mean that retailers are prepared for this sudden shift in buying behavior. Major fashion brands in particular need to step up their game and innovate before they become the next American Apparel.

Going for Broke, or Just Going Broke?

You’ve certainly heard about the wave of fashion retailers that have filed for bankruptcy this year. Companies that lacked the resources to protect themselves against a pandemic, or had been long in decline, with COVID-19 representing the final nail in the metaphorical coffin.

Nine major retailers have filed Chapter 11 this year, including a handful of major players;

• JCPenney 
• Neiman Marcus 
• True Religion
• ALDO 
• J. Crew 

Bankruptcy does not always signal a company’s demise (in fact, as we’ll discuss later, bankruptcy is more aligned to a corporate rebirth in the more successful cases), the trend of retail bankruptcies has shown the difference between companies that are going for broke—risking it all in order to survive—and just going broke.

Going Broke: Inability (or refusal) to adapt to customer needs

The list of big fashion brands going bankrupt in 2020 grows a little longer every month, many of which have been around for decades. 

It’s true, coronavirus paints with a broad brush. But how has it managed to dismantle brands that, not that long ago, were considered staples in the fashion community?

• Lack of Analytics: Among the retailers devastated by coronavirus is designer jeans brand True Religion, which has been on the decline since its previous bankruptcy filing back in 2017. Why? Among other things, the company was either unaware of, or simply failed to respond to, growing customer demand away from high-priced jeans toward less expensive options and athleisure wear. The pandemic exposed these weaknesses, tipping the scales toward bankruptcy.

The Moral:

Relying on what made you successful in the past is one of the quickest ways to make you irrelevant in the future.\

• Poor Digital Presence: One of the strengths boasted by niche luxury retail brands like Neiman Marcus was the brand’s ability to provide a bespoke in-store experience to an exclusive, high-paying clientele. But the same could not be said for the brand’s online experience. According to Forbes, luxury retailers like Neiman Marcus are among the last to embrace ecommerce and digital marketing that would have opened them up to a wider customer base. 

The Moral:

Pouring all your resources into a single, in-store channel, can really hurt your business when customers can’t leave their homes.

• Weak Customer Interactions: For mall staple JCPenney, the pandemic could not have come at a worse time. Already $4 billion in debt, the company has a number of hurdles to overcome in order to survive. Not least of which, according to experts, is overhauling and modernizing the way it does business, beginning with customer interactions. Personalized marketing experiences, transparent customer service policies, and attractive promotions all rank highly on the to-do list.

The Moral:

You’re never too big to fail. Failure to adapt to a new world and new consumer can bring even the most successful retailers to their knees.

Going for Broke: J.Crew’s restructure toward omnichannel commerce

For some retailers, a Chapter 11 filing brought on by coronavirus represents a clean slate to, as DVF Studio UK put it, “[reset their] business model.” For specialty retailer J.Crew, bankruptcy has provided an opportunity to adjust its model toward a more omnichannel approach. And though the company is still early in the restructuring process, it has a clear plan in mind that, if successful, might provide a roadmap for other fashion brands to follow:

• Reduce Physical Locations: While J.Crew enjoyed month-over-month gains in in-store traffic, that traffic all but disappeared by mid-March. As a result, the company was paying leases on physical locations that earned only a fraction of the revenue they used to. By reducing the number of brick-and-mortar stores, they can both shed debt and get out of long-term leases on underperforming locations.
• Abandon Outdated Strategies: Along with restructuring its assets, J.Crew has also undergone some personnel changes with an emphasis on embracing a data-driven marketing and inventory approach. This includes abandoning the notion that designers, not customers, are dictating what’s next in fashion.
• Invest in Technology: For J.Crew, the path forward hinges on the ability to 1) provide a seamless shopping experience in-store, online, over the phone, and via social media, and 2) gear marketing efforts toward customer segments that use alternative channels to shop and interact with companies.

