The COVID-19 pandemic first emerged over a year ago in March 2020. Now, as vaccine distribution efforts make progress around the world, day-to-day life and commerce are both slowly returning to normal. However, there are some shopping habits that are sticking. Looking back on the past 15 months, statistics showing the effects of COVID on businesses are grim in many fields. Hospitality, entertainment, personal services, and clothing retail are just several industries left reeling due to stay-at-home orders and social distancing mandates. Companies that rely heavily on brick-and-mortar retail stores suffered a near-complete loss of cash flow overnight.
In the midst of pandemic-induced chaos, the fashion industry experienced a massive reset that enabled many brands to not only survive but thrive. With more consumers sitting in front of laptops, tablets, and cell phones than ever, players in the athletic and outdoor recreation apparel market turned to e-commerce in order to sustain and increase revenue over the past year. This shift produced a staggering and lasting impact on the industry, with over half of consumers reporting that their shopping habits were permanently altered due to COVID-19.
While the fashion industry as a whole experienced devastating setbacks in revenue, e-commerce sales increased. The average market capitalization of apparel brands dropped 40% between January and March 2020, with 40 U.S. retail bankruptcies by July 2020. Globally, the industry expected profit dropped 93% in 2020. However, U.S. online sales hit a record $91.7 billion the same year, with projected growth expected to reach $100 billion in 2021. This is nearly double the growth seen in the apparel e-commerce space from 2019-2020. Going forward, brands must place heavy emphasis on curating pleasant online shopping experiences. This makes omnichannel distribution a key operational change since digital channels are here to stay.
Before delving into how to optimize e-commerce fulfillment, it is integral to understand how COVID-19 shaped consumer priorities. Mobile retail sales grew 31.5% in 2020 and are expected to grow an additional 28.8% in 2021 - a telling statistic the fashion industry cannot afford to ignore. Below are numbers to help paint a clear picture of the post-pandemic shopper’s ideal e-commerce experience.
Convenience. 78% of consumers now place greater value on convenience than before the pandemic. 90% of those surveyed reported spending more on websites with friction-free checkout. Another indicator that the distribution volume could shift more towards an e-commerce direct to consumer (DTC) model vs. brick-and-mortar.
Personalization. With a dramatic shift toward digital retail in 2020, marketers have begun to dramatically switch up marketing strategy. Challenged with maintaining and growing sales despite the global pandemic, 70% of brand decision-makers reprioritized marketing channels or revamped channel strategy. A sustained, increased focus on improving the quality of customer data and frequent communication will likely lead to more personalized experiences across e-commerce websites. Fulfillment should also include additional marketing and value-added material with order shipments.
Delivery. Now that 45% of shoppers are more motivated by convenience than price, delivery plays a massive role in capturing repeat business. Small and medium-sized businesses find themselves competing with e-commerce behemoths like Amazon. 2-day shipping is not just a perk now - it is an expectation. 95% of online shoppers state that fast, error-free delivery is a key factor when choosing where to buy products. Optimizing the e-commerce fulfillment process is key to compete.
In light of the pandemic-induced effects on consumer consideration factors, major fashion brands scrambled to capitalize on the swift shift to online sales. Omnichannel retailers are experiencing rapid growth in website sales in 2020, with e-commerce purchases increasing especially in the athletic apparel market. Gap refocused marketing strategy, introducing a plan to double online sales by the close of 2023 while shuttering 30% of its physical retail locations in North America. In order to bolster the ambitious goal, Gap is building a $140 million warehouse to aid in swift order fulfillment and distribution. While some retailers are building new facilities to handle the volume shift, others are retrofitting existing operations and picking from stores. While this strategy works, it works for smaller volumes. Plus, the consumer experience of multiple shipments isn’t ideal. Not to mention, the cost of order fulfillment increases substantially.
Due to the increased demand for convenience, easy delivery, and personalization, a holistic omnichannel strategy is essential for apparel companies of all sizes fighting to achieve positive growth. Fortunately, fashion brands have many options regarding how to accomplish a strategy overhaul. Companies may choose to broaden the scope of in-house e-commerce fulfillment or outsource to a 3PL (third-party logistics). With experience supporting major apparel e-commerce operations, SSI SCHAEFER offers the technology and expertise required to stay competitive for 3PLs and in-house fulfillment applications in the apparel industry.
Warehouse Management Systems (WMS). Warehouse management systems (WMS) enable organizations to increase picking efficiency and reduce errors - integral components in the new age of apparel e-commerce. Capable of supporting multiple distribution centers, WAMAS WMS from SSI SCHAEFER acts as a control center for warehouse operations, managing the flow of inventory within warehouses, tracking products from arrival to departure. Further, warehouse management systems can offer cross-channel planning, labor management tools, and flexibility for periods of increased demand or priority orders (holiday sales, promotions, seasonal volume, etc.)
Automated Storage and Retrieval Systems (ASRS). Automated Storage and Retrieval Systems (ASRS) can radically transform inventory management for in-house applications and 3PLs alike. Built to optimize order fulfillment and gain distribution operation efficiencies, ASRS solutions are computer-controlled storage and retrieval systems that assist with picking, packing, and shipping. Used alongside warehouse management systems, ASRS optimizes product storage and picking - providing the competitive edge essential in today’s apparel and direct-to-consumer (DTC) strategies. ASRS products from SSI SCHAEFER include the Logimat Vertical Lift Module, shuttle solutions, and the SSI Carrier.
Conveyance and Transport. Conveyor systems are used to move products through warehousing and shipping facilities. Ensuring accuracy, speed, and safety while moving and storing inventory, conveying and transporting solutions from SSI SCHAEFER are customizable depending on the amount of available space and product size/weight.
This merely scratches the surface of products and solutions available to apparel brands as the industry shifts toward e-commerce. With an increase in customer expectations regarding error-free, timely delivery, adopting automation is a smart investment for the future. SSI SCHAEFER has partnered with many businesses prioritizing swift, efficient order fulfillment.
Additionally, please feel free to contact us to speak with a supply chain expert!