The data is in—and the numbers paint a stark picture of COVID-19’s crippling grip on American commerce, not just for brick and mortar but on digital retail as well.
In a dramatic look at how rapidly the global pandemic has infiltrated U.S. retail, about 80 percent of 90 brands—roughly 44 percent of which sell apparel—touted their February e-commerce business as “above plan,” with about 20 percent lagging their targets.
As the virus continued its unrelenting exodus from its Wuhan epicenter through Italian fashion capital Milan and now to the U.S., the outbreak sent commerce activity off a cliff in the first two weeks of March, according to data compiled by CommerceNext. Just 54 percent felt good about their March targets for the 1 st through the 14th—a two-week, 26-percent decline from the entire 30 days prior. Fashion giant and Zara owner Inditex documented a similar malaise, detailing a 24-percent plunge in March sales.
No surprise—the suffering in stores is even starker.
Physical-store footfall has plummeted 75 percent “since the COVID-19 crisis began in mid-February,” brands said, and just roughly 10 percent bucked the trend by claiming they’ve seen brick-and-mortar traffic improve. As mandates issued by federal and local governments and the Centers for Disease Control and Prevention have forced retailers to put most stores out of commission for two weeks at minimum, many are pinning their hopes on housebound consumers with little to do but idly shop online.
Though it’s still early days for America’s unofficial quarantine, the data throws cold water on that thinking.
Not quite two-thirds (about 65 percent) of survey-