Since 2017, most of the products sold on Amazon haven’t come from Amazon itself but from the independent vendors listing their goods on its third-party marketplace. It’s a critical piece of Amazon’s business, and it lets the retailer offer more items than it could ever stock on its own while feeding it cash from the fees it collects.
Returns are a plague for retailers, especially those selling fashion online. Shoppers order items to try them on and often buy several at a time expecting to return what they don’t want. For every item sent back, companies run up costs for shipping and processing. Until the products reenter the system, they can’t go back up for sale. Those that arrive damaged or dirty may never return to inventory. The expenses add up and can eat away as much as a third of a company’s revenue, by one estimate.
Foot Locker is thriving. In a business update on Aug. 10, the sneaker retailer reported its comparable store sales, including sales at stores open at least a year and its online sales, were up about 18% compared to last year in the quarter through Aug. 1.
Faced with closing stores and dwindling foot traffic, US mall owners have been looking beyond retailers to occupy their empty spaces. One telling shift has included converting stores into e-commerce fulfillment warehouses, and now Amazon reportedly wants in.
The buying habits of shoppers tend to change slowly. Covid-19, however, has been disruptive enough to shake them up, and companies are trying to take advantage.
As of Aug. 3, 43 publicly traded or large private retailers had filed for bankruptcy in the US in 2020, according to market intelligence firm S&P Global. It’s a rate not seen since the 2008 financial crisis and its aftermath.
The men’s suit business has been in decline for years in the US, thanks to the century-long trend of clothes getting more casual and even the most conservative office places loosening up dress codes.
Yesterday, one day after members of the US congress grilled tech leaders including Amazon founder and CEO Jeff Bezos on antitrust issues, the company reported a blow-out quarter that saw its sales surge.
Even after e-commerce became commonplace, many luxury companies remained cautious about jumping into digital sales. Items that justify their thousand-dollar price tags with claims of exceptional craftsmanship and materials aren’t always able to communicate their desirability through tiny two-dimensional images. They may also lose their shine if shoppers can compare prices across sites, while the lavish experience of purchasing an item in an opulent store can feel merely transactional when checking out on a screen.
Around April in a normal year, tourists begin flocking to Europe before reaching peak numbers in the early summer months, bringing with them an appetite to spend that’s critical to the region’s business ecosystem. But 2020 has not been a normal year.
In the US and Europe, fashion has been among the categories hit hardest by Covid-19. In May, sales at US clothing and accessories shops were down 62.4% (pdf) compared to last year, while the 19-country Euro area said retail sales of clothing, textiles, and footwear were 50.5% below their 2019 level (pdf) for the month.
Since the start of the pandemic, clothing companies from the high-end to the low have seen their sales tumble due to store closures and shoppers reining in spending on non-essentials. But with countless gyms and offices shut, one category that’s offered the industry something of a bright spot is clothing you can wear to work out or lounge in at home.
In the past few months, countries around Europe have been emerging from their coronavirus-imposed lockdowns. As they’ve done so, shoppers have returned to spending.
Among the spaces Covid-19 has closed around the world are countless offices, nightclubs, and other habitats of formal footwear. Dressy styles such as heels—both high and low—as well as oxfords and loafers were already getting bumped from everyday use by more casual and comfortable options, such as sneakers and flats. Now there are fewer occasions to wear them, and so less reason for shoppers to buy a new pair.
Boohoo, a UK fast-fashion retailer, is under pressure after damning reports emerged about labor conditions at factories in Leicester said to be making clothes for the company.
The past few months have seen a wave of companies speaking out on social issues and injustice. They’ve flocked to social media to condemn racism in solidarity with the protests against police killings of Black Americans. They’ve pledged to halt advertising on Facebook through July to rebuke the social media giant for its role in enabling hate speech online. Some have pressured the NFL’s Washington Redskins to change its name, which they call disrespectful to indigenous Americans.
Humans have an old habit of turning utility products into decorative ones, so it was perhaps inevitable that face masks would become fashion accessories after Covid-19 forced them onto the faces of populations around the world. Now companies such as J.Crew and Gap are selling masks, and hordes of home sewers are peddling them on Etsy.
When fashion companies have too much unsold stock, they often use discounts to clear it out and make room for new clothes. It’s not always an ideal solution. Discounts squeeze profit margins, and too many promotions can leave shoppers reluctant to pay full price again.
Karen Parkin, Adidas’s head of human resources and one of its six executive board members, is stepping down immediately from her role at the German sports giant amid employee complaints that she has enabled racial discrimination at the company.
The past few years have been tumultuous for corporate supply chain managers. First came the US-China trade war and its lack of speedy resolution. Then came Covid-19, which upended industries from tech to fashion and laid bare how much global corporations rely on China for manufacturing and components.
In 2015, Gap eliminated the post of creative director and opted for a team-oriented approach after multiple designers in the role failed to turn around the long-struggling brand. ”We have cycled through so many, and each has been proclaimed as the next savior,” Art Peck, Gap Inc.’s former CEO, told the Wall Street Journal in 2016.
When Nike kicked off its 2020 fiscal year last June, this is not the outcome it was expecting.
Amazon says it’s stepping up the battle against counterfeits on its huge third-party marketplaces with the creation of a new team that will investigate fakes and pursue criminal charges or civil lawsuits against the offenders.
Since Covid-19 swept across western Europe in February and March and threw that season’s fashion shows into disarray, the industry has been wondering what the future of runways might look like. While the safety of large in-person gatherings was still being questioned, some events were canceled or moved entirely online, raising the question of whether fashion shows might reinvent themselves as purely digital events.
