• On 31 October, the UK government announced a second national lockdown, in which all non-essential shops including fashion stores will have to close for four weeks from 5 November. 

• Since the start of the COVID-19 outbreak, buying new fashion items has moved down the list of priorities, with 32% prioritising essential items such as groceries over clothes. 

• Online retail sales increased 73% year-on-year in June 2020, the strongest growth since the start of the outbreak, and have since remained high.

• 74% of clothes shoppers will continue to shop for clothes online during the ongoing COVID-19 pandemic rather than visit stores.

Fashion has already been the hardest hit retail sector as result of the COVID-19 pandemic and the sector is being dealt a further blow with the closure of all fashion stores deemed non-essential from 5 November 2020 as part of the second national lockdown.

We expect the sector to be better prepared than during the first lockdown, when many retailers had to halt online operations due to issues with warehouse and staff safety. As part of learnings from March 2020, we have seen more retailers invest in digitalising their operations and better integrating their in-store and online offering.

However, it is a huge challenge for multichannel retailers to suddenly have to cope with heightened online demand and deliveries during such a busy period for retail.

We therefore estimate that the second lockdown will hurt an already struggling fashion sector during peak trading and will lead to a 28% decline in consumer spending on fashion in 2020.

Appetite for clothing, footwear and accessories plummeted during the first lockdown as people were forced to work from home and avoid leaving the house except for exercise. This time round the change will be less dramatic, but restrictions on meeting friends and family and bans on social events will continue to hamper sales of occasionwear at a time when people would usually be buying fashion items for Christmas parties and drinks.

Indeed, 32% of consumers plan to spend less on clothing, footwear and other fashion accessories for themselves to wear for events/the 2020 Christmas period compared with their usual Christmas spending habits.

There is scope to continue to shift the focus towards other categories such as loungewear and sportswear, as well as more versatile casualwear pieces that can be dressed up for zoom meetings and parties. There is also potential to drive sales of more outdoor clothing that reflect changes in people’s lifestyles as people meet up more outside.

While gifting will continue to be a key driver of sales in the run up to Christmas, with 51% of consumers planning to spend the same amount on clothing, footwear and other fashion accessories as gifts, these purchases will all have to be done online at peak trading.

Online demand has already soared since the COVID-19 pandemic begun, with 74% of shoppers continuing to buy clothes online despite stores reopening in June 2020. 

With all fashion stores closed during November, the concern is that growth in online purchasing during the festive period will put significant strain on logistics networks, during a period where strain traditionally already existed. A key way for retailers to ease pressure is to flatten out the demand curve and ideally push some purchasing earlier by encouraging consumers to purchase their fashion gifts in November rather than leave it to December. Extending the period for returns could also incentivise people to buy earlier, with Joules for example offering an extended 180 days returns policy during the lockdown.

With a growing disparity in people’s financial situations depending on the sector they work in, some people are likely to keep to a stricter budget this Christmas due to concerns around their finances, with 24% of consumers planning to spend less on fashion gifts during this festive season compared with the last. There are opportunities for more fashion retailers to appeal to value-driven consumers by offering buy-now-pay-later credit options such as Klarna.

As shopping moves online, there is scope for retailers to help customers virtually with gift buying recommendations and finding items to suit their budgets. For example, Seasalt has introduced virtual shopping appointments where staff can give recommendations for special new pieces and help with Christmas shopping. Offering bespoke customer services such as personal shopping and pre-bookable online chat or video sessions could help provide a USP for independent fashion retailers or more premium brands.

During these times of uncertainty it is imperative that retailers and brands show that they can be agile and find ways to bring elements of the in-store experience online using social media and other digital tools such as AR and VR that allow customers to virtually shop the layout of the store. Diesel’s new digital store Hyperoom that opened in June 2020 uses VR to give customers a 360° view of products.

In China, fashion brands have found that livestreaming sessions that allow consumers to talk to brands to get tailored recommendations are a very popular and effective way to encourage consumers to buy. H&M launched its first livestream shopping session in July 2020 with styling tips from one of its designers and stylists.

The shift towards online and ongoing closure of fitting rooms even once stores reopened, highlights the growing need for retailers to invest in the latest digital fit tools. ASOS has rolled out AR tools it was using for sizing during the lockdown and Very has developed technology to help customers find the right size and fit by viewing individual garments on different-sized models. As technology develops consumers will become more demanding and want a more interactive fitting experience with scope for outfit builders that allow them to see the product on an avatar of themselves.

As part of changes in behaviour seen during the first lockdown, people have been placing more value on health and wellbeing than before and as people spend more time at home this trend is likely to endure. Sportswear has been one of the few fashion categories to have seen surging demand.

Collaborations between fashion retailers and sports celebrities and influencers can appeal. In the US, soccer star Megan Rapinoe partnered with clothing retailer Abercrombie and Fitch in October 2020 to host a short video series on mental health and wellness on Instagram. 

Sports bra brand Shock Absorber unveiled a social media campaign in April 2020 showing Bristol City Women’s goalkeeper, Sophie Baggaley, replacing her dumbbells with a garden slab for a home workout wearing the brand’s Infinity Power Bra. It asked customers what household items they were using to exercise at home during the lockdown.

• A second lockdown will deal a further blow to the already struggling fashion sector during peak trading, but there are opportunities for retailers to drive sales.

• Offering bespoke customer services such as personal shopping and pre-bookable online chat or video sessions could help provide a USP in particular for independent fashion retailers or more premium brands.

• During these times of uncertainty it is imperative that retailers and brands show that they can be agile and find ways to bring elements of the in-store experience online using digital tools such as livestreaming, VR to allow customers to shop the layout of a store and AR sizing tools to help shoppers find the correct size and fit.

• Extending the period for returns could incentivise people to buy earlier and flatten the demand curve, thereby easing pressure on logistics networks.