Mia Deaconu, FASHION HOUSE Group: The pandemic accelerated the trend towards comfortable and versatile clothing items

In an insightful discussion with Business Review, Mia Deaconu, Head of Marketing at FASHION HOUSE Group, delves into the dynamic fashion market and its evolution post-pandemic. Deaconu reflects on the challenges and opportunities presented by the rise of regional online retailers and how it reshapes the competitive landscape, urging established brands to innovate and adapt. She discusses the consumer shift towards comfort and versatility in clothing, influenced by the pandemic and changing work models, highlighting athleisure and smart-casual attire’s enduring popularity.

The fashion market has seen increasing competition in recent years with the entry of more regional online retailers. How does this influence the market as a whole?

The retail market has experienced a lot of dynamic in many directions after pandemic and we see these changes in the fashion retail as well. The emergence of regional online retailers within the fashion market has undoubtedly reshaped the industry landscape, bringing both opportunities and challenges for all industry players. Established fashion brands are compelled to refine their strategies, innovate their product offerings, and enhance customer experiences to stay relevant amidst evolving consumer demands. The influx of regional online retailers exerts pressure on pricing strategies across the board. Brands may need to reevaluate their pricing models to remain competitive without compromising on perceived value or quality.

Increased competition necessitates more and sustained efforts in brand visibility and market penetration. Fashion brands must invest in robust marketing strategies to stand out amidst a crowded marketplace. As a result, the digital landscape can be overloaded with lots of campaigns and communications launched by companies to reach their sales objectives. We can see the effect of that in increased media prices online in the last period.

However, the segment in which we operate is less affected by this dynamic as the outlet industry experienced excellent results in the last two years.

Our FASHION HOUSE Outlet Centers in Romania reported double digit increases in main KPI’s, showing results of +30% in footfall and turnover in 2023 vs last year. This growth of the outlet segment is recognized across Europe being influenced by a series of economic factors which lead to changes in consumers behavior.

The best way to adapt for fashion brands is to prioritize personalized services, seamless shopping experiences, and post-purchase engagement to retain customers in this competitive landscape.

How has consumer behaviour changed after the pandemic? Which clothing items do they prefer in 2024?

The consumer behaviour has changed in the recent years being influenced by a series of factors. After pandemic, we witnessed the ‘revenge shopping’ phenomenon. People were eager and enthusiast to visit the physical stores and enjoy the pleasure of shopping.

But meantime, other challenges appeared: political crises, inflation, and an unstable economic context overall. The consumer behaviour is now very much influenced by the disposable income and people became a lot more caution when making a buying decision.

In terms of preferences, the pandemic accelerated the trend towards comfortable and versatile clothing items as consumers prioritized functionality and ease of wear. This preference persists in 2024, with a continued demand for athleisure wear, loungewear, and versatile pieces that seamlessly transition from home to workplace.

The widespread adoption of remote and hybrid work models has also reshaped wardrobe preferences. Consumers seek clothing items that strike a balance between professionalism and comfort, such as smart-casual attire, versatile separates, and functional accessories that complement both virtual meetings and in-person interactions.

In all our Outlet Centers, the best performing categories remain sportwear and casual wear, confirming these current consumers preferences.

How have sales evolved in volume and value in recent years? How big is the influence of inflation and a possible economic crisis?

Before the pandemic, the fashion industry generally experienced steady growth in both volume and value of sales. Increasing consumer spending, particularly in emerging markets, contributed to overall expansion.

Nowadays, the fashion industry began to recover from the pandemic-induced slump. However, the pace of recovery varied across different segments and markets. Some categories, such as activewear and casual apparel, witnessed a strong rebound as consumers prioritized comfort and versatility. The sales growth in the outlet sector in 2023 is a valuable indicator which showsthat the customers look more and more for the best price/quality ratio for their purchases. Businesses that provide value for money present more opportunities now.

Inflationary pressures can impact both sales volume and value in the fashion industry. Rising inflation may lead to increased production costs, which could be passed on to consumers in the form of higher prices. This could potentially dampen consumer demand, particularly for non-essential or discretionary items, thus affecting sales volumes.

How do you plan to develop in the coming years?

As developers in outlet retail and real-estate we recognize the importance of adaptability and agility to meet the constantly demanding consumers. Our focus is on understanding and meeting customer needs, regardless of the industry. Delivering what customers want is crucial for building loyalty and ensuring repeat business.

In the face of economic uncertainties, we aim to remain flexible, motivated, and innovative, and consider unique offerings such as shared working spaces, sports facilities, relaxation spots and other amenities to differentiate your projects. Leisure is an important aspect that we will add in the mix so that our developments remain relevant to our clients, but most importantly is to keep the brand & value offerings within our Centers at increasingly high standards. The main competitive advantage we have is the unique retail proposition of our Outlet Centers in Romania!

What are your estimates for online commerce in general in the coming years?

We clearly see an increasing preference for digital convenience; therefore, this segment is poised for more growth although is difficult to make precise forecasts. The convenience, accessibility, and wide range of choices offered by online shopping platforms continue to attract consumers globally.

Emerging economies, in particular, present significant opportunities for online retailers as internet penetration increases and consumer behavior shifts towards digital channels.

We haven’t introduced online sales in our FASHION HOUSE outlet schemes, but this is an opportunity that we will exploit to align trends and it will be important to adopt an omnichannel strategy soon.

On a medium term, innovations in technologies such as artificial intelligence, augmented reality, and virtual reality are expected to enhance the online shopping experience for more customers. Personalized recommendations, virtual try-on features, and interactive shopping experiences will become more prevalent, driving engagement and conversion rates.

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