The world is going through a tectonic shift, right now. Even once we’re past the worst of the COVID-19 pandemic (and we’re just getting started), given the economic, political, and cultural changes resulting from this crisis, it will NOT be business as usual on the other side. We heard from many retailers that sharing information is especially critical at this time as the industry adapts to this new reality.
In the spirit of supporting each other, we thought it would be worthwhile to survey the 650+ brands and retailers we serve and share those insights back. We collaborated with Sucharita Kodali, VP & Principal Retail Analyst at Forrester, on this benchmark report — you can hear from her directly about some of the insights and actions to take in our video interview.
Here is an executive summary of the key findings:
Despite shelter-at-home orders being extended, retailers seem fairly optimistic about when things will get back to normal, with 40% of them expecting recovery by summer. Apparel retailers, who are among the hardest hit early on in this crisis, are more pessimistic, with 37% of them expecting it to take 6 months or longer compared to 23% of all retailers offering that estimate.
Not surprisingly, a number of retailers have adjusted their sales forecasts down to account for this period of virtual shutdown, 20% of them as steeply as 25% or more. Nearly half were still in the process of evaluation at the time of the survey. When we look at department stores and luxury retailers who rely heavily on physical interaction with their customers, we find that a full 50% are lowering their forecasts by 25% or more, reflecting the longer-term challenges they expect.
Of course with more people staying home (and likely wanting to avoid crowds even after we pass the peak of the pandemic) we all expect a marked shift to ecommerce. However, concerns about the counteractive force of layoffs, furloughs, and a severe economic slowdown which temper any potential upswing are reflected in the responses, with 50% only expecting ecommerce to fare somewhat better.
Retailers have been forced to be incredibly nimble to meet fast-changing government mandates and customer perception, primarily around store closures, increased safety procedures, and staffing challenges. At the time of the survey, 72% of respondents had already closed stores or reduced hours, and 42% of them had paused BOPIS (Buy Online, Pick Up In Store) and BORIS (Buy Online, Return In Store) services.
Around the time that California started sheltering-at-home, we saw a surge in online returns across our platform, as consumers who were no longer able to process returns in stores migrated online. Many of our retailers also adjusted their return policies to better support their customers in these shifting circumstances. According to the survey, 40% relaxed their policies with another 27% considering it.
Besides moving to a remote workforce and shuttering stores, many retailers have found creative ways to adapt to keep serving customers: