The Challenges and Opportunities Created by the Pandemic

Pivoting during the pandemic; adapting to the changing consumer; the challenges of developing a truly diverse fashion industry, and the future of brick-and-mortar were among the key themes of the first day of the WWD Virtual Apparel and Retail CEO Summit on Wednesday.

Walmart U.S. president and chief executive officer John Furner said customers’ largely remote shopping habits this year pushed the company to bulk up its digital offerings and to super-charge its pickup and delivery services, and ensure that inventory levels keep up with demand. As the pandemic has stretched across seasons, shoppers’ focus also moved across product categories, from food and clothing in the initial stages, to hair products, cosmetics and back-to-school shopping, he said.

An analysis of those shopping trends may provide a window into the psyche of a consumer base whose lifestyles changed dramatically this year in lockdown, he said. “It’s been interesting to see and I’m sure one day we’ll look back through all the data and be able to identify what was selling when and know a lot about what our customers were going through at that time,” Furner said in a conversation with WWD editorial director James Fallon.

“I fully believe that a lot of what we are seeing right now is really an acceleration of where the consumer was going anyway,” said Marc Metrick, ceo of Saks Fifth Avenue. “I was at Saks for 9-11. I was at Saks during the 2008 financial crisis. Nothing goes back to where it was. Some things get a lot better, and some of the things you saw come around, disappear. Overall, I think the consumer is forever changed by this and Saks is ready for it. It’s a matter of how we go to the customer, how we execute, whether it’s personalization, private shopping, all of these they are going to want to do. The digital piece was important going in. It’s going to be important going out.

“We’re in the fashion business. You’ve got to always make sure you can be agile,” he added. “A lot of things you have seen us do over the years, whether it was the flagship reimagination, making our men’s business bigger, looking at our apparel footprint and tightening, editing it. We have expanded things we saw as opportunities, whether it’s handbags or other leather goods. We were on our way for this. One thing in our business you can’t do is overreact, and say, let’s just put a bunch of home exercise equipment in our store because that’s what’s selling now.”

Dries Van Noten, ringleader of a grassroots effort to fix fashion’s ills — too much product, delivered too early and marked down too soon — said in a conversation with executive editor Bridget Foley: “We have to really hope for a big change for fashion now.”

The Belgian designer managed to trim the size of his collections by 30 to 35 percent during the pandemic. And while he initially found it “quite confounding” to present his last collections via film, and not a runway show, he applauded the varied creative solutions of other designers and suggested “we haven’t seen the beginning of it.” The designer noted he does not expect to stage any physical fashion shows for the fall 2021 season.

Chip Bergh, president and ceo of Levi Strauss & Co., spoke with Evan Clark, deputy managing editor of WWD, saying the consumer has learned a lot of important lessons during the pandemic, particularly when they were sheltered in place.

“I think the days of conspicuous consumption are gone. Consumers are much more focused on conscious consumption. They’re buying fewer things but they’re buying brands that they know and trust in many categories, even outside of apparel. Consumers are actually trading up during an economic downturn which is the first time I’ve ever seen that in my career. They’re turning to brands they know and respect and trust. And the other big phenomenon that we see is a real focus on sustainability,” said Bergh.

Authentic Brands Group has been among the most acquisitive companies in fashion and retail this year, snapping up Barneys New York and Brooks Brothers out of bankruptcy and also being involved in the J.C. Penney deal with Simon Properties and Brookfield. The coronavirus may have delayed ABG’s ambitious plans for Barneys New York, but its reemergence is coming closer. The first iteration of the concept for the former luxury retailer will make its appearance within Saks Fifth Avenue stores in New York City and Greenwich, Conn., in the first quarter of 2021, according to Jamie Salter, ceo of ABG.

“COVID-19 set up back almost a year,” he said.

But even before Barneys at Saks is launched — a concept that will consist of 50 percent third-party brands and 50 percent Barneys private label — ABG will reveal a worldwide license with a Korean company for fragrance, personal care and a beauty line for the Barneys label. The retailer will also expand its presence in Japan, China and Korea over the next 24 months, Salter said.

This was a year that forced brands, and retailers, to get real, and Matchesfashion was one company that did just that, changing the way it spoke to, and engaged with, customers. Ivy Storvik, editorial director at Matchesfashion, and Hannah Fillis, the store’s head of social and digital campaigns, in a conversation with Michelle Belcic, vice president, international, at Dash Hudson, revealed how the editorial content and social teams took a deep breath and let their guard down in a bid to empathize with customers.

Matches couldn’t rely on outside creative agencies, so the teams started doing fashion and social shoots themselves — on the iPhone or over Zoom — something that would have been unthinkable just months earlier. In the thick of lockdown, the Matchesfashion team also launched an “At Home With” series of videos, offering tips on at-home activities such as flower arranging or dessert-making in a bid to connect with an anxious audience that wasn’t necessarily in the mood for spending money, or dressing up.

