It's 17th Jan 2021. Niraj Bajaj is working from his home in Navi Mumbai. He is VP, Corporate Banking, at one of India's large private sector banks. During the Covid crisis, his bank understood the power of work from home (WFH) and significantly reduced its office infrastructure in view of the obvious multiple benefits: lower rental and opex, increased employee work-life balance and less exposure to pollution and traffic for employees. The result is that Niraj now gets to work two days a week from home. This is one impact of Covid that is here to stay. So, he now dresses down on at least one of those two days, aligned to internal meetings. As it is, even in a formal environment like a bank, people have become used to seeing colleagues in tees, also acknowledging that what really matters is the work that all of us do, leading to fall in need for formal clothes and accessories. This is, at the aggregate level, a big challenge for companies that are in that business.
In Gurgaon, Sheela Biswas is reflecting on how long it's been since she has been to a casual dinner or party. The hot-shot lawyer at one of India's marquee firms vaguely remembers her hectic social life not too long back, but the memories are not sharp. The worries about large gatherings continue to keep socialising intimate, restricted to close friends and relatives. Events have simply dried up. Sheela misses all this to some extent and also realises that she does not need so many clothes and accessories that she used to buy to dress up for all those occasions. But she is glad that this situation will go away soon, for people are social animals and get their energy from being together. But till then, all those people will perhaps spend less on those things. This is again a challenge for those companies, but fortunately, not for too long.
Down South, in Bangalore, Aarti and Arun Rao are discussing what they should buy for their 5th anniversary. They met in 2014 in the same IT firm they work now and got married two years later. Unlike earlier times, the discussion this year is intense, going beyond products and brands. They wrestle with conspicuous consumption, sustainable living and the inequality around them. After two hours of deep conversation, they decide not to buy anything. We have enough, they say to each other. Reflections during the long lock-down in India, combined with the very visible misfortunes of millions all around, have made us all ask what really matters in life and perhaps slowed down materialism as we know it.
These are three forces that are going to have an impact on demand for fashion and lifestyle products. The WFO/WFH hybrid model is certain to sweep the world and will have a permanent impact on the need for formal products. The reduced socialising is surely a temporary phase and will hopefully disappear in a year from now. The slowing down of materialism is honestly an imponderable at the moment and is mostly anecdotal. But we need to dig deeper to understand that better.
There is a lot of action happening on the delivery side (try@home, video demo, endless aisle, VR/AR, assisted chats?.) to overcome the fear of shopping. However, the bigger sales challenge perhaps lies on the demand side, and not the delivery side.
So how can individual companies fight these challenges?
Work from home is a reality, yes, but can we create "formal" WFH wear? People are now comfortable not only wearing but also seeing others in semi-formal, even casual, clothes. Can companies start designing apparel and accessories for the "above the keyboard" view? (On a lighter note, may be Raymond can create a new suit option with slim shorts made out of the same fabric as the jacket for Niraj Bajaj to wear for a virtual client meeting without worrying about his shorts being caught on camera!)
While Sheela may be cutting down on her special occasion products on account of lower socialising, we can surely persuade her husband or brother or mother to gift her a stunning pendant for her 40th birthday. Sheela may be hesitant to buy, but would love to receive! Which means that companies need to step up their efforts in data collection, analytics and CRM, so that they are able to not only reach her husband directly, but do that a month ahead of her birthday and suggest a style of jewellery that has been determined from her previous purchases. Yes, gifting is a big flanking opportunity.
While there may be some kind of "slowing down of materialism" that Aarti and Arun are exhibiting, companies with a demonstrated conscience will win their hearts and minds and fight more effectively for a higher share of a reducing pie. The manner in which a company is dealing with environmental issues within its operations and outside, the extent to which a company is supporting communities within its operations and outside, will have a significant bearing on the trust and respect it generates from the new segment that Aarti and Arun represent and will directly flow as additional business. It is time for companies who have already had a head-start in these areas to step on the gas.
To sum up, three large forces will have an impact on demand for fashion and lifestyle products over the next few years. Their life may be just a year, somewhat longer, or for good. Companies need to strengthen their consumer understanding processes, dig deeper than they have done before and glean insights about what all is below the surface, what all likely changes in behaviour need to be inferred, predicted. And accordingly innovate for this new world.