Fashion Online: Inc Impact of COVID-19 - UK - November 2020
Overview
 
There has been a record growth in online fashion sales, with online consumer spending on clothing, footwear and accessories jumping by 26% in 2020 to £28 billion. COVID-19 has accentuated the shift towards shopping for fashion online and heightened online demand will be a legacy trend of the pandemic.

Mintel’s research for this Report found that 42% of Gen Z and 38% of Younger Millennial online fashion shoppers have purchased fashion items directly from social media, compared with an average of 23%. The lockdowns have fuelled a rise in social media usage and this has led younger consumers in particular to follow more fashion brands on social media. With the pandemic accelerating the rollout of Facebook and Instagram Shops and a focus on small and independent sellers, this gives an opportunity for more niche fashion brands to grow their presence in a very competitive and challenging fashion market.

Fit remains a big issue when shopping online, with 49% of female online shoppers aged 16-34 and 45% of females aged 35-54 agreeing that they struggle to find clothes online that fit. Poor fit is the main reason consumers send back clothes they have purchased and this leads to unnecessary and costly returns for retailers. COVID-19 has served as a catalyst to drive retailers to invest in finding solutions to this ongoing problem by either partnering with specialist fit technology companies as Zalando is doing or by adding augmented reality (AR) sizing tools to their apps as ASOS and Very have done. 

While shopping for fashion online is convenient, it is not always enjoyable. Given that 55% of Younger Millennial females agree that it is worth paying more for clothes at a retailer that offers an enjoyable shopping experience and as this generation of younger consumers are increasingly shopping for fashion online via their smartphones, there are huge opportunities for fashion retailers to tap into this demand and use the latest digital tools such as screen sharing apps to make the online shopping experience more fun and sociable. Partnering with screen sharing apps can allow friends to meet and shop together virtually, recreating the social element of in-store clothes and footwear shopping.

Key issues covered in this Report
●	The impact of COVID-19 and the second national lockdown on the online fashion market.
●	How consumers’ online fashion shopping behaviour and attitudes have changed since COVID-19.
●	Where people have bought fashion online in the last 12 months and the preferred devices when shopping.
●	The most important factors when choosing one retailer over another when buying fashion online.
●	The growing influence of social media both as an influencer and as a trading platform for fashion brands.

COVID-19: Market context

This update on the impact that COVID-19 is having on the market was prepared on 16 November.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. As the case level rose, the government ordered the closure of non-essential stores on 20 March. 

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. It wasn't until 15 June that non-essential stores were allowed to re-open, followed by pubs, restaurants, hotels and hairdressers on 4 July, and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a full month-long lockdown from 5 November, and Scotland introducing a new five-level system of coronavirus restrictions. 

If case numbers remain high, it can be expected that the lockdown will be extended in England, but even if the second national lockdown does end as planned on 2 December, the current plan is to return to the regional tiered approach that was in force before the lockdown, meaning that large parts of the country may still effectively be locked down. 

Economic and other assumptions
Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 11.3% in 2020, recovering by 5.5% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

The Welsh and English lockdowns will inevitably have an impact on GDP and consumer finances, potentially shifting the UK closer to the OBR’s downside scenario. The market forecasts in this Report reflect this new reality.

From the start of the outbreak, we have made the assumption that an effective vaccine would not be widely available until well into 2021. On 9 November, Pfizer and BioNTech announced highly encouraging results from trials of their vaccine, followed by similarly positive results from Moderna. On 23 November the Oxford-AstraZeneca vaccine results showed that it offered a high level of protection and could be administered in existing healthcare systems as it can be stored at fridge temperature. This means that a vaccination programme may be brought forward, but a full rollout will take many months, meaning that Mintel is still making the assumption that we will be living with COVID for some time to come.

Products covered in this Report
For the purposes of this Report, Mintel has used the following definitions for online fashion:

Includes:

●	Clothing for men, women and children, including both underwear and outerwear.
●	Footwear, including shoes, boots and any other type.
●	Fashion accessories such as handbags, scarves and costume jewellery.

The market is defined as all purchases where transactions are made through the retailer’s website, or through an auction site, rather than by other ordering methods, even if the product is viewed online prior to purchase.