From a stabilised supply chain to the return of brick-and-mortar, the industry saw a new sense of normal in 2022. Still, challenges and new competition remain. How will brands and retailers adapt?
By BoF Team
December 23, 2022
Throughout the pandemic, retailers have been jolted by shutdowns, supply chain delays and radical lifestyle changes among consumers. Following a slump, fashion brands and retailers soon recovered, posting banner sales in 2021. But 2022 signalled the beginning of a new phase — one that picks up where we had left off nearly four years ago.
Discounts, a habit that temporarily disappeared in the face of booming demand as the world reopened, are back. E-commerce, which spiked in 2020 and 2021, has since returned to its slower, pre-pandemic pace of growth. Brick-and-mortar retail, meanwhile, saw a renaissance, and tourism — with the exception of China — exceeded 2019 levels by the summer of 2022. Even wholesale got a boost.
Yet, the world is not the same. In the face of inflation and economic uncertainty, consumers are more careful about how they spend. Alternative models of consumptions, including second-hand fashion and rental services, are growing their share of the market, though whether these business models are both scalable and profitable remains to be seen. Then there’s Chinese e-commerce juggernaut Shein, which in the space of a few years became one of the world’s biggest fashion retailers.
For the most part, pandemic surprises are over. But as those in the industry already know, the market remains volatile. The savviest survivors will be the ones quick to adapt.
— Cathaleen Chen, Retail Correspondent from (BoF) Business of Fashion.