There is always the prospect of pent-up demand for new clothing once people perceive the threat of Covid has passed

There is always the prospect of pent-up demand for new clothing once people perceive the threat of Covid has passed

Although we're not out of the woods yet regarding the pandemic and an anaemic economy, brands are stirring back to life. But with this tentative awakening comes cautiousness and uncertainty about the clothing market. Specifically, will consumers buy clothes as they did before the pandemic, or have we entered a new world? asks industry consultant Robert Antoshak.

It's a worrisome prospect for brands to feel their way into an uncertain market with few guides to help with sourcing and branding decisions. Traditional economic models, for instance, trashed by events over the past year hold little meaning these days; forecasts are even more worthless.

There's little question that the pandemic has battered global aggregate Gross Domestic Product (GDP) and ensuing consumer consumption. What's more, the previous economic dogma of balanced government budgets and restrained spending has been replaced by massive infusions of cash into the global economy to stem a severe economic depression.

Indeed, this Keynesian response to prop up faltering economies has resulted in national balance sheets ballooning to near World War II levels of spending compared to GDP in some cases.

Governments have little choice but to print money and inject capital into struggling economies. But as with any party, though, how bad will the hangover be the next day? And that's the rub for apparel brands: how will easy money brought about by fiscal stimulus affect consumer buying patterns?

Tough to forecast demand

Attempts to forecast how consumers will behave once the pandemic is perceived to have ended are hard to pin down. Moreover, we may find that consumer perceptions and reality may differ. Could there be a rebound in some new variant of the Covid bug? It's a possibility, but even more, the course for such a bug is unpredictable.

Predicting the future under normal circumstances is difficult enough; only now we have the unpredictability of Covid itself mixed with human psychology. And poor human psychology doesn't typically translate into predictable consumption of clothes.

Fortunately, though, we can rely on history and current measurements to suggest possible future outcomes. And what better than to have a nifty survey monitored and curated since the beginning of the pandemic to provide measures of general consumer attitudes and to provide insight into possible future behaviour.

A helpful analytical tool

Happily, all of this is made possible by Deloitte's "State of the Consumer Tracker," an online database of consumer attitudes.

The Deloitte database is robust, providing data necessary to glean insight into the global market from various angles beginning with consumer attitudes and ending with the intent of consumers to purchase clothing and other products. Without question, a fundamental aspect of today's market is consumer attitude. How do people feel about the world today? Are they confident, worried or somewhere in-between?

Here's a chart that helps to answer that:

Striking, right? Consumers in most major apparel-consuming countries feel more anxious today than they did a year ago, with very few exceptions. By combining answers to their survey, Deloitte can construct a "Global Anxiety Index," a surrogate measure of consumer confidence for 13 countries based on data collected from last April until this February. More striking is the global average for the thirteen countries: it's fallen.

According to Deloitte, "the global anxiety index is calculated by aggregating responses by respondents by country to the question 'I am more anxious than last week' and taking the difference between the percentage of users responding with 'agree' or 'strongly agree' and the percentage of users responding with 'disagree' or 'strongly disagree.' A positive percentage indicates that, in aggregate, respondents are more anxious than last week, and a negative, less." Or put another way: Net Anxiety = (% Agree) - (% Disagree).

From optimism to pessimism? The following chart sums up the global psychology at the moment.

Feeling bad

And who could blame people for feeling this way? Fear over contracting Covid, loss of loved ones succumbing to the virus, country-wide lockdowns, loss of jobs, a decline in social interactions with family and friends – it's a bleak world with not a lot of optimism. Hope is in short supply for many.

The World Health Organization graph above tells a grim story. Global Covid cases rose sharply during 2020, seemingly unchecked for months, only to drop off since the beginning of 2021 – a positive development as people took more care in protecting themselves from spreading the disease and the introduction of new vaccines. So perhaps hope is on the horizon?

When it comes to consumer intentions to buy more clothing, hope is in short supply. Virtually all countries measured by the Deloitte survey anticipate buying less clothing in the near term. According to Deloitte, this measure represents "the percentage of respondents who selected 'somewhat/a lot more' minus the percentage of respondents who selected 'somewhat/a lot less' to the question: 'How much do you plan to spend on each of the following items over the next four weeks compared to the last four weeks?'