J.Crew’s future is still uncertain, and the company is one of only a few examples of fashion brands that have both the vision and the means to pivot in the midst of a global crisis.

To be clear, your company should not be on the verge of filing for bankruptcy in order for these changes to take shape. If you’re in the fashion or apparel industry, you need to take a long, hard look at your business model and make sure you’re not selling in the past. 

Clothiers that pay attention to their customers—their behaviors, their wants, and how they’re impacted by current events—and adapt to the times are going to be the ones dodging Chapter 11 and hanging around for years to come. Let’s explore some clothing brands that are adopting new technologies, ditching the one-track brick-and-mortar mindset, and thriving when big changes are called for.

Staying flexible: winning strategies from retailers large and small

Without a doubt, bankruptcy represents a clear call to action for certain fashion retailers. But some brands, both big and small, have managed to avoid bankruptcy status altogether, and some have even thrived in spite of coronavirus. 

What do these companies have in common? They acted fast and used their digital platforms to create better customer interactions.

Nike: proactive and personalized

It should come as no surprise that Nike, a company rooted in innovation, has taken a proactive and innovative approach to the pandemic from the start. 

At the first hint of physical locations closing, Nike pivoted hard toward digital sales, and created a personalized, direct-to-customer experience to preempt the anticipated hit in sales revenue. The result? While overall sales dipped by 5% in China at the pandemic’s apex, online sales on the Nike site rose by an astonishing 30%.

But Nike didn’t stop there. In addition to pouring resources into their online offering and setting a clear roadmap for the strategic opening of its physical locations, Nike also tailored its marketing to address the needs of its highest paying customers. Nike built its brand on helping people stay fit and active, but many gyms and fitness centers throughout the country were closing and people were staying at home.

The solution came in the form of Nike’s fitness app, which was the subject of an intense marketing campaign to homebound fitness enthusiasts. Throughout China in particular, a country hit particularly hard by coronavirus, use of the fitness app rose by 80%. In short, Nike makes a great case study for retailers that need to maintain good relationships with customers:

1. Pivot hard toward digital sales.
2. Focus on your most loyal customers.
3. Find creative branding solutions that will keep your people engaged.

Suitsupply: augmenting reality

You don’t need to be a multi-billion-dollar clothing retailer to find ways to thrive in the wake of a pandemic. 

For example, mens fashion brand Suitsupply has only been around since 2000 with more than 140 locations scattered throughout the world. For a company so reliant on providing an intimate in-store experience, e.g., exploring different fabrics, fitting, and measuring for suits, the pandemic should have been a death sentence. 

But it wasn’t, thanks to two innovative approaches:

• Augmented reality (AR) shopping experience: To reduce in-store congestion and promote social distancing, Suitsupply has activated a virtual pre-shopping experience leveraging augmented reality. Customers are guided through Suitsupply’s inventory with live style experts. Once a selection is made, customers can pick up their items knowing they’re getting the exact size they need. They can even book a fitting appointment in advance that complies with social distancing guidelines.

• The Safe Shopping Screen: In order to maintain its high tailoring standards, Suitsupply uses freestanding shopping screens, complete with strategically placed openings, to pin suits for in-store customers without putting anyone at risk.

Boohoo: give the people what they want

UK-based Boohoo, a fast-fashion retailer that has become a fashion “powerhouse” since its founding in 2006, is another example of proactive, customer-centric innovation in a time of economic crisis. 

Boohoo prides itself on its rapidly evolving business model, which allows it to offer up to 3,000 new styles each week for an average price point between $17 and $20. That adaptive business model has allowed Boohoo to both interact with customers and deliver on customer expectations in real time.

