Preparing an Apparel Retailer for the Latter Half of 2020 Amidst the COVID-19 Crisis with Market Opportunity Identification Solution
With the fast-changing global situation resulting from the spread of Covid-19, Americans are worried about the risk of being exposed to covid-19 and how the outbreak might affect their lifestyle. As a consequence, shopping habits and buying behaviors of customers have changed dramatically. This has severely impacted businesses across various sectors and the US apparel […]
With the fast-changing global situation resulting from the spread of Covid-19, Americans are worried about the risk of being exposed to covid-19 and how the outbreak might affect their lifestyle. As a consequence, shopping habits and buying behaviors of customers have changed dramatically. This has severely impacted businesses across various sectors and the US apparel industry is hardly an exception. In the North American region, the apparel industry employs more than two million people and generates approximately $400 billion in annual revenue. However, owing to the coronavirus outbreak, the US apparel industry has been extremely hard hit. To ensure business continuity and minimize downside for the latter half of 2020, US apparel retailers must take long-term action plans to succeed in the post-covid-19 business environment.
While it’s too early to predict the impact of covid-19 on the US apparel industry over the next half of 2020, it’s high time for business leaders to identify potential market opportunities and act accordingly. Find out how we can help you take actions to secure business continuity.
The client, an apparel retailer based out of North America, witnessed massive declines in sales as they had to shut down stores in compliance with government orders. While the duration and the future impact of the coronavirus outbreak remain uncertain, the client started an online clothing store to ensure business continuity. However, it did not help the client to manage apparel production and sales as customers pulled back on discretionary spending during the coronavirus crisis. After two weeks, the client noted that sales were 20% down compared to previous weeks.
To increase sales and retain valuable customers, they offered huge discounts such as buy one get one deal and savings of 50%. Although these strategies created a surge in online traffic, it adversely affected the brand perception and the company’s overall profits. As such, the US apparel industry client wanted to understand the potential market opportunities and minimize the downside for the latter half of 2020. Besides, they wanted to take longer-term actions to position companies to succeed in the post-covid-19 business environment.
Other key challenges faced by the American apparel store were:
- To communicate efficiently with customers and retain valuable customers
- To evaluate spend and identify potential reductions in cash outflow
- To review inventory and assess supply chain disruptions
- To enhance digital presence and build a stronger e-commerce business
- To prepare for reopening stores post-covid-19 crisis
- To reassess merchandising plans for the next half of 2020
As businesses across various sectors grapple with the covid-19 pandemic, companies in the US apparel industry must outline action plans to combat the impact of coronavirus outbreak with resilience. We can help you achieve this strategic objective. RFP here.
Our Integrated Approach
To help the US apparel industry client tackle the challenges caused by the covid-19 pandemic, the experts at Infiniti Research recommended market opportunity identification solution. Infiniti’s market opportunity identification solution involved a three-phased approach.
In the initial phase of the market opportunity identification solution, our experts conducted market segmentation analysis and helped the client to segregate customers based on their value for the brand. Also, the experts conducted a financial analysis of the company and helped the client examine spend and identify potential reductions in cash outflow. This phase of the market opportunity identification solution also involved the creation and mapping of the client’s potential opportunity post-covid-19 crisis from an R&D and competitive perspective.
In the second phase of the market opportunity identification engagement, the experts helped the US apparel industry client to prioritize and select best-fit opportunities and formalize technology acquisition strategy. This phase also involved preparing the client to reopen the store and reassessing merchandising planning for the next half of 2020.
The last phase of the engagement involved a detailed addressable market analysis of selected best-fit-market opportunity in terms of market attractiveness, competitive factors, and end-user preferences. Besides, the engagement involved mapping a strategic journey to financial resilience, building an operating model around digital, and anticipating a shift in customer buying behavior.
With Infiniti’s market opportunity identification solution, the US apparel industry client was able to stay abreast of the impact of covid-19 on their business operations. By segregating customers into various groups based on their value for the brand, the client was able to communicate frequently and clearly about strict hygiene practices in-store and new safety procedures for handling online deliveries. This helped the US apparel industry client to build the trust of customers and retain valuable ones.
Also, the US apparel industry client was able to examine the company’s financial spend and identify new ways to achieve a reduction in cash outflow. Furthermore, by closely reviewing in year inventory position and assessing supply chain complexities, they were able to adjust inventory for the post-covid-19 period. The experts also recommended the client to enhance digital presence and shift media spend to online channels. This helped them to maintain engagement and boost online sales during this critical period.
In addition, as customer behavior and preferences may have changed during the crisis, the experts recommended the client to reopen stores with a new operating model centered around customer engagement. Besides, the experts recommended the US apparel industry client to reassess merchandising plan for the second half of 2020 and spring 2021.
As a longer-term strategic action, the experts recommended the US apparel industry client to map a strategic journey to financial resilience by giving a greater share to online channels and exploring new ways of partnering with e-retailers.
Want to learn more about our services for apparel manufacturers in the US to combat the covid-19 challenges? Request more info here.