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What the Fashion industry can pick up from the Gaming industry amidst COVID-19

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According to Fashion United, the Fashion industry was riding an enormous success the past decade with the market value at a whopping $406 billion. However, the tables soon turned with the dawn of COVID-19, and the global retail scene soon became one of the industries reeling the hardest from its impact. Depending on the duration a store closes, McKinsey has revealed that 75% of apparel and fashion companies could face challenges managing debt levels in the near future.


On the other hand, the global video game industry is thriving with the practice of social distancing becoming the “new norm”. Gaming now offers an engaging distraction for people at home craving for social interaction. Asian gaming giants Nintendo and Tencent both saw sales increases during the first quarter. The former sold almost half of its games digitally, a record that helped increase profits by 41%, while Tencent's year-on-year online games revenue increased by 31%. Analysis from GamesIndustry.biz also shows that sales across 50 key markets rose by 63%.


When comparing Fashion and Gaming, they are at opposite ends of the spectrum. Let’s take a deep dive into the commonalities of both sides and what the former can learn from the latter to tide through the Pandemic and restore its former glory.


Embracing Technology in Products

We are in an era of digitalization where consumers and businesses are brought to an online world at an accelerated pace due to COVID-19. With physical shops closing around the world, businesses are seeking to strengthen their online presence as a key to their survival through digital enablement.

Lesson 1: Companies should view state-of-the-art technology as an enabler for sales, revenue and competitive advantage rather than a possible risk. Progress in digital transformation allows them to explore new business models or new revenue streams

At Europe's largest games trade fair in Cologne, Gamescom, one can witness the ever-faster pace of innovation. The latest technological trends, hypes and games are presented to appeal to consumers senses. Technological interfaces like APIs or interconnected software systems are also a prerequisite for operational speed in product development, marketing and personalization in real-time. A personalized experience, highly interactive engagement and convenience in all shapes and forms have ingrained themselves as a critical part of consumers’ expectations in the gaming industry. In fact, these expectations have slowly spilt over to other industries, including the line of fashion.

Many large retail companies have made good progress in the digital transformation of their business models. However, it is not enough. Many businesses report that eCommerce sales are still flat compared to the same period last year.  Even retailers with higher online penetration, such as direct-to-consumer speciality-apparel players, face challenges as consumers pull back on discretionary spending. Companies that recognize the shift to retail digital transformation and take the initiative to further their digital strategies will be the ones that emerge stronger. Several notable cases are Lazada, Benefit Cosmetics, and Bazar adopting Augmented Reality (AR) and 3D technology to engage consumers with a personalized experience when shopping online.

Revisiting Marketing Strategies

The reality is that it is no longer enough to market the point of differentiation in one’s brand. While the quality of the product, as well as the ability to market the service, delivery and overall convenience, is still crucial, marketing strategies have to be agile to adapt to changing circumstances. The Pandemic is a prominent illustration. Same day delivery, curbside pick up, and buy online/pick up in-store have become table stakes and the competitive advantage derived from presenting these components becomes more important.

Lesson 2: Marketing strategies must create value for consumers and stakeholders. Organizations need to understand consumer’s changing behaviours to tweak their gameplay and ensure that these strategies capture value for themselves too.

The Gaming industry understands that ultra-high-end gaming is likely to remain popular but the emergence of services like Arcade (Apple) and Game Pass (Microsoft) serve to disrupt the trend by providing gamers with a large library of video games without the need for advanced and expensive software. In response, free-to-play models were developed, allowing developers to monetize without needed to convince consumers to make up-front purchases. Instead, they offer in-game upsell opportunities such as upgrades and expansion packs. With evidence showing that cheaper entertainment tends to prosper during recessions, these low-cost, high-value offerings are a serious way for the gaming industry to expand.

The Fashion industry consequently has to accelerate investments to enhance its marketing efforts. With the consumer shift online, businesses should consider enhancing their digital marketing strategies to build a stronger eCommerce presence but entice customers to visit physical stores when they reopen. Exploring partnerships with online marketplace providers or wholesale partners is another alternative. One recent example is Walmart’s partnership with ThredUp. The former is offering some 750,000 pre-owned clothing through the resale site. The partnership is a win for both, as bringing in used apparel drives foot traffic to stores, and the established retailers provide ThredUp with new customers. Similarly, the retailer has collaborated with Shopify. Walmart in recent years has evolved its strategy to stock more emerging and speciality brands on its shelves to match changing consumer tastes. The partnership with Shopify will broaden the visibility of smaller niche businesses to more than 120 million monthly visitors at Walmart.com, creating a better experience for merchants and consumers alike.

