The Covid health crisis has accelerated processes and purchasing habits, as if by pressing a button we had jumped a decade. In Spain the online sale of clothing doubled during the confinement, from 9% to almost 20% and cutting the gap with the United Kingdom, one of the countries where fashion e-commerce has greater weight (26%).
This explosion has not compensated for the brutal fall in turnover of the textile (-22.5% in July and -43% so far this year), warns Eduardo Zamácola, president of the employers’ association Acotex, but it has allowed to maintain active business despite all the restrictions, as a lifesaver that has prevented its complete collapse. And, above all, it has marked a before and after in retail, says Florencio García, a consultant at Kantar, where they have monitored the evolution of purchases during and after the state of alarm.
The growth rate has moderated since June, but online fashion invoicing exceeds the volume prior to the Covid-19, according to all employers and large companies consulted. The latest data from BBVA Research on card spending, from the end of July, also show a rise in online clothing purchases compared to last year. “It is one of the few phenomena that has taken hold after the state of alarm; in a few weeks companies have reached new layers of the public, more senior consumers, people who did not dare to buy over the internet… Given the current health situation, e-commerce will play an important role throughout the year”, continues García.
The large fashion chains are leading the way in the sector and have increased their investment in new sales channels to overcome this commercial crisis. It is no coincidence that Inditex chose to present its quarterly results this summer, where it reported its first losses since the IPO (?409 million), to announce the group’s new online strategy. The Galician giant will invest 1,000 million in three years to reinforce its digital strategy, with which it hopes to increase sales through the Internet to 25% of the total in 2022 – its turnover through the online channel shot up 50% in the first quarter of the year, and 95% in April.
At the end of this year they also plan to open a new 64,000 square meter studio for the digital operations of their flagship, Zara, at the company’s headquarters. The objective: that the physical store and the online store are fully integrated, creating a single establishment that can be accessed both by mobile phone and through the door of a store.
The Swedish group H&M has also turned to the omnicanalidad before the losses of the first half caused by the Covid (292 million euros), which would have been much higher, they admit, without e-commerce . From January to June, its sales through the online channel grew by 40% and came to represent 28% of its total turnover, as stated in its report for analysts. In 2019, however, barely represented 16% of the total, and in 2018, 14.5%.
The brutal increase in demand on the Internet made the firm open a logistics center in Madrid dedicated only to digital business in May, in a state of alarm. In addition to online integration, H&M has launched new distance selling formats, such as Livestream, which Chinese companies have started to test and which the Swedish firm is testing in its home country. The format allows for connection to a live broadcast from which the garments are presented, allowing the client to interact with the firm in real time and, if they wish, to buy on the spot. After Sweden, H&M will extend the service to the UK and, if it works, to other countries.
“The confinement and closure for weeks has undoubtedly accelerated the digitalization of retail,” they add from the Catalan Desigual. The firm closed 2019 with an online turnover of 14.2% of total sales. Already in January and February of this year its digital business was growing by about 30% and in April doubled. Registered web users have also risen by 86% and, in six months, the volume of omnicanal clients – those who buy both in the physical store and on the web – has increased by 10%.
At Mango, they also explain that online shopping “is driving the recovery” after the close of business and, after doubling their digital sales between March and June, they expect online turnover to exceed 30% by the end of the year.
If the big fashion companies trust much of their success to the omnicanality, the SMEs “have no choice but to catch up, we have to make this path,” says Arancha Algás, general director of Boboli and president of the cluster Modacc. Selling through the Internet, in addition to physical store, involves a significant expense for companies, internal changes and a refined logistics. “But small and medium-sized companies need to invest in this too, because customers already access it through both channels,” adds Salgás, whose children’s and youth clothing company has undergone a profound digital transformation.
Otherwise, SMEs run the risk of widening the gap with the textile giants even further, while internet-only stores (pure play retailers) gain market share. Zalando’s profit jumped 169% in the second quarter to 122.6 million euros and now exceeds 34 million customers, and Venca has improved its growth forecasts. “The statistics show that there has been a consolidation of online consumption, we have had the opportunity to demonstrate that this type of marketing works,” explains Jordi Badia, head of ICT at Venca, the historic catalogue sales magazine that now operates 100% digitally.