According to a recent McKinsey report assessing the outlook for fashion brands emerging from the global coronavirus disruption, “a two- to three-month lockdown will cause financial distress for 80 percent of European and North American fashion businesses.” As this blog post is being written, businesses deemed “nonessential” have been shuttered across much of this territory for about one month already, out of caution to contain the viral spread.
If you’re reading this, there’s a good chance you earn your living by dealing in apparel – and being deemed “nonessential” may feel less comforting than the authorities would have it.
If you’re operating primarily as an online business, that may help safeguard your operation from the worst of it, but event that’s not a failsafe for most. Your supply chain, especially if it involves multiple international components, threatens to be (or may already be) impacted, limiting your ability to produce in-demand products. Logistical complications may impact your ability to ship or receive necessary materials.
Perhaps most painfully, there is near-universal consensus that this disruption presages a period of prolonged economic hardship, the depth and duration of which is hotly debated. In the United States alone, more than 20 million people have filed for unemployment benefits in the past month, far surpassing the record for any such timeframe in the nation’s history. And per the report, “any scenario will likely disproportionally affect the fashion industry given its discretionary nature, and the industry’s recovery will lag behind the rest of the economy.”
This is the point where Jack Nicholson’s curmudgeonly author in As Good as It Gets might reasonably protest, “I’m drowning here — and you’re describing the water!” Never fear, for as Albert Einstein might reply, “In the midst of every crisis, lies great opportunity.”
As the research proposes, “The coronavirus also presents fashion with a chance to reset and completely reshape the industry’s value chain — not to mention an opportunity to reassess the values by which we measure our actions.”
The current crisis is shifting our appreciation of things once taken for granted. “Waste not, want not,” and a business that eliminates wastefulness from its practices and operating model – in terms of both overproduction and inefficiency – will find itself healthier in recovery.
One of the few “silver linings” to come of this disruption is one that pleases eco-conscious consumers: the sudden drop-off of commercial activity worldwide has produced an immediate, clarifying impact on the environment. Regions long smothered by polluted air can suddenly breathe again. Water in high-trafficked areas is clear again. The earth is more still. There is less noise. There is less congestion. As a result, consumers worldwide can observe for themselves the cleaner, healthier environment that is the culmination of sustainability-minded sentiment. Cleaner technology, and cleaner business practices, are the key to maintaining this positive development when activity ramps up again.
The study further predicts there will be a “Darwinian shakeout” resulting from the current situation, which is to say fashion businesses that were already in distress before coronavirus came along are more likely to die off in the near term, with many being consolidated by healthier, larger brands better-equipped to survive long-term.
Luckily, digital technologies already exist that will empower innovative fashion brands to weather the storm, reorganize, build around more efficient and more eco-friendly values, and prosper when this is all well behind us.
Read the full report, “The State of Fashion 2020: Coronavirus Update,” and contact Kornit Digital to learn more about how your fashion business can ensure it’s “essential,” healthy, and prosperous when today’s crisis is yesterday’s news.