A grim future?

Is this a harbinger of bad times ahead? Not necessarily. There is always the prospect of pent-up demand for new clothing once people perceive the threat of Covid has passed, but the big question is whether such purchasing is long-lived or not. In any case, while Covid remains a threat, demand for new clothing apparel to be muted.

Net spending intent (%)

3-Feb-21
Age GroupClothing/FootwearElectronicsHome FurnishingsGroceriesHousehold GoodsMedicineRestaurants/Take-Out
18-34-21-12282315-9
35-54-15-13-22261810-19
55+-27-24-351396-31
All-16-13-23221610-20
In store55516180777958
Online-picked up13141178914
Online-delivered32352713151228
3-Oct-20
Age GroupClothing/FootwearElectronicsHome FurnishingsGroceriesHousehold GoodsMedicineRestaurants/Take-Out
18-34-3-5-17272312-13
35-54-14-15-25241911-21
55+-26-28-3814108-30
All-15-16-27211710-21
In store59536682798264
Online-picked up12121077812
Online-delivered30342411141124

Source: Deloitte State of the Consumer Tracker

Note: Figures represent the percentage of respondents who selected "somewhat/a lot more" minus the percentage of respondents who selected "somewhat/a lot less" to the question "How much do you plan to spend on each of the following items over the next four weeks compared to the last four weeks?"

But, when it comes to near-term intentions, consumer attitudes are split regardless of age. As the table above shows, clothes and other discretionary purchasing, such as eating out in restaurants, suffer during a pandemic, while essential purchases at groceries for food and pharmacies for medicine carry the day.

Bottom line: at least for now, regardless of age, consumers have postponed buying clothing in favour of more necessary purchasing. However, online and online-influenced purchasing has gained prominence in consumer attitudes. Perhaps this is nothing new, other than the percentages reported by Deloitte are significant and could represent possible permanent shifts in consumer attitudes towards online versus physical store purchasing.

It may be tough now, but not necessarily in the future

However, it may be premature to predict permanent shifts one way or the other. Only time will tell. But speaking of time, what about the future? We may glean clues from different types of consumers, or as Deloitte terms consumer "personas." According to the survey, there are four types of such personas: stockpilers, convenience seekers, bargain hunters and socially conscious shoppers. Check out the table below:

Emerging personas (% of consumers identified by group) 

Consumer group19-Apr-203-Feb-21
The stockpiler4439
The convenience seeker4340
The bargain hunter4241
The socially conscious shopper - favour locally sourced products4442
The socially conscious shopper - favour brands that responded well to the crisis4340

Source: Deloitte State of the Consumer Tracker

This statement defines stockpilers: "Home is stocked with more than I immediately need." Convenience seekers, in turn, are determined by "I'm OK with spending more on convenience." Bargain hunters are defined this way: "If I found a great deal on a non-essential item, I would buy it today." In contrast, socially conscious shoppers identify in two ways. One by favouring "More locally-sourced items going forward even if they cost a little more," and by "Purchas[ing] more from brands that responded well to the crisis."

The personas provide a small window to the future. And there are several observations worth noting. Respondents to the Deloitte survey often see themselves in multiple ways. For instance, some could be bargain hunters while also being a stockpiler. Hence, the survey results don't add up to 100% due to this cross-over in attitudes.

However, what is interesting to point out is that although almost all persona expectations eased somewhat during the pandemic – a reflection of adaptation to the situation – the relative mix of personas remained consistent; this was the case before the pandemic and didn't translate into some eureka moment.

A deep hole to dig out from, but hope for the future

Different people have different attitudes and approaches to consumer purchases, an old story that continues on, pandemic or not. Even so, the pandemic has left our industry with a deep hole from which to dig out.

There are reasons to be optimistic about the future. Only the future may look different from what we knew previously. But that's the point: years to come seldom turn out the way things were or the way we hope they will. We will be rebuilding from a weakened state; many of the brands we knew in the past either haven't made it or will fail as we move past the pandemic.

Having said that, though, if the Deloitte survey has instilled us with any optimism it is the consumer's resiliency in the face of long odds. People still buy clothes, but the volume and types of purchases remain yet to be determined. As a result, we may be looking at a different apparel industry in the future, but an industry that was tested during very trying times.