In April, UK retail sales fell by a record 19.1% as the nation continued to feel the effects of the Coronavirus. But for fashion brands with an online offering, there’s an opportunity to thrive.
We’ve analysed the developing impact of Covid-19 on order volumes and referrals for more than one hundred fashion brands, in the UK and beyond. As the below graph shows, online orders and referrals for brands in the fashion sector have significantly increased since the lockdown began.
Here’s how the pandemic has impacted the fashion industry so far, and how brands in this sector can survive – and thrive – in the times ahead.
Adjusting to the “new normal”
Unsurprisingly, online orders for fashion brands fell in the first week of lockdown. Ecommerce sales for our clients in the sector dropped by 12%, remaining only marginally up on the same time last year.
But by April, there were promising signs of consumer appetite for fashion brands returning.
Worldwide spending on luxury fashion items online increased by 57% year-on-year. Sales for online fast fashion retailer Boohoo boomed. More people downloaded apps that let them try on clothes digitally.
Order volumes and referrals for our fashion brand clients began to rise.
By the start of May, our platform was delivering 101% more new customers to fashion businesses year-on-year.
Planning for the future
Consumers are using the extra time at home to shop online and catch up with friends. That presents valuable potential to ecommerce fashion brands with referral programmes.
On average, online sales for our fashion clients are up 78% year-on-year and rising. Right now, more people are recommending fashion brands than at the start of the year.
But brands shifting stock by offering generous discounts should be cautious.
As we learnt from the 2008 recession, continuous bargains mean consumers come to expect discounts and are reluctant to pay full price. This, in turn, squeezes retailers’ profit margins, sometimes to unsustainable levels.
As lockdown begins to ease, now is the time for fashion retailers to map out long-term customer acquisition and retention strategies. By going beyond tactics like cutting prices to drive immediate sales, brands can instil a powerful sense of brand affinity that significantly increases the lifetime value of customers.
Against this backdrop, Mention Me accelerated the release of its newest product, Mention Me Retain, earlier this month. By combining complex data with human expertise, it serves highly targeted messages proven to increase customer engagement, lifetime value and repeat order revenue for fashion retailers.
Prioritising new customer acquisition at the expense of existing customers has always been a risky long-term strategy, and that’s now truer than ever. Fashion brands that recognise the untapped potential of their existing customers – and use the right tools to harness it – will be the ones to thrive.
Courtney Wylie is VP of Product & Marketing at Mention Me.