COVID-19 Response: How Retailers Can Adapt to a New RealityJune 19, 2020
The COVID-19 pandemic has resulted in changes across all industries, particularly retail. As a result, we’ve valued how the American Apparel & Footwear Association (AAFA) has helped the community establish paths forward through advice and conversation.
This week, our president Mark Burstein shared our firsthand accounts of what we’ve learned during the pandemic during the second broadcast of the AAFA’s Industry Resilience Campaign chat—you can view the conversation on demand here.
Mark spoke with Steve Lamar, CEO of AAFA, about strategies for COVID-19 recovery and how NGC’s Digital Supply Chain platform can help fashion retailers regain momentum, given the constraints and challenges due to the pandemic.
Respond to COVID-19 Excess Inventory
Technology can help fashion brands and retailers recover from months of store closures and the massive amounts of inventory they have on hand. According to McKinsey, the value of excess inventory from Spring/Summer 2020 collections is estimated at over €140 - 160 billion worldwide.
While many industry analysts feel this is a windfall for off-price retailers, Mark shared how he believes that “every retailer should consider itself a ‘discounter’ for the next three to four months…until supply is more in line with demand for the retailer’s particular product category.”
Unsold inventory is typically a retailer’s biggest asset, and the only way to ensure business continuity is to sell it. NGC can help retailers turn inventory into cash in the fastest, most profitable manner.
Prepare for Future COVID-19 Challenges
Once summer is complete, retailers will have entirely new challenges to face. Many retailers will have liquidity problems as a result of sales decreases throughout this year, a problem that may be heightened during a second wave of infections in the fall.
As a result, it is essential for all retailers to embark on a digital transformation journey. “Those that do will be able to utilize emerging technologies such as artificial intelligence, blockchain and IoT to make and execute decisions based on the environment much, much faster,” Mark said.
For these retailers, product lines can be developed in days, not months, and sourcing decisions can take hours instead of weeks. Using technology, they will be able to position materials and wait until the last minute to decide which products to make, where to make them and how to distribute them.
“To emphasize, the key to survival during this pandemic is turning inventory into cash in the fastest, most profitable manner. A new era is upon us and the pandemic accelerated the move to hyper-digital,” Mark remarked.
Learn More About NGC’s Strategies for Retail Recovery
The retailers that succeed will be those who use technology to react quickly to shifting environments. We are grateful for organizations like AAFA that help prepare all of us for the future of fashion. “I have been on the AAFA Board of Directors for over ten years and it’s been one of the most rewarding experiences of my career,” Mark expressed.
To learn more about our solutions and how we can help you manage your supply chain based on a constantly shifting environment, contact us to request a demo.