Overcoming Challenges with Compromises

COVID-19 has exposed the weaknesses of supply chains in businesses, with every industry experiencing negative supply shocks. How a business effectively moves away from supply chain bottleneck countries or companies will determine the speed and sustainability of their recovery.

Lesson 3: Companies should not depend on one external party when it comes to a crucial business process. Do not hesitate to make short-term compromises or be innovative to diversify the supply chain

For the wider gaming industry, the Pandemic has resulted in delays in the production of gaming hardware as factories around the world face supply chain interruptions. Pandemic-related delays have already been announced by game developers at Amazon, a Sony-owned studio and Square Enix. A loss of efficiency will also occur with more employees working remotely.  Nintendo has issued a warning that a situation of prolonged remote working will impact its processes, and the New York Times reports that developers as large as Sony, Amazon and Square Enix are facing difficulties. Some developers have found ways to adapt — albeit not without compromise. Gearbox Software, which makes the Borderlands series, has avoided delays on the deadline they had already committed to by deprioritizing certain projects, some of which are unannounced. 

Traditional retailers should thus rethink their smart supply network to match the new standards set by eCommerce and digital native players. Previous methods of reassessing inventory and segmenting stock in each category to assess the supply chain will not work any longer. New thinking and courage to step out from the old are required. There is a shift in focus towards flexible supply chains over low-cost ones with fashion companies looking to onshore or nearshore. Deloitte has broken down four key digital retail trends that retailers can consider when tackling supply chain challenges: urban fulfilment, inventory strategy, flexible network and data and technology adoption.

Preparing for a Post-COVID Era

The Pandemic has brought to light the importance of forward-thinking. Leaders should look beyond epidemiology and sales data when reshaping their ecosystems to prepare for the future. Instead, they should focus on becoming more customer-centric to avoid being crushed by unforeseen circumstances and competitors.

Lesson 4: Never rest on your laurels. Constantly reflect on your consumers’ experience and build your roadmap from there.

While the boom time has been celebrated, gaming industry leaders are sober when assessing the future. They recognize the accelerated shift towards the delivery of games via mobile and cloud-based platforms, seeing the potential in this distribution model. Google recently removed a $130 sign-up fee for its cloud gaming service, Stadia, hoping that the value offered will convince consumers to stay for the long-term.  The rising tide of video games over the past couple months has also buoyed esports with licensed video games of Major League Baseball, NBA, NFL, FIFA, Formula 1 and NASCAR being aired variously on Fox, Fox Sports, NBC, ESPN and ESPN2 during prime slots. Esports are subsequently seeking deeper investments from their sponsors so that their gains are sustainable. We see BMW announcing a deal to sponsor four esports organizations in the United States, the United Kingdom, Germany, South Korea, and China. Zenni, an eyewear company has also expanded its footprint by adding two new esports organizations in their current deal.

With permanent shifts in consumer shopping behaviour pushing more traffic and categories online, recent McKinsey research highlights that retailers could see broader adoption of eCommerce in previously underpenetrated categories (e.g. lingerie) and consumer segments (e.g. baby boomers). The Fashion industry could leverage this opportunity to revise channel-mix targets and investment allocation to give a greater share to online channels, gaining growth momentum through these channels while protecting brand equity. As more consumers are emphasizing quality over organic or all-natural ingredients, retailers can keep a close eye on this consumer base and determine what it means for their brand and strategies.


In conclusion, the biggest lesson out of the crisis is to focus on customers. Customers are the foundation of every business's success. Understanding customers ensures that one’s products and services attain greater satisfaction for them, increasing the long-term goal of repeat business.

If companies do not constantly develop or innovate further to meet clients needs, they must be prepared to face high customer churn. For instance,  PUBG has lost 50% of its players within half a year. The reasons for this are a lack of focus on the players (customers), unfixed bugs in the game and poor public communication with the players.

With accelerated digitization in our interdependent world today, businesses should thereby undertake the consumer-centric approach when charting their success to ensure business continuity. Those who do not prioritize their customers’ journeys and experience will have serious reputational ramifications that threaten their survival, even more than the virus itself. 

Ranise Teo is with the Business Development and Marketing team at Arcadier, a SaaS company that powers next generation marketplace ideas. You can follow Arcadier on TwitterFacebook and LinkedIn for more news and updates. 

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