Debbie McKeegan answers the questions that are troubling an entire industry

Nogah Senecky
April 6, 2020

Q: Which supply chain changes will be felt in the short run, and which ones should we prepare for in the long run?

A: The answer is very much dependent on the brands/ suppliers existing pipeline and stock holding. In the short term, many companies will have goods on the sea, and here the disruption (alongside the additional cost of freight) will become an ever-increasing issue, forcing many companies to cancel orders from the far east and resource closer to shore. The Textile industry will be affected by numerous delays as this current crisis evolves, for those that have deep, supply chains which extend on a global footing, take India for example, we can expect disruption for the supply of cloth. Out of stocks will increase as the pandemic migrates across the globe. For those with shorter, more diverse supply chains, the effects will be less visible. Many large manufacturers that rely on large imports from the far east will undoubtedly switch essential production to nearshore as the pandemic evolves.

Q: How will consumers change following the crisis? What changes are we beginning to see already?

A: Consumers are still shopping, Nike, for example, noted a 30% increase in online orders during the Chinese pandemic. Companies with a strong eCommerce presence regardless of industry, are in a prominent position to continue trading, those that do not must re-think their online strategies and fast. Sustainability, already a megatrend, will without question gain traction as a direct result of COVID19.

Q: Many businesses and consumers have experienced an accelerated digital awakening. Will we see the fruit of that change after the crisis? What should brands do to prepare?

A:  Don’t delay, use this time as a window of opportunity, increase your knowledge and become a virtual expert, be prepared for the big switch-on post-pandemic and a permanent change in how we do business!

Q: There have been many discussions regarding the positive influence of the crisis on natural resources and animal habitats. Will we see changes in the environmental impact of the retail industry?

A: NASA has shown that due to a global shut down pollution has decreased, the carbon emissions from China alone fell by 18% during their production shutdown. However, these carbon emission reductions will be short-lived and will rise again post-pandemic. Many worry that sustainability will be set aside by the large manufacturers that are desperately and put simply, just trying to survive financially. That would be a mistake, as the consumer has also awakened during this crisis to the effects of overconsumption and the negative impact forced by their actions on the planet. This is particularly evident by the exposure of the Fashion’s Industries risk and stock figures for products produced in the far east, which will soon be devastated by the social and economic impact of the coronavirus pandemic as the fashion industry cancels orders. The west has a corporate social responsibility and this must prevail for the sake of humanity.

Q: Did you notice a unique impact of the crisis on brands that did/did not embrace a sustainable strategy up until now?

A: For sure, many large brands have canceled vast stocks in their pipelines, as they face heavy losses and zero sales from retail exposure. Those that operate with a sustainable production model, and have a transparent, digital supply chain are best placed to pivot production and control the financial implications of slow sales and reduce overheads at speed. Such manufacturers can also switch production to meet product demand and continue to operate in these challenging times.

Q: Do you think that the outbreak will lead the retail industry to become more unified and global or more localized?

A: The retail industry needs a radical reset, and as a sector, it hasn’t ever really recovered from the 2008 crash, many failed to evolve and to radicalize their business models. These businesses will, without a doubt now fail, and the landscape of the physical high street will change forever. This sector will see many of the world’s largest retailers face fatal consequences. The landscape will become much more virtual, the supply chains will change too become more sustainable, and dependent on the scale of business we will see many looks to increase near-shore production as they move to develop a pandemic resistant business plan.

You are invited to read more about it in the article Debbie wrote here: