Post-Pandemic Look: How Retailers Respond To Coronavirus Impact

During the current pandemic, most retailers have learned many lessons on how to survive. They have learned to communicate with their customers in new ways and have optimized the e-commerce channel to serve them. In a recent study, 96% of the respondents in a Glossy survey indicate they have indeed made these kinds of changes. During a recent talk, Wine’s co-founder Brian Smith said that this is an opportunity to meet customers where they are – at home, on her phone or some other mobile device.

In my last blog (Albertsons, May 3, 2020), I described the increase of on-line business this grocer had in March and April as the pandemic coronavirus COVID-19 became a reality. During that two-month period, Albertsons reported a 243% increase in its e-commerce business. This huge increase of internet business is indicative of what most food retailers enjoyed during the pandemic scourge. Traditional retailers who shifted to on-line business are likely to also show huge increases in sales through this channel. Certainly, I expect major on-line gains for all chain stores, food, and specialty retailers. It will become evident when stores report first quarter sales and earnings at the end of May or early June.

These major on-line increases were not anticipated and needed extra service. People had to be hired or shifted to fill the orders that the stores have received. As a result, stores have had to make all sorts of staffing adjustments during this pandemic period. That new study by Glossy states that 32% of the respondents have temporarily furloughed their store staff, while 30% have shifted their store staff to service customers on-line. Another 30% have shifted their store associates to support on-line to be stylists and sell. So, 62% of associates are redeployed, sitting at home or with social distancing in phone centers to take care of customers. An additional 6% of the employees were laid off permanently from  store staffs.  The survey also informs us that 23% of retail companies are renegotiating store leases, 18% are closing store locations, and 2% are breaking store leases. While all of it was foreseeable as this pandemic raged on, none of it is comforting.

I expect that most retailers will tell us that some of their home furnishings merchandise, home appliances and athletic clothing sold quite well over the internet. In contrast, fashion apparel and graduation apparel (for men and women) lagged way behind since schools are closed and graduations were mostly cancelled.

I am told that Macy’s and Bloomingdale’s opened their stores in Atlanta on Monday. They will open further stores next Monday in Orlando and other cities. Because of Mother’s Day and the pent-up demand, people were waiting outside the stores at the opening. However, overall business was scant according to The Atlanta Journal-Constitution and the reporter counted four cars in the parking lot of Lenox Square about 4 pm. It did not help that North Georgia (Albany) reported a new outbreak of the coronavirus COVID-19, which undoubtedly scared potential customers – except the Governor of the State of Georgia.

Specifically, in Atlanta, Lenox Square had few customers but many security guards that handed out gloves and masks. The food court was “mostly deserted” with just a few eateries open and several tables marked with blue tape so that they could not be used. Phillips Mall felt like a ghost town, according to the press, with a few high-end retailers like Gucci and Tom Ford opening their doors but restricting the number of people that could go inside. At the Mall of Georgia, in Buford Ga., most of the shops did not choose to open. Perimeter Mall, North Point Mall, and Cumberland Mall are slated to open on Tuesday May 5, so I do not have any report about their activity yet. However, Bloomingdale’s indicated to me that they had 164 people waiting at their Atlanta store door for the opening on Monday (with social distancing) and they had a good first day. As I indicated before, Mother’s Day is this coming Sunday and probably a key reason for shopping.

So far, the reopening is a mixed bag. Malls are open but few of the stores seemed to have opened at the same time. Many customers are scared as they view the coronavirus as the invisible enemy lurking everywhere. The North East, (Pennsylvania to Massachusetts) is likely to not reopen until late June or July. One can only hope that, despite dire predictions, we will not have a second or third wave of the pandemic. Hopefully, we will have a medical solutions to build back much needed customer confidence.