August 10, 2020
Through McKinsey & Company’s research, we address the challenges and innovative solutions taking place in the fashion industry.
As most clothing retailers remain closed during the global pandemic, fashion brands are looking to offset the spiraling decline in brick and mortar sales worldwide. McKinsey & Company’s research article, “Fashion’s Digital Transformation: Now or Never,” examines what brands are doing to transition their efforts to meeting consumer demand as all operations shift to digital within the fashion industry. Industry experts have done their research into what the future will be post-COVID-19 and if the “new normal” is something business leaders should start preparing for today.
Evolving Goals For Now-Digital Brands
With the rise of online retailers at an all-time high, brands worldwide needed to shift their focus towards introducing health and safety processes in their warehouse and distribution centers. The uncertainty surrounding business processes must be minimized by brands looking to retain their consumers as their retail shifts into a digital environment. McKinsey & Company’s research addresses ongoing challenges that businesses must face to survive, which includes a brief analysis of how consumer behavior has changed over the past few months. One of the top takeaways from their suggestions addresses the importance of choosing which pieces of a company’s value chain they must update and transition. Since most fashion industry businesses face the same challenges, they must be intricate and speedy in their strategic planning as they may eventually fall behind their competitors.
Where Demand Generation & Operations Management Meet
Retail companies are focusing on how they present themselves in the digital space, but they must manage their online operations to meet the heightened demand from their consumers. According to McKinsey & Company, “the online share of fashion and apparel in Europe and North America [will] increase by 20 to 40 percent during the next 6 to 12 months.” The tremendous increase drives the race to develop an efficient online operations system to meet these needs. This caused some of fashion’s most significant players to reduce their promotional activities to accommodate the large orders they were receiving. McKinsey’s research highlighted the mandatory relocation of resources to improve their online operations and eliminate the points of friction during the online process of meeting these orders worldwide.
As we come across the diverse solutions fashion brands are developing to support themselves in the digital space, one theme becomes clear: digital products that assist in the transition have been and will continue to grow more critical as the “new normal” develops. From transitioning within 13 weeks after retailers shut their doors, to relying more on online analytics to navigate strategic long-term goals, fashion brands are acting fast. This transition has not only been a challenge within the fashion industry, but it also presents an opportunity to diversify their business functions and accommodate a new crowd of consumers in the future.
McKinsey & Company. Fashion’s Digital Transformation: Now or Never. 2020