5 Key Themes from The State of Fashion 2020 Coronavirus Update

Your essential guide to plan ahead. [BoF Logo](~/AAAHagA~/RgRgex67P0SCaHR0cHM6Ly9idXNpbmVzc29mZmFzaGlvbi5jb20_dXRtX3NvdXJjZT1tYXJrZXRpbmdfZW1haWwmdXRtX21lZGl1bT1lbWFpbCZ1dG1fY2FtcGFpZ249U3RhdGVfT2ZfRmFzaGlvbl8xNjA0MjBfQWN0aXZlJnV0bV9jb250ZW50PVcFc3BjZXVCCgAfu5mYXrOmznVSG3RyaXN0cmFtYmFsZHdpbjkwQGdtYWlsLmNvbVgEAAAAJA~~) ~/AAAHagA~/RgRgex67P0TeaHR0cHM6Ly93d3cuYnVzaW5lc3NvZmZhc2hpb24uY29tL2FydGljbGVzL25ld3MtYW5hbHlzaXMvdGhlLXN0YXRlLW9mLWZhc2hpb24tMjAyMC1jb3JvbmF2aXJ1cy11cGRhdGUtZG93bmxvYWQtdGhlLXJlcG9ydD91dG1fc291cmNlPW1hcmtldGluZ19lbWFpbCZ1dG1fbWVkaXVtPWVtYWlsJnV0bV9jYW1wYWlnbj1TdGF0ZV9PZl9GYXNoaW9uXzE2MDQyMF9BY3RpdmUmdXRtX2NvbnRlbnQ9VwVzcGNldUIKAB-7mZhes6bOdVIbdHJpc3RyYW1iYWxkd2luOTBAZ21haWwuY29tWAQAAAAk Dear BoF Community, The unforeseeable humanitarian and financial crisis has rendered previously planned strategies for 2020 redundant, with the industry facing a 27 to 30 percent contraction in global revenues. While fashion is currently focused on crisis management and contingency planning, we must eventually shift towards re-imagining our industry altogether. Last week, BoF and McKinsey & Company released a Coronavirus Update to The State of Fashion 2020 — an authoritative annual report on the major themes in the fashion economy. The report outlines where the industry must focus in the long-term, analysing surveys, data and expert interviews to provide insight for fashion professionals as they embark on the 12- to 18- month period after the dust settles. [DOWNLOAD REPORT](~/AAAHagA~/RgRgex67P0TeaHR0cHM6Ly93d3cuYnVzaW5lc3NvZmZhc2hpb24uY29tL2FydGljbGVzL25ld3MtYW5hbHlzaXMvdGhlLXN0YXRlLW9mLWZhc2hpb24tMjAyMC1jb3JvbmF2aXJ1cy11cGRhdGUtZG93bmxvYWQtdGhlLXJlcG9ydD91dG1fc291cmNlPW1hcmtldGluZ19lbWFpbCZ1dG1fbWVkaXVtPWVtYWlsJnV0bV9jYW1wYWlnbj1TdGF0ZV9PZl9GYXNoaW9uXzE2MDQyMF9BY3RpdmUmdXRtX2NvbnRlbnQ9VwVzcGNldUIKAB-7mZhes6bOdVIbdHJpc3RyYW1iYWxkd2luOTBAZ21haWwuY29tWAQAAAAk) 30% of fashion employees perceive their company’s post crisis response as ineffective. In the first theme, Survival Instincts, the report states that recovery from the pandemic will coincide with a recessionary market, compelling fashion players to ramp up resilience planning and adapt their operating models. 56% of consumers said special promotions were an important factor when shopping for clothes in the 4 weeks leading up to 29 March 2020. The second theme, Discount Mindset, addresses the deep discounting plagues that retailers will face for the remainder of 2020, exacerbated by increasingly frugal and disillusioned consumers. “The crisis is a catalyst that will shock the industry into change — now is the time to get ready for a post-coronavirus world.” – Imran Amed, Founder and CEO, The Business of Fashion 700% year-on-year increase in livestreaming on Chinese e-commerce website Taobao since the outbreak of Covid-19. Digital Escalation is the third theme, as social distancing and lockdowns have elevated digital as an urgent priority across the entire value chain, which companies must scale up and strengthen in the recovery phase of the crisis or suffer in the longer term. 80% of fashion companies could be in distress after more than 2 months of store closures. Theme four, Darwinian Shakeout, analyses how the crisis will embolden the strong and accelerate the decline of companies that were struggling before the pandemic, leading to massive waves of consolidation, M&A activity and insolvencies. The fashion value chain has been disrupted leading to rapid scaling up of innovation – from digital design to social commerce. The final theme, Innovation Imperative, examines how companies must introduce new tools and strategies across the value chain to future-proof their business models to cope with new restrictions, mitigate the damaging impact of the pandemic and adapt to economic and consumer shifts. 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