The result was spontaneous and sometimes raw — but authentic. Storvik said: “We definitely looked at our tone of voice during this time. I think we all were feeling rather fragile, everybody was feeling very aware of what it meant to be a human. We acknowledged that vulnerability in our tone of voice, acknowledged that people’s state of mind was worried or anxious, and we actively addressed that in our content.”

Another major issue facing the industry this year was the struggle for diversity and social justice following the police killing of George Floyd and other unarmed Black people in the U.S.

“There has been a lot of Black pain this year,” said founder and chief creative officer Sindiso Khumalo to begin the conversation “Fashion Forward: Designers Discuss the Work That Needs to Be” with designer and In The Blk founder Victor Glemaud and designer Stella Jean, moderated by WWD executive editor Tara Donaldson.

Many individuals, companies and brands looked within themselves and the spaces they inhabit this year in order to be more empathetic and inclusionary of all people, and many took necessary steps forward to bring effective, sustainable and thoughtful change, but the three panelists agreed that the need for change is an ongoing conversation.

“We must do our best to maintain the spotlight,” said Jean, who said the consistent conversation on this issue influenced the recognition in Italy.

The panelists spoke at length about how the continent of Africa and the African diaspora is reduced and often “sampled without citation,” said Jean, how the industry cannot pick and choose Black designers to highlight and exclude everyone else, how Black designers need strong backing from the global retail network, which Glemaud said Belgian and Japanese designers received in the early Aughts, and that real change comes from hiring diverse talent in companies and from conscious collaboration with Black creatives and sourcing.

“Bring us into the economy, in the conversation,” said Khumalo, and Jean quoted Albert Einstein saying, “We cannot solve our problems with the same thinking we used when we created them.”

She also said, “This system tailored by white people for the ultimate benefit of white people will never reflect true diversity.”

Despite all that needs to be done to make up for lost time, there is still an air of optimism. Jean believes the ideal fashion industry is one led by meritocracy, and Glemaud agreed, saying the ideal industry values talent. “And we will get there,” he said.

Here are other key points made during the first day’s sessions:

• “Sustainability is our lifeblood,” said Antoine Arnault, ceo of Berluti ,who also serves as head of image, communications and environment at LVMH Moët Hennessy Louis Vuitton, the brand’s parent company. Efforts to focus on sustainability have been part of LVMH’s ethos since Arnault’s father, Bernard Arnault, created a sustainability department in 1992. “The issues have been ingrained in our values for the past 30 years,” he said, adding that the company is working harder than ever today to create lasting solutions to combat climate change by switching to renewable energy in its retail stores, reducing its carbon footprint by cutting down on packaging materials for its e-commerce orders at the same time it works to preserve biodiversity around the globe.

• “At PVH, we’ve defined our corporate purpose as, we power brands that drive fashion forward for good. When we’re making difficult decisions in this polarized world, that’s been our barometer. We think about how we’re impacting our associates, how we’re impacting our consumer, how we’re impacting the communities we operate in. We need to balance…profit and purpose in everything we do,” said Manny Chirico, chairman and ceo of PVH Corp.

• “When you are in the midst of a crisis, and you are moving quickly and you are tackling the most immediate tasks, that is a survival skill and it really helps when adrenaline kicks in,” said Jeff Gennette, chairman and ceo of Macy’s Inc. “But the real trick is keeping the organization agile and moving quickly when the adrenaline rush and the immediate crisis subside. It’s really important to build plans that can be quickly iterated and adjusted. One thing that guided our work through all of this was a laser focus on our customers and colleagues. The velocity of change in our customers’ habits required us to remap every aspect of the customer journey: to be sure we had the right products and services that satisfied the current environment. We listened to our customers, we followed the data and we pivoted quickly where needed. If our customers were going to be on Zoom calls all day, we needed to get them the right options for home, for beauty, and for a more casual lifestyle.”

• “The concept of not having visibility and decreasing variability represents an enormous challenge for many companies and many executives,” said Greg Petro, ceo of First Insight.

• “COVID-19 has really shined the light on the importance of a stronger balance sheet,” said Jonathan Duskin, ceo of Macellum Capital Management.

• “One in four malls is expected to close in the next five years,” said David Bassuk, global retail practice leader of AlixPartners. “It’s really a challenging situation for all parties involved. So where do we go? We need to find new business models to survive and compete. Brands are bypassing retailers trying to get more direct access to consumers. They are jumping into marketplaces, and retailers are embracing things like resale and rental, trying to change the game and find new ways to compete. Just last week, Amazon launched pharmacy. Google is getting into banking. It’s kind of an endless mix of new business models that are evolving. The need for agility is even more intense.”

• “The only way to tackle disruption is with agility,” said Sonia Lapinsky, managing partner, AlixPartners. “You need to act fast. We have developed an index called Agility EQ. With this index we have a methodology to define, measure and improve your ability to react to your consumers’ changing needs nimbly and with speed. The three things that Mark [Tritton, ceo of Bed, Bath & Beyond] did to operate with agility. Mark broke down silos, embraced speed and he accelerated insights. If you do these things they have measurable improvements to the business.”

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