Post-Pandemic Apparel Industry: Strategies for Navigating New Challenges

Shifts in Consumer Behavior and Preferences

Consumer behavior has shifted significantly post-pandemic, with declines in brick-and-mortar traffic in key markets like Greater China (NKE). Companies are focusing on elevating consumer experiences and targeting higher-value consumers (RL), while also addressing choppiness in the consumer environment (LULU). Optimism remains among certain consumer segments, responding positively to diverse categories (URBN).

"Third, we experience meaningful shifts in consumer traffic in key markets, particularly in Greater China, where brick-and-mortar traffic declined as much as double digits versus the prior year." --- (NKE, earning call, 2024/Q4)

"We continued to elevate our consumer experiences, products, and storytelling, driving both our continued shift towards higher-value consumers and 28 consecutive quarters of AUR growth." --- (RL, earning call, 2024/Q4)

"Shifting now to the U.S. As we mentioned on our last call, we've seen a slower start to the year due to several internal factors, including missed opportunity in women's and bags, which we are actively addressing, and some ongoing choppiness in the consumer environment." --- (LULU, earning call, 2024/Q1)

"As we enter the second quarter, the Anthropologie consumer remains optimistic and continues to respond positively to a broad range of categories." --- (URBN, earning call, 2025/Q1)

"Over the past year, we've highlighted the strategic shifts we're taking as a company, including leadership and organization changes, kick-starting a multi-year innovation cycle, and creating capacity to invest in consumer-facing activities." --- (NKE, earning call, 2024/Q4)

Embracing Digital Transformation

Retailers like Target and Walmart are driving digital transformation in the apparel industry by enhancing digital growth, deepening digital engagement, and improving omnichannel fulfillment. These strategies include reducing digital fulfillment costs, improving efficiency, and enriching the digital shopping experience to mirror in-store discovery.

"And we certainly felt much better about the sequential improvement in traffic, getting back to positive digital growth for the first time in over a year, continued strength in services like Drive Up and categories like Beauty, and a very significant trend line improvement in apparel." --- (Target, earning call, 2025/Q1)

"And it's up 330 basis points in the year. Why because we're focusing on the things that really matter deepening digital engagement with our members 18% e-commerce growth and a third of our members are using Scan and Go now, which is really exciting." --- (Walmart, earning call, 2025/Q1)

"Our omnichannel fulfillment experience continues to improve with almost 60% of our packages delivered or available for pickup within one day, and 40% of our digital sales are picked-up in stores by our customers, with more than 90% of these orders available within just 30 minutes." --- (BBY, earning call, 2025/Q1)

"And while there's much more opportunity in front of us, the team is already making progress in reducing complexity on the apparel floor pad and the back rooms of our stores, reducing the cost of digital fulfillment while making our team more efficient overall." --- (TGT, earning call, 2025/Q1)

"We outlined changes to the digital experience and our focus on bringing the joy of discovery to the digital channel, just like we've done in our stores for years." --- (TGT, earning call, 2025/Q1)

Managing Supply Chain Disruptions

Apparel companies are addressing supply chain disruptions through various strategies. Hanesbrands Inc. highlights the negative impacts of factory closures and transportation delays, while also implementing segmentation and restructuring to improve efficiency. Nike focuses on managing marketplace supply and inventory proactively, and VF Corporation reports significant savings from headcount reductions and supply chain efficiencies.

"Disruptions to the global supply chain due to factory closures, port congestion, transportation delays as well as labor and container shortages may negatively impact product availability, revenue growth and gross margins." --- (HBI, sec filing, 2024/Q2)

"Most importantly, this includes timelines and pacing to manage marketplace supply of our classic footwear franchises, lower NIKE Digital growth, especially in the first half of the year due to lower traffic on fewer launches, plan declines of classic footwear franchises given Q4 trends, as well as reduced promotional activity, increased macro uncertainty, particularly in greater China, with uneven consumer trends continuing in EMEA and other markets around the world, and sell into wholesale partners as we scale product innovation and newness across the marketplace and finalize second half order books." --- (NKE, earning call, 2024/Q4)

"We delivered about $80 million in gross savings this year versus our target, including about $40 million in fiscal Q4, primarily driven by headcount reductions and supply chain savings." --- (VFC, earning call, 2024/Q4)

"We have segmented our supply chain, which has reduced lead times, improved efficiencies and reduced costs and most recently, we have begun implementing a significant restructuring and consolidation initiative to further simplify and reduce cost within our supply chain and corporate functions within the continuing operations to drive stronger operating performance and margin expansion." --- (HBI, sec filing, 2024/Q2)

"• Supply Chain Conditions: During the first nine months of fiscal 2024 and as of February 29, 2024, our inventory levels were healthy and reflected our proactive actions taken to manage our inventory supply." --- (NKE, sec filing, 2024/Q3)

Adjusting Pricing Strategies

Apparel companies like Ross Stores, Target, and TJX are focusing on offering more sharply priced brands and leveraging their buying power to provide better value. Target, in particular, is committed to maintaining competitive pricing to drive growth and meet long-term financial goals.

