5 Trends Shaping the New Retail Landscape

The retail landscape today is a far cry from what it was before the coronavirus pandemic swept the globe. As lockdowns ease and businesses reopen, consumer behaviour and processes in the industry are driven by new sets of values and priorities.

Let’s take a look at the retail trends that are restructuring fashion today.

Top 5 Trends in the New Retail Landscape

#1 Sustainability First

Fashion’s devastating impact on the environment is undeniable, prompting consumers and retailers alike to pursue sustainability more than ever.

The Rising Second-hand Industry

• The second-hand market has been on an upward trajectory and is projected to reach $64 billion in five years as consumers increasingly value the circular economy and sustainability.
• Major brands are eager to cash in on the new wave of conscious shoppers. H&M-owned second-hand online shop Sellpy expanded internationally in a first foray outside of its home market. 
• Walmart followed the likes of Macy’s, Nordstrom and Madewell into resale by joining forces with second-hand platform ThredUp.

Incorporating More Eco-friendly Materials

• Omnilytics detected a significant growth in sustainable materials in the market as more brands look to elevate sustainability and transparency in the supply chain and appeal to changing consumer preferences.

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• Sportswear giant Adidas recently launched its new 4D 1.0 with Primeblue, a material derived from recycled plastic waste. 
• Nike’s latest sneaker release, the Space Hippie is made from at least 25% recycled materials, including t-shirts and yarn scraps. 
• Omnilytics’s data revealed an increase in demand for upcycled products in the UK. Urban Outfitter’s recycled-clothing collection Urban Renewal recorded an 89% sell-out since March 2020, with 68% driven at full price.
• In the US, Patagonia saw strong sell-out at full price across retailers like Nordstrom and Farfetch. The purveyor of upcycled clothing achieved 75% stockout at full price with a median price of US $82.

Powering Sustainable Initiatives

• Fashion powerhouses H&M and Stella McCartney signed the circular economy pact, a joint statement along with other global businesses to build a circular production model to minimise waste and pollution.
• Gucci relaunched its ‘Equilibrium’ program to champion sustainability and eradicate discrimination in the industry.
• Luxury e-tailer Farfetch launched a consumer environmental footprint tool, the Sustainability Calculator, equipping consumers with the means to better understand their fashion choices’ impact on the planet.

# 2 Revamped Retail Experience

Technology plays a critical role in innovating retail by limiting physical contact while streamlining the process. These new digital tools allow stores to stay afloat and push sales in a safe environment.

The Future of Fit Tech is Now

• Lingerie e-tailer Cuup scaled virtual fitting sessions by using video conferencing to compensate for appointment requests and increased sales by 700%.
• Lingerie brand Adore Me launched its own virtual fitting service through Zoom sessions to connect customers with lingerie specialists.
• The 3DLook tech for mobile body scanning and fitting is set to launch in over 1,000 stores of an undisclosed major US retailer. The technology requires a person to submit just two photos to scan for complete measurements, allowing for contactless fitting.
• Augmented reality platform Zeekit, which processes images in real-time to enable virtual apparel try-on will be adding Adidas and Tommy Hilfiger to its long list of partnerships that include major retailers like Asos and Macy’s.

Rethinking Physical Retail

• Two stores operated by Everlane are pioneering sidewalk shopping as a supplement to the curbside pickup services offered by several retailers to cater to cautious consumers. Along with revamped window displays, employees man entrances to assist shoppers and perform transactions -  including returns and exchanges - curbside.
• Nike will be launching its latest retail concept, Nike Rise in China. The large-format store will spotlight the company’s digital ventures and feature new technology to enhance the shopping experience.
• Pop-up space provider Storefront is aiding its tenants with an experimental virtual reality showroom concept that offers their customers a 360-degree view of pop-up stores to encourage online shopping while maintaining some semblance of physical retail.

Safety First

• Contactless payments are poised to be the industry standard to uphold social distancing and will likely expand to further reduce person-to-person interactions in retail transactions.
• Saks Fifth Avenue implemented ultraviolet handrail cleaners on its escalators as its Manhattan flagship store reopened as a safety measure for its customers.

