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Since when the Covid-19 pandemic started, emerging small brands faced really had times between delayed payments, cancelled orders, unsold stock and early sales. This crisis is not yet finished and there is uncertainty about when is going to end. Is now time for retailers to pivot away from wholesale and invest more on new ways of marketing and a more independent status in order to survive the crisis.

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The pandemic hit big retailers like Nordstrom, which cancelled orders, delayed its vendors payments and is planning to shut down 16 stores. Others like Bergdorf Goodman and Mytheresa filed for Chapter 11 bankruptcy protection in early May. The US Department of Commerce declared that in March sales of clothes and accessories fell by more than half and that in April was even worse is the US.

The big crisis that hit these big retailers only have worse consequences on those small retailers, like Hung La, who co-founded the label with Léa Dickely, who own businesses which are mainly linked to wholesale channels. 

Dickely declared that the effect of Covid-19 had a serious impact on her business as they lost several partners and there are still unpaid invoices in the brand’s books.“It’s an uncertain moment for emerging brands, and lots of retailers have reacted to the insecure future by cutting their budgets for new brands” she said. 

M. A. Cohen, director of retail studies at Columbia University's Business School affirmed that young brands have to be very cautious in looking for support, as many of those large retailers are now having lots of financial problems and lots are shutting down. In this time, where we are surrounded by uncertainty, is not even possible to predict an end for this pandemic, so it is not possible to say when this crisis will be over.

On the other hand, the pandemic is also offering young brands a unique opportunity to free themselves from the overwhelming and unrealistic demand and pressure that big retailers bear down on them though their buying power, by finding new ways of doing marketing.

Brands like Chopova Lowena, known for its recognisable pleated skirts made from fabrics and craftspeople in Bulgaria, found a new way of doing marketing showing clothes privately and using street-style stars photos to promote the brand. In this way it became more independent, after every retail partner that was supposed to take on the brand this season pulled out.

Nowadays, as Steve Dennis, a strategic retail advisor said, is more important to be unique by finding an audience that loves what you showcase and what you do and that wants to share the story of your brand.

Loyal customers are the key to maintain a business alive in these hard times. What each retailer should do is widen it customer basis by providing a good service in order for customers to willing to return, in this way retailer become more independent and increase their brand awareness.

By Alice Del Rossi

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