21 Aug 2020 • Retail
Data Dive: Retail's diversity disparity, mixed fortunes for fashion retail and why brands are inviting influencers in
Here's news on why a surge in interest in Black-owned businesses has come too late for many owners and how the authority of influencers is helping draw shoppers out of hiding.
Retail’s diversity disparity
The Federal Reserve Bank of New York has found that Black-owned businesses (BOB) in the US have suffered disproportionally during the pandemic, estimating that 41 per cent shut down between February and April. In comparison, 32 per cent of Latino-owned and 26 per cent of Asian-owned businesses closed during the same period, while only around 17 per cent of white-owned business were affected. ‘Businesses in the hardest hit communities have witnessed huge disparities in access to federal relief funds and a higher rate of business closures,’ state the report’s authors.
This comes despite the Black Lives Matter movement driving a surge in consumer interest in shopping with BOBs. As we covered in June, shelf space is now a key battleground for Black communities. Since then Target has taken the step of developing a BOB brand badge for its online store, while Google has launched a tool that allows businesses to identify themselves as Black-owned via the company’s Maps and Search listings. A recent report by Yelp found that there was a 7,043 per cent year-over-year increase in searches for Black-owned businesses on the site between May 25 and July 10. This interest and these interventions have sadly come too late to help many Black business owners, but will hopefully go some way to making those yet to come more resilient to future downturns.
Mixed fortunes for fashion rental
At the end of last year we made the prediction that the exponential growth of fashion rental might play a central role in saving the high street. Rent the Runway, the fledging industry’s first unicorn, had just ramped up its investment in brick-and-mortar in order to address key consumer frustrations around sizing. Fast forward eight months, however, and news that the brand is now closing all retail locations seems to indicate COVID-induced troubles for the clothes-rental paradigm. It makes sense given the context. As the co-founder of UK rental and retail platform My Wardrobe HQ Sacha Newall explained to The Telegraph: ‘It’s a perfect storm: fear of cleanliness and people not going out.’ My Wardrobe HQ has since delayed plans for physical stores.
But while most fashion-as-a-service brands have been impacted by the pandemic, there are signs of resiliency in the market too. Mengyuan Liu, founder of the Chinese brand YCloset, told Vogue that they have seen business pick back up since the lockdown eased; meanwhile UK peer-to-peer rental app By Rotation has actually reported a 60 per cent increase in users this year, accompanied by a 50 per cent increase in listing. The cause for continued optimism? Rental’s sustainability credentials, which matter even more to consumers now than pre-pandemic, according to Boston Consulting Group. It will likely still have a place on the high street too, with department store Selfridges recently partnering with rental specialist Hurr Collective as part of the Project Earth initiative it announced earlier this week.
Why brands are inviting influencers in
It would be wrong to suggest that the pandemic has been ‘good’ for any particular group, but it certainly hasn’t been bad for influencers, at least in a professional sense. A report published by GlobalWebIndex last month found that 47 per cent of consumers across the US and UK who follow influencers say they have been interacting with those creators more since the crisis began, while 49 per cent have maintained the same level of interest. Surprisingly, the study also showed Baby Boomers were one of the most actively engaged demographics, with 41 per cent watching creators’ livestreams over that period. The attention of that most-economically enfranchised generation hasn’t escaped brands’ attention either.
A few months ago we wrote about how retailers were creating social media stars out of their staff by livestreaming product showcases from their stores. Now Nordstrom have flipped that script and started leveraging the increased authority of influencers to tempt wary shoppers back across the threshold. The department store has been inviting a range of fashion-focused social leaders onto premises to highlight what the brand has been doing to make the store safer and reemphasize the pleasures of physical shopping. ‘In times of uncertainty, people are going to find the people that they trust the most to provide validation for the things that they’ve loved doing in the past,’ Krishna Subramanian, cofounder of Captiv8 – the firm that produced Nordstrom’s campaign – told The New York Times.