#3 Pandemic Fashion

Lockdowns and social distancing mandates have shifted consumer needs. Naturally, the new retail landscape is run over with unique trends that reflect the current consumer demands.

Fashionable PPE

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• Omnilytics data revealed a steady growth in demand for face masks as quarantines lift and consumers gear up for life amid a pandemic. Face masks from Off-white and Urban Outfitters sold out in four days and nine days respectively.

• Gap capitalised on corporate demand for face masks by mass producing fashionable masks for the likes of the city of New York, the state of California and Kaiser Permanente  - setting the minimum order quantity at 100,000.
• Uniqlo launched its face mask made with high-tech material at the behest of its customers, which sold out within hours.
• Outerwear has emerged as a key category, viewed by many as a protective garment. Omnilytics uncovered oversized puffer jackets to be particularly popular among consumers in recent months, which saw a strong sell-out at 77%.

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Back to Basics

• Current consumer preferences skew towards relaxed-silhouette pieces, as Omnilytics’s deep dive into bestselling SKUs revealed minimalistic designs in core colours were favoured in the UK fast fashion segment.
• Joggers and leggings are trending in the UK as consumer demand for work-from-home essentials continues to swell.
• In an analysis of key jacket trends, bestsellers were made up of highly versatile and transitional styles, signalling strong demand for timeless products with longevity.

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#4 Evolving Supply Chain

In the thick of the outbreak, China was one of the first countries to go on lockdown and cease all non-essential operations. The outcome was a chain reaction that crippled the global supply chain. 

Many brands concentrate almost all sourcing in China - the dangers of which became evident in the pandemic. More brands have begun diversifying sourcing to prevent another disruption of this scale. At the same time, digital solutions surfaced to overcome challenges brought upon by Covid-19.

Nearshoring Plans

• 33% of global supply chain leaders have ceased sourcing and manufacturing activities in China or aim to complete the process by 2023 to move closer to the consumers while strengthening their supply network.
• Denim mills in Mexico resume operations, opening up a nearshoring avenue for the US.

Strong Digitisation

• Diane Von Furstenberg and the Kering group are among brands investing in 3D design technology to enhance the supply chain and facilitate remote working. The technology can be used for design and sampling to increase efficiency and sustainable processes.
• Trade show company Informa Markets is collaborating with e-commerce technology provider NuOrder for a digital trade show in September, as the feasibility of traditional trade shows is still up in the air.
• Gap responded to increased e-commerce demand with a robotics solution. The retail giant implemented an industrial robotic arms system supplied by Kindred to automate and streamline fulfilment in its warehouses.

#5 Off-price Retail

Discounts are dominating the new retail landscape, from fast fashion to luxury. No company was spared from overstock woes in this crisis, with no real avenue for relief other than markdowns. As a result, off-price retail is booming with a glut of brands liquidating aged stock on discounting platforms.

The Surge of Off-price Retail

• Off-price retailers like T.J Maxx and Ross made up the few stores that experienced increased footfall when businesses reopened in the US, indicating a value-driven focus among consumers.
• Omnilytics data detected a huge spike in newness and sell-out at online off-price retailers Yoox and The Outnet this year.

Luxury’s Discounting Outlet

• Luxury retailer Harrods opened its first outlet store in London to offload aged stock accumulated during the lockdown.
• Off-price luxury distributor Madaluxe Group purchased more inventory so far in 2020 compared to all of 2019 as key brands like Valentino scramble to move surplus inventory before the summer holiday season.

Key Takeaways for the New Retail Landscape

The changes taking place in the industry paint a clear picture of fashion’s future post-pandemic - a consumer-driven landscape with a strong emphasis on sustainability and technology as a huge factor in accelerating that growth. 

With the retail landscape evolving at a record rate, it’s essential for brands and retailers to maintain a keen eye on trends and movements to not lose ground on the industry’s progress.