"Higher sales and lower incentive and distribution costs are expected to be partially offset by a decline in merchandise margin as we build on our efforts to offer more sharply priced brands." --- (ROST, earning call, 2025/Q1)

"Looking ahead, our team will deliver for our guests through lower prices, a seasonally relevant assortment, ease and convenience, as we keep investing in our strategy and efficiency initiatives to get back to growth and deliver on our longer-term financial goals. Guidance For the second quarter, the Company expects a 0 to 2 percent increase in its comparable sales, and GAAP and Adjusted EPS of $1.95 to $2.35." --- (TGT, press release, 2024/05/22)

"So, we're always monitoring that in addition to looking at the true numbers, but our customers perceive our values as extremely strong relative to competition, which I believe gives us a merchandise margin to your question, the ability to continue to leverage our pricing and our buying power." --- (TJX, earning call, 2025/Q1)

"It's not an opening price point strategy. It's a value strategy, but the values, let's say, we offer perhaps 4, a type of product or 1 of those 3 buckets, we may have sharpened so that the customer is getting an even better deal, an even better value." --- (ROST, earning call, 2025/Q1)

"Target routinely adjusts its prices to ensure it is competitive within the markets it does business." --- (TGT, press release, 2024/05/20)

Innovating Product Offerings

Ralph Lauren is focusing on elevating their product mix in wholesale and leveraging their broad-based lifestyle portfolio to resonate with diverse customers. Meanwhile, Lululemon is expanding their offerings with new technical solutions, showcasing innovative styles to meet evolving consumer demands.

"And so we expect that to continue through FY '25. That will have some pressure on units, but we feel good about where the product mix is going in wholesale, our focus on those top 100 doors, and our ability to elevate that experience and elevate our product offerings in wholesale." --- (RL, earning call, 2024/Q4)

"Our teams continue to expand our product offerings with new technical solutions, and I'm excited for you to see these new styles. Let's now take a look at men's. In quarter one, we continued to" --- (LULU, earning call, 2024/Q1)

"In addition to our powerful brand, Ralph Lauren has one of the most authentic, recognizable and broad-based portfolios of lifestyle offerings in the world, one that resonates across our diverse customer base and sets us apart from other brands." --- (RL, earning call, 2024/Q4)

"Our teams continue to expand our product offerings with new technical solutions, and I'm excited for you to see these new styles." --- (LULU, earning call, 2024/Q1)

Workforce Management and Adaptation

Respecting human rights, fostering diversity, and investing in technology are key strategies for workforce management and adaptation in the post-pandemic apparel industry. These approaches enhance productivity, improve training, and ensure employee wellbeing, ultimately driving profitability and operational efficiency.

"Our respect for human rights can create a motivated workforce that provides management with critical and timely information to reduce workplace accidents, improve relevant trainings and boost employee morale, thus enhancing productivity, profitability and ultimately shareholder value." --- (AMZN, event transcript, 2024/05/22)

"Being an African American woman with more than 15 years of retail management experience, I find it extremely difficult to advance within Walmart. Over the course of my 6 years at this corporation, I see less and less people who look like me, especially at the top, even though we make up a majority of Walmart's workforce." --- (WMT, event transcript, 2024/06/05)

"Although they make it look easy, managing in the current environment is anything but straightforward, and it is their passion and talent that allows us to drive great interactions with our guests to keep inventory lean and yet improve our in-stock positions and set us up quarter after quarter to help all families discover the joy of everyday life." --- (TGT, earning call, 2025/Q1)

"Clear and accessible policies and procedures are vital to ensuring organizations are equitably protecting all workers from safety risks. Psychological safety: Employee wellbeing at work is significantly influenced by a sense of belonging to the organization or team, with managers showing appreciation for their employees and involving them in decision-making." --- (AMZN, press release, 2024/06/10)

"We invest in technology and process improvements to increase productivity, manage inventory, and reduce costs, and we operate with discipline by managing expenses and optimizing the efficiency of how we work." --- (WMT, sec filing, 2025/Q1)