How is COVID-19 Impacting the Fashion Industry Supply Chain?
Gavin Williams, Managing Director, Supply Chain – UK & Ireland | April 20, 2020
The fashion industry has been considerably impacted by the pandemic, as governmental restrictions implemented across the globe influences consumer behaviour and the movement of goods. Here, I take a deeper look into the impacts on the supply chain, retailers and customers in the UK.
The importance of having an omni-channel strategy
The pandemic is leading to a shake-up of the fashion industry, and we can see that brands with online stores are responding most successfully. Quite interestingly, most of the retailers had started that online journey – but this underlines that the omni-channel strategy is definitely the way to go. With so many uncertainties around the duration of lockdown and consumer behaviour as we come out of lockdown, we can expect to see further innovative approaches to e-commerce from the industry.
Accommodating online shopping
Consumers are continuing with – and even switching to – online shopping, so we are seeing strong sales in our online fulfilment centres. The demand is significant. In fact, some of our omni-channel customers are even diverting their retail stock to support online sales.
While we are seeing little pressure on storage capacity, we initially saw an impact on processing. Social distancing requirements and shift separation meant that dispatch capability was reduced across the board. Retailers were still taking orders, but were having to push out delivery lead times to customers. Since, we have adapted our approach to counterbalance these changes, for example removing non value-add/essential tasks to increase productivity and get back to capacities wherever possible.
As can be expected, pure bricks and mortar retailers are struggling the most. Their warehouses are filling up rapidly. Some have switched from air to deep sea shipments to add 5-6 weeks to the lead time, an unusual turn for fashion retailers, where speed and newness is everything.
Adapting collections to our new lives under lockdown
As the UK went into lockdown a few weeks ago, many bricks and mortar brands weremoving from their winter/spring range to late spring/summer. It is likely we will see a lot of redundant stock held in sites by the end of the summer. Some retailers are consideringstoring stock for an entire year, typically in overflow locations, ready to launch for the 2021 season.
Fast fashion brands have also seen consumers switch from buying ‘going out’ clothes to lounge wear. To respond to this trend, they are holding their planned stock upstream and are looking to suppliers to produce alternative ranges. This is adding extra pressure on their supply chains – with potential additional costs and need to switch to airfreight.
These are my first thoughts on the impact of COVID-19 on the fashion industry, and I’m sure we will see further change as the dust settles.