• Strong social media game: Boohoo has invested £80 million in a social media influencer campaign that at one point increased profits by 97% in 2017. The brand actively encourages celebrities, customers, and bloggers to post their purchases on Instagram, creating an interactive online community (over 2.3 million followers on Instagram) that generates tons of new content each day. At a time when people are spending more time than ever at home and on their phones, Boohoo’s social media game provides much needed variety for customers and sales revenue for the company.
• Focus inventory on customer need: Boohoo’s fast-fashion ideology means it can adapt its inventory almost at the drop of a hat. Leveraging social media trends and analytics quickly alerted them to the fact that more people were shopping for work-from-home staples—athleisure wear, nightwear, and other styles that emphasize comfort. At that point, it was a simple matter of changing gears.

CAUTION: Discounts Will Only Get You So Far

A popular strategy among many retailers anxious to draw in business is to promote massive discounts on their inventory. While this strategy is proven to move more inventory and get more people “in the door,” retailers should exercise caution with this approach and only resort to mass promotions if they can meet the following criteria:

• They won’t be a long-term solution: If your company is already losing money from lack of in-store revenue, significant markdowns in inventory will do little to stem the bleeding. Think of these promotions as a chance to connect with customers and let them know you’re aware of their situation.
• The website can handle the surge in traffic: Nothing will deflate online sales (or customer trust) faster than a site that crashes every time they try to check out. Make certain your online store can handle the increase in online traffic and that your customer service—phone, chat, and social media—is responsive to any needs, problems, or questions that may arise.
• You can manage customer expectations: Massive discounts should be temporary and used sparingly. It can be really tempting to extend promotions or increase the markdowns, but these efforts can shift customer expectations once things get back to normal, and they can even negatively affect or devalue your brand in the long run.

Curb in-store losses with digital innovation

While in-store losses are inevitable, merchants can still see boosts in revenue by shifting focus to crafting rock-solid ecommerce strategies. And while a global pandemic is definitely cause for adapting, taking these steps into the digital era will only benefit fashion retailers (and, well, basically any retailer) long after this pandemic has ended. Here’s a quick recap of must-dos for the road ahead: 

• Don’t ignore the analytics: Opt for data-driven stock management and the digitization of key functions.
• Create a seamless omnichannel shopping experience: Unify the shopping experience across all channels through personalized, interactive online experiences, a clean purchase path, and responsive customer service.
• Develop a measured plan for reopening safely: Strategize how you can implement social distancing and sanitation guidelines to bolster customer confidence. While ecommerce is the name of the game right now (and for forever), your brick-and-mortar stores (if ya got ‘em) still play a role in brand affinity and overall customer experience. A bad in-person experience could keep people from ever entering your digital doors. 
• Adapt your supply chain accordingly: Work to make your warehouses safer, opt for more direct-to-customer solutions, and find ways to reduce logistical costs like shipping and item tracking.
• Complete the ecommerce customer experience: The in-store experience is inherently personal by nature, which means clothing merchants truly have to go above and beyond online if they want their ecommerce experience to thrive. A crucial piece to this is the post-purchase experience.
  
  In your store, shoppers check out and have their products in hand. With ecommerce, they need that same peace of mind that their goods are going to show up on time and in good shape. Route delivers comfort and security to your customers throughout their post-purchase experience by tracking their purchase from order to doorstep and making it easy to resolve any refunds or online returns. Grab a demo of Route

The time for fashion to join modern commerce is now

Fashion retailers that want to not only survive but thrive during this dramatic shift to online shopping need to flex toward an omnichannel, customer-centric approach. Don’t be afraid to take data-supported risks and get creative with how you interact with customers as you both adjust to these new surroundings and work your way back to normalcy.

Selling clothes has historically been an experience stocked with clothing racks, full carts, and hours in a fitting room to see what looks best (and what’s better left at the store). Retailers that haven’t adapted to replicate this experience in a digital age are being hit hardest since heading into the stores has been ruled out. While it might seem too late for fashion folks who haven’t updated their marketing or selling patterns in a decade, it isn’t. There’s still plenty of time for clothiers to adapt to today’s consumers and make the cut in the age of ecommerce.