What we’ll buy in 2021, apart from less sweatpants
Vaccines give hope for a more fashionable future, but men are likely to need less suits and women may stick to comfort over chic
First, we stocked up on sweatpants, then we made home improvements. Next will we be booking vacations and buying beach bags? It’s not the most outrageous idea.
Since the arrival of a Covid-19 vaccine, there has been a “great rotation” in the stock market: investors have been pulling out of safe-haven stocks, such as consumer staples, and moving into those that could benefit from a recovery, such as banks and airlines.
Shift the focus to shoppers, and we may see a great rotation in what people buy, too. Spending could move away from lockdown-inspired home improvements and back to travel and dining. Even with the pandemic raging and restrictions getting tighter over the holidays, tour operators, luxury groups and fashion retailers should be prepared for some future shifts.
Consumer behaviour has already changed a great deal this year. Those fortunate enough to keep their jobs and work from home saw their savings swell. When they decided to spend, it wasn’t on dressy clothes, shoes or holidays. Instead, they splurged on cashmere loungewear, indulgent food and, of course, their residences.
But as lockdowns and other restrictions get lifted, some of that spending will rotate back to “experiences.” TUI, the biggest package tour operator, has already sold half its vacations available for May 2021. French hotel group Accor recently struck a deal to expand its position in the boutique hotel market, hoping to get a boost from its younger and more leisure-focused customers. These companies are banking on people finally booking long-postponed holidays and dining in chi-chi restaurants.
Faith Popcorn, whose job is to imagine the future for big consumer groups, says this could manifest in what she calls the ‘Roaring 2020s’ — decorative clothing, high heels and lots of make-up
For luxury goods brands, a renewed appetite for experiences over things will bring mixed results. They have benefited from Chinese, American and European consumers treating themselves to top-end goods such as Rolex watches and Christian Dior bags with some of their accumulated savings. This demand will probably fade as a broader array of spending options becomes available.
But any decline in domestic consumption should be offset by a gradual increase in tourist spending, as people from China, the US and the Middle East begin traveling again. This will be particularly important for European luxury groups, including LVMH Moët Hennessy Louis Vuitton and Gucci-owner Kering.
On average, some 50% of luxury sales in Europe come from overseas tourists, according to Flavio Cereda, an analyst at Jefferies.
The big unknown on consumer behaviour is how an economic recovery will affect the clothing industry. Global spending on apparel this year is set to shrink by 16.7% from 2019, according to GlobalData. In the US it’s projected to be 25.7% lower. But there’s reason to believe demand will tick up in 2021.
A vaccine brings hope that we’ll eventually return to workplaces, at least for a few days a week. After almost a year of not dressing for the office, people are bound to refresh their wardrobes. While men probably won’t buy as many suits (bad news for Hugo Boss) and women may prioritise comfort over chic, this doesn’t mean we’ll all keep working in sweatpants.
Winser London, an online retailer that specialises in upmarket workwear, has seen demand for its silk blouses remain strong during the pandemic (one still wants to look good on Zoom) and even intensify recently. Demand for its dresses and blazers also briefly recovered in the autumn when people started to return to offices. It makes sense if you think about the new world of work, where routine tasks will be done at home, while days in town will be for meetings and presentations — events that require more polished outfits.
Meanwhile, Anita Balchandani, who leads McKinsey’s apparel and luxury work in Europe, says there’s a “huge pent up demand for glamour.” According to Lyst, the fashion platform, searches for heels and gowns held up even when people had nowhere to go. And trend forecaster WGSN sees a return to colours and prints amid increasing optimism about a post-pandemic future.
Yet fashion often reacts against prevailing conditions. Faith Popcorn, whose job is to imagine the future for big consumer groups, says this could manifest in what she calls the “Roaring 2020s” — decorative clothing, high heels and lots of make-up could be a backlash against the drab leisurewear that characterised much of the year.
This turn would be a relief for high-end sellers, such as Gucci, Chanel and Louis Vuitton, as well as fast fashion chains such as H&M and Inditex’s Zara.
Whichever version of the future emerges — be it comfort chic or more splashy get-ups — a shift in wardrobes will be one more great rotation to pay attention to.
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