Last week, the UK announced that Britain would – at least for the foreseeable future – remain within the EU-dominated European Single Market and Customs Union. The move marks an end to the past year’s populist trade scares, but means retailers must now focus on really understanding what’s driving their customers, according to Mike Flanagan.

A joint statement from UK and EU negotiators on the progress of the Brexit talks last week said the United Kingdom will maintain full alignment with rules of the Internal Market and the Customs Union. 

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It’s a move that marks an end to a number of trade scares over the past year:

  • Brexit campaigners, Trump and France’s Emmanuel Macron all promised huge changes in their countries’ trade rules;
  • But there have been no changes in those rules and it’s now more or less certain there won’t be.

Those promises would all have meant higher duties or more bureaucracy on clothing imports. But almost no-one in our industry cared because it’s a long time since sourcing was the ‘Next Big Thing’ about to transform our business.

It is obviously to the industry’s benefit that these threats have been removed. So what has been the Big Thing transforming our industry lately?

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It helps to look at why politicians chose to make those threats in the first place. I believe it’s because they understood the concerns of their voters – who are of course our shoppers – far better than their country’s clothing industry.

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Because for the past few years, most retailers and brands have completely ignored what has really obsessed shoppers: Immiseration.

That sounds political, so columns like this rarely discuss impoverishment. But it has hit the garment industry worldwide far more than the rise of e-commerce or the role of social media.

For all the fuss about Asian growth, three-quarters of global apparel spending last year was in Western countries whose population was getting more miserable.

Why?

In real terms, average incomes had been static for the previous 20 years – but for many, things were even worse. In Britain, for example, public benefits (like free hospital beds or university places) had come under growing pressure; similar benefits in the US had become almost unaffordable for most people; and in France jobs were impossible for young people to find.

Apparel retailers and brands rarely see this. Surely the sourcing revolution brought prices down, they say, so everyone’s better off really?

For many shoppers, though, price cuts on T-shirts – or smartphones or music downloads – come nowhere near making up for not having a job or a house they can afford.

How did Western retailers react to this?

Not the way most commentators would have you believe if you look at where the sales went. In the US, for example, the high fashion end of the market certainly didn’t dominate last year’s list of the ten biggest apparel retailers.  

E-commerce? Amazon didn’t even get onto that list. Try buying online from many of the Top Ten and you’ll soon stop deluding yourself e-commerce is the way of the future. Over 80% of all clothing in the US is still bought from physical shops, while Ross Stores (like up-and-comer Primark) doesn’t even do e-commerce. The fastest growth in the Top Ten? TJ Maxx, Costco and Ross Stores.

Fast fashion? Walmart’s clothing sales are five times Forever 21’s – and all the foreign fast-fashion chains in the US put together sell even less.

All those glossy features in the fashion mags? Well that’s the point. What, after all, are retailers for?

One of retailing’s great (and underappreciated) geniuses once said a retailer has to be “the customer’s buying agent: never the selling agent for someone else.”

I’d rather say: “Customers shop with us only if they think we’re on their side.”

Is an American with three jobs really going to buy clothes designed for people with fat wallets and thin bodies if she can’t afford her family’s medical bills? Or French and can’t get a job? Or British and her Universal Credit benefit is weeks overdue?

She”ll shop where she thinks she’ll find clothes she can afford. And fit into. And feel good wearing.

As the past year’s short-lived fears of destructive rules disappear, retailers will now have to concentrate on how they’re going to deal with the real changes their customers have been living through lately.

And that’ll have to be the subject of another Rant.