Returning to a new normal – How to respond in a Low Touch Economy for Luxury fashion retail

As the COVID19 pandemic unfolds, global economies are bracing for the worst economic slump since the global financial crisis of 2007/08. Retail enterprises around the world are struggling to stay afloat with fashion and luxury sectors projected to be amongst the most hit.

With Lockdown measures across the world resulting in large populations staying at home, it is unsurprising that the sale of non-essential goods has been declining. This of course makes it difficult for any brand to sustain, in particular, those that rely on retail stores where sales have come to a standstill in Europe and America

 Online channels are struggling with the global supply chains being disrupted, warehouses either shut or operating at minimum capacity – and last-mile connectivity impacted.

 According to the Boston Consulting Group, revenues are expected to plunge between 25% and 35% this year with total sales dropping between $450m and $650bn as compared to 2019 levels.

The Low Touch Economy that the world is living in currently is here to stay. The post-Covid19 world will have an economy shaped by new customer habits, regulations, and restricted travel. The current disruption will bring an unprecedented rate of change in how customers shop and brands operate.  

While many retailers across the world are rightly contributing to local communities and supporting front line workers by providing PPE, discounted merchandising, and helping local charities, they also need to look at post Covid19 and “a new normal”.

 It becomes the responsibility of brands and retailers to provide enough safety measures for customers so that they feel welcome and are safe while they return back to a new normal.

Bringing customers back into stores or making customers feel comfortable while shopping in the Low Touch Economy is all about expanding the customer experience by providing enough safety measures and making customers feel welcome.

While transformation projects for brands/retailers require planning, capital, and resourcing; rapidly evolving in the current context will be the need of the hour. Ground-breaking retail innovations like Augmented Reality, AI, Virtual reality, and Robot assistants will have to wait for their turn since every customer will be looking at how prepared retailers are in the post Covid19 world.

The following are some of the measures that the fashion and luxury brands may want to consider in the race to survival following the easing of lockdown measures and reopening of economies.

Safe and responsible In-store Customer Experience

We imagine the topmost priority for all Global fashion and luxury brands would be to give their customers the confidence to shop in a safe and secure environment.

  • Responsible customer: The first step seems to be to monitor customers’ temperature as they enter the store – thermal screening & self-awareness of customers will prompt them to ensure their own well-being as well as that of co-customers around them.
  • Safer Stores: Displaying near real-time body temperatures of all employees in the store will go a long way to increase customer confidence that they are shopping in a safe environment.
  • Social distancing Metric: Social Distancing can be calculated based on the store’s sq ft area and daily footfall which can help to maintain a threshold of the maximum number of people allowed in-store at any given point of time. An example would be to have a display showing a scorecard of capacity vs actual customers in real-time basis.
  •  Mobile Payment over Card Payment: Eliminating contact by restricting cash payments and promoting mobile contactless over card payment using phones or smartwatches can also help keep up with the spirit of the Low Touch Economy.
  • Store Marking & Hygiene: Markings for safe distance and regular cleaning of surfaces. It is important for stores to adopt the same attention to hygienic care inside the changing room as they would in other areas of their store.

Credit: Claudio Peri/EPA-EFE/Shutterstock

Safe customer returns experience  

  • Responsible returns: Ensure that all returns either from customers or suppliers, go through extra measures which need to be put in a place to quarantine the goods for at least a week and the proper temperature is maintained in the quarantine bay / in-store location before moving the stock back into the inventory. Also, making sure that the employees dealing with returned goods are handling the returns with correct hygiene standards with stop any onward contamination of the staff themselves and other customers.

Credit: @closerlookofficial /

Apart from improving in-store customer experience following operational improvements will help retailers in the long run during post-COVID-19 world

Distributed Global Supply Chain and Inventory

  • Resilient Distribution Network: An agile global supply chains would be of prime importance such that a disruption within the supply chain disruption can be countered by a resilient process to switch the distribution to an alternative location(s) (e.g. 3PL Distribution Center, Ship from Store, fulfillment dropshipping from an alternative territory).
  • For example, luxury retail businesses in the UK are considering business continuity planning by shipping global online orders from their Hong Kong Distribution Centers in an event when European and US Distribution Centers have to close temporarily given the COVID19 virus.
  •  A large US retailer has opened its outlet inventory by quickly launching ship-from-store during a frozen Economy. 

Change the Retail merchandising

  • In Season stock: Making sure that the relevant season stock is in the stores and not for the season when the stores were shut.
  • Also based on the initial trends seen from some markets in Hong Kong and Europe where lockdown measures have been eased there has been a flood of customers coming out to shops. Worth thinking about how to optimise demand and merchandise planning for relevant inventory levels in the stores based on the locations where lockdown measures are eased.

Shortly, Fashion and luxury executives will need to refocus from crisis to returning to a new normal of Low Touch Economy and setting out strategies to re-connect with consumers.

Thanks to my Absolutelabs colleagues Tushar Seth and Bharath Gupta for compiling thoughts which served as the basis for this article. 

Picture: Louis Vuitton Maison Champs Élysées, Paris, France

Returning to a new normal – How to respond in a Low Touch Economy for Luxury fashion retail

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