Picture: 123RF/FOTO MIRCEA
Picture: 123RF/FOTO MIRCEA

Women are saying yes to the dress. The garment has become one emblem of the post-lockdown consumer, as economies slowly reopen in places such as the US and UK 

And dressier clothing is just the start of what may be a “great rotation” in consumer spending. At the end of last year, we argued that a vaccine-driven economic recovery would shift what people buy — they’d order less leisure wear and buy fewer cushions, but put more money towards Champagne, suits and experiences. In categories such as fashion and cosmetics, this shift is indeed happening; however, other areas, such as dining, travel and big events, have yet to really get going. 

Until trips to offices and sunny climes pick up again, retailers and manufacturers will have to manage this sputtering recovery and deal with levels of demand that may be much more, or much less, than they expected.

Urban Outfitters was the first to signal the return to dressing up. It said that at its Anthropologie brand in the last week of February, seven of its 10 best-selling online items were dresses. Over the previous year, one or two dresses at most would have made the top 10.

When British retail reopened in June and December 2020, shoppers bought many of the same things they were ordering in lockdown — lots of leisurewear and lingerie. This time around, sales of womenswear — and particularly floaty, mid-length dresses — are up, as are handbags and mascara (yes to above-the-mask make-up). There’s far less interest in comfortable clothes made for lounging at home.

“Fashion is back,” declared Associated British Foods, the owner of budget chain Primark. Clothing is undergoing its own metamorphosis: skinny jeans, the workhorse of women’s wardrobes for more than a decade, are on their way out; mom jeans and other looser-cut pants are taking over. This is boosting denim sales, and should inspire sales of new tops and shoes to go with them.

Unilever says the performance of its European ice-cream business would be linked to whether people can visit beaches and tourist towns

A return to office life will also fuel more fashion spending. Winser London, which specialises in stylish workwear for women, is seeing demand for more fitted dresses increase as cities open up again. Menswear hasn’t picked up as much, but sales should be revived as employers call workers back to headquarters.

While the rotation in clothing appears well under way, the picture is more complicated in other consumer sectors. In food, for example, restaurants are getting busier, but people are still cooking and ordering a lot at home. 

Nestlé says it’s seeing demand recover for products used in restaurants, especially in China; at the same time, its Nespresso coffee unit is still benefiting from remote workers being their own baristas. Rekki, a technology platform that connects independent restaurants with food suppliers, has also seen orders rise as the hospitality sector comes back.

Starbucks is starting to see recovery in sales at US shops in dense, urban areas — the type that rely on office workers and tourists. But growth in its home market in the latest quarter was still powered by suburban locations and drive-through windows, a sign that pandemic routines haven’t yet faded. 

The home improvement category hasn’t changed much yet, but spending on renovations and other projects is expected to slow over time. Now that you’ve built a new shed and extended that loft, you probably won’t be repeating the process any time soon. Some makeover projects envisioned in lockdown are still under way or awaiting an available contractor, but there will likely be fewer starting as vacations and sports tickets reclaim wallet share.

Holidays typically take a large chunk of the family budget. Right now, there’s a lot of uncertainty over international travel and fewer tourists are booking vacations abroad in sunny destinations such as Greece and Spain. (No wonder demand for swimwear is lagging fashion.) But if travel to and around Europe does resume this year, it will unleash a torrent of spending. Unilever says the performance of its European ice-cream business would be linked to whether people can visit beaches and tourist towns. 

Being in the midst of these shifts means retailers and consumer goods groups must keep planning for uncertainty and remain flexible. Strategies will have to take into account the vastly different Covid-19 experiences across regions. In the US and Europe, for example, clothing and food retailers should be ready to increase their supply. In markets still ravaged by the virus, such as India, the emphasis will be on meeting the needs of people who need to isolate, stay at home and recover from the virus.

As the great, post-pandemic shift in consumer habits edges along, the adage that “retail is detail” has never been more appropriate.

Bloomberg Opinion. For more articles like this, please visit Bloomberg.com/opinion


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