The Analyst Team

November 2, 2020

How retailers can prepare for the second wave of COVID-19

A deep dive into what is and isn’t selling globally to help retailers plan for the challenging trading period ahead of the coronavirus' second wave.

We know at the height of the pandemic, online consumer purchasing was driven by activewear and loungewear. What’s changed globally and what’s selling well now?

Following the announcement of several new national lockdowns and rising COVID cases, we’ve updated this report with up-to-the-minute facts and figures. To support your business during this challenging period, we’ve also compiled key learnings from a region that’s recovered from its second spike and additional resources to inform future strategies.

Don’t sign off on your second wave strategy without using market intelligence to back up your decisions. Find out more here

COVID outbreaks by region

• Cases worldwide have surpassed 46m, with over 1.2m people losing their lives to the virus.

• England, Ireland, France and the Czech Republic have all imposed new full national lockdowns.

• Germany is implementing a partial lockdown, while Italy, Portugal and Spain have imposed new restrictions and measures.

• Most countries are taking a “circuit breaker” style approach, with measures temporarily applied for two to six weeks.

Current retail market outlook

Looking at the EDITED COVID-19 Retail Dashboard, we can see that discounting has stabilized and arrivals are growing +55% YoY, for now.

Consumer spending also looks to have normalized for the most part, with denim and cold-weather accessories such as gilets and hats emerging as the categories with the most sell outs this past week.

Bodysuits have been a loungewear-led trend that boast versatility and are experiencing continued success – a silhouette that should see continued investment in spite of new measures.

What does it mean for Christmas?

• Across the globe, government bodies are acting now in attempt to “save Christmas”. With the second wave coinciding with the key holiday trading period and seeing most non-essential stores shutter, the retail sector is suffering another huge blow.

• Drapers is reporting that UK footfall is to drop by 62% in the six weeks to Boxing Day following new lockdown restrictions set by the government on Saturday.

• Those who used the first lockdown to re-evaluate and improve their online channels and offerings will reap the rewards during this second wave.

• According to a survey released just before the announcement of England’s second lockdown, John Lewis & Partners revealed that 60% of people will be completing their Christmas shopping by the end of November. This figure is set to climb even higher now that brick and mortar stores will close, opening up huge opportunities for those with a strong e-commerce set-up.

• It is also possible that December will see a shopping frenzy, should stores re-open before Christmas.

• With more people relying on online, it’s important to stand out from the crowd.

Key learnings from Australia

Update: Melbourne has now exited lockdown and Australia announced its first day of zero COVID cases for the first time in five months on November 1st.

The state of the market

Over the past three months, the number of product arrivals fell 6% vs. last year, with retailers pulling back as stores shuttered for the second time in major metropolitan areas across Victoria and New South Wales. This didn’t deter online shoppers – product sell outs in the Australian market saw a 98% lift YoY.

Coming off the back of a challenging bushfire season, this market has relied heavily on discounting throughout 2020 to help reboot the economy. For the second wave, an even more aggressive markdown strategy was in place compared to the first outbreak in March and remains high even as cases fall. In August, the monthly average discounting depth was 45%, with 59% of items reduced.

What sold over the second wave?

Unsurprisingly, T-shirts, sweaters, sweatshirts and cardigans made up a more significant proportion vs. last year. While more formal blouses, shirts and polos declined.

Despite the southern hemisphere’s winter, shorts were the top selling bottoms style, up from third place in 2019. Sweatpants moved from less than 10% of bottom sell outs last year to 15%.

Quilted/puffer jackets resonated with consumers as states enforced a one-hour daily walk as the only contact with the outdoors. Remote working saw suit jacket and blazer sell out drop YoY.

No-fuss comfort and wellness remained overarching factors for successful products. A pandemic-favorite, sleepwear continued to perform while all-in-ones saw a YoY increase as 30-second dressing for WFH became a viral trend.

Footwear overtook dresses as the third highest-selling category. Lifestyle sneakers outsold performance styles, further backing up casualization and comfort during the new normal. Sandals were unseasonably in favor – again, driven comfortable sliders and utility-inspired hiking sandals.

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How did retailers communicate?

With frustration mounting as consumers returned to lockdown, retailers kept their messaging positive and upbeat. Online activities such as home workouts and beauty tutorials popular at the start of the pandemic returned as a central theme.

Retailers pushed shopping edits for “post-iso” dressing, as something for customers to look forward to. The high level of discounting saw sale messaging also prominent with retailers even promoting markdowns to new season or full-priced stock.

Global product and category performance

Tops

Spurred on by the age of Zoom dressing, top sell outs grew YoY across all markets except the UK and remained flat in France. T-shirts continue to prove their prowess with interest in basics at an all-time high. Activewear and loungewear remains a perennial favorite in the US, achieved with hoodies and tank top sell outs.

A more elevated caliber of loungewear sold in the UK and France, with sweaters and cardigans seeing a YoY increase driven by new fall drops lending to the cozy dressing trend.

Across all markets, shirt sell outs made up a lower proportion this year compared to last, with Spain seeing the most decline in favor of a more casual aesthetic.

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Products with the most sell out activity YoY

US: Hoodies +46%

UK: Sweaters/Jumpers +5%

FR: Cardigans +50%

ES: Hoodies +58%

Products with the least sell out activity YoY

US: Shirts -14%

UK: Camis -38%

FR: Blouses -23%

ES: Polo shirts -14%

Bottoms

While suit pants have fallen off the radar, more casual styles are driving the trousers subcategory. Cargos have lifted in the UK while across all regions, wide-leg silhouettes equal a higher proportion of sell outs YoY.

Shorts have been successful due to the heavy promotion of running and cycling styles. However as we enter fall, sell outs in this style see a drop in the UK and the lowest YoY growth in France and Spain.

Despite the global obsession with comfort dressing, jeans made up a greater percentage of the sell out assortment YoY across all markets except the US. Its growth was still outstripped by sweatpants.

Interest in skirts is growing as new styles enter the market with all regions seeing an increase in sell outs YoY.

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Products with the most sell out activity YoY

US: Sweatpants +41%

UK: Skirts +28%

FR: Leggings +71%

ES: Sweatpants +106%

Products with the least sell out activity YoY

US: Leggings -6%

UK: Shorts -22%

FR: Shorts +12%

ES: Shorts +26%

Dresses

With house dresses hailed as an alternative to loungewear, YoY sell outs for this category grew across regions even with events paused. The fit and flare style reminiscent of office attire saw interest in skater shapes wane. Interestingly, body con dresses, which declined in other regions, were a hit in the UK. This can be drummed up to the Selling Sunset hype and influencer-approved ribbed knit styles.

Midi and maxi styles continue to dominate sell outs with voluminous silhouettes a key driver of success. In Spain and France, shirt dresses are experiencing prominent sell out activity with throw-on styles inspired by boyfriend dressing – of note as a sensible shape for a casual WFH aesthetic.

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Products with the most sell out activity YoY

US: Midi +146%

UK: Bodycon +225%

FR: Maxi +408% 

ES: Shirt dress +130%

Products with the least sell out activity YoY

US: Skater -14%

UK: Wrap -21%

FR: Bodycon -33%

ES: Skater -57%

Outerwear

Pre-pandemic, outerwear was already becoming less formal. Sell outs in suit and tuxedo jackets have dropped while more casual styles or activewear influences are on the up.

With a spotlight on socially-distanced outdoor activities, demand for weather-appropriate apparel is rising, with puffer jackets a core outerwear style consumers want now.

Blazer sell outs YoY in France and Spain have fallen. However, this style has seen a lift in the UK and US. Digging into the data reveals an emphasis on unstructured and slouchy styles accompanying the growing workleisure trend. Earmarked as a key material trend for fall, sell outs in leather outerwear have grown within the UK and France.

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Products with the most sell out activity YoY

US: Parka +89%

UK: Leather jackets +136%

FR: Coats +92%

ES: Puffer +44%

Products with the least sell out activity YoY

US: Tuxedo jackets -22%

UK: Tuxedo jackets -25%

FR: Bomber +24%

ES: Biker -81%

Footwear

Sneakers are showing no signs of slowing down. Further honing in on the importance of activewear, performance styles are seeing a higher percent increase of sell outs vs. lifestyle sneakers across all markets except the US, which was flat YoY.

Despite seasonality and a low percentage growth YoY, comfortable and functional sandals are continuing to perform, most notably in the Spanish market.

The slipper’s success over lockdown has paved the way for loafers to enter the mainstream for men and women, with this Dark Academia approved style seeing an uplift in sell outs across all markets.

Boots make up a higher percentage of footwear sell outs this year vs. last, with utility-inspired combat and hiker styles with lug soles and technical details favored – another nod to outdoor trends.

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Products with the most sell out activity YoY

US: Boots +51%

UK: Boots +87%

FR: Sneakers +110%

ES: Boots +264%

Products with the least sell out activity YoY

US: Slippers +21%

UK: Sandals +4%

FR: Slippers +10%

ES: Slippers +16%

Face masks

Retailers continue to adopt face masks and coverings into their assortments as daily use becomes regulation. Already, sales are starting to spike again ahead of a second outbreak and as regions such as the UK introduce new penalties for failure to cover.

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Black-owned brands

While there is still work to do, the ongoing movements for recognition and diversity in retail and fashion has helped Black-owned brands be amplified within luxury platforms resulting in an uptick of sales activity. Based on a sample size of 32 Black-owned brands, EDITED data analyzed products sold out at a rate of 1.1% with a 3.3% replenishment rate last year. This year, it’s jumped to a 7% sell out and a 10% replenishment rate, indicating retailers are not only selling more but also reordering products from these labels.

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Brother Vellies Email US – Sep 15, 2020

Contributions by Kayla Marci and Aoife Byrnes.

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