CoronaVirus and Fashion Industry: how to face crisis

An analysis of the current state of perception of the CoronaVirus emergency, with a focus on fear and uncertainty. An overview of the population of the most relevant countries for the Fashion Industry in Italy and just one question: “How to Manage the Crisis?”

We are seeing the first effects of the crisis caused by the Coronavirus. Arrived so quietly, so quickly that it did not even allow us time to understand what we were facing, it has attacked all sectors of our society in the same way.

The market is and will be affected both directly and indirectly by its effects.

Never as in this period the web and social media, (like mirror of society), are registering ups and downs of the emotions connected to the spread of this virus.

From the observation of the trend of users’s conversation about COVID-19 and of the cases recorded in the country, we note various trends: surely, the news of the first contagion in Lombardy has led to excessive social alarmism (and also the proliferation of myths, legends, and fake-news) up to a descent of the relevance of the theme a few days later, and finally a big ascent with the discovery of the first outbreaks and the spread of the infection throughout the country.

Would you like to get some advice to face Crisis Management in the Fashion Industry?

Experts from large companies, such as Deloitte, Group M and ENI have already found an innovative way to use this technological cookieless model for their creative strategies.

A topic that, obviously, has soon been discussed all over the world, from Europe to the United States, which pervaded every single sector of the economy. But, how is the Fashion Industry reacting to this crisis? 

Always synonymous with elitism and opulence, even the Fashion sector has not remained untouchable, suffering an unimaginable decline.

From the analysis of COVID-19 themed conversations in the most interesting countries for the fashion industry, Italy is at the top, because after the massive outbreak of infections, general psychosis has increased.

The United Kingdom, which started with a low volume of conversations, also increased over time, as the spread of infections and information/misinformation about the disease.

In this scenario, Germany is stable, where the Coronavirus psychosis seems not to have affected the conversations on the web and on social media in large quantities.

In the past two weeks, these conversations led to an increase in the average levels of fear and uncertainty in the most important countries for the Fashion Industry. Different from the previous analysis, the strongest emotional reactions occurred in France and Spain, followed by the United Kingdom.

Italy seems less afraid than it might think given the contagion. Through the analyzes with AI technologies, much more anger and disapproval in the conversations of Italian has been identified, explaining in this way some behaviors held by the Italian people in the last period, such as the tendency to ignore the advice to “stay at home” and to participate in social and public events.

The more people experience fear, sadness, anger, and disappointment, the more their consumer behavior is negative. To better understand these sudden changes in consumption, let’s look at the situation of the Fashion industry, especially the Gucci brand.

In the final period of 2019 (November-December) the whole industry and the brand enjoyed absolutely excellent health: the pre-crisis emotion shows very high levels of Admiration and Joy, with few negative emotions, deriving from a few detractors (haters of the fashion, those who protest against certain forms of production, etc.).

 In the first two months of 2020, both the Gucci brand and the whole Fashion Industry are experiencing much lower levels of positive emotions such as Joy and Admiration, which instead flow into Fear and, marginally, in Anger and Disapproval.

This is both a confirmation and an explanation of the unprecedented drop in turnover in the past month.

The purpose of AI technologies and predictive models is, first of all, to report to companies the precise moment in which the levels of emotions and trust (towards their brand but also towards the industry) will return to pre-crisis values. 

This predictive model can be considered a small but great advice, so that brands can return to carry out their marketing and sales activities before the others, taking advantage of a time when only they will be “on the crest of the wave”.

A preventive study that can certainly anticipate the steps that will be taken in the flourishing period that will follow the crisis, which must be followed absolutely by an equally strong creativity.

The trend in the health situation will also be an important driver of consumption rebirth. Until the peak of the infection is locally reached, the ideal is to respond to fear levels by promoting solidarity and showing closeness to the public.

By crossing the levels of fear and the health situation, it will be possible to find the best moment to properly encourage the return to the shop windows, region by region, state by state.

How to help Fashion Brands to overcome the crisis quickly, reaching the market, as soon as it will be ready to expand again?

How can we use predictive models to reactivate the brand at the right time, always remaining in the customer’s decision funnel?

It’s to give an answer to these questions that we decided to face this battle together with Deloitte.

Our constant interest in Consumers allows us to provide, on managers’ laptops, an in-depth overview of the evolution of the phenomenon in real-time, from hour to hour.

By proposing these insights from the expertise of men like Giovanni Faccioli – Leader Fashion & Luxury @ Deloitte and Saverio Serafino – Customer Analytics Lead @ Deloitte Digital, we would be able to generate a series of solutions to be ready for any business scenario, in this case in the Fashion Sector.

Would you like to get some advice to face Crisis Management in Fashion Industry?

Experts from large companies, such as Deloitte, Group M and ENI have already found an innovative way to use this technological cookieless model for their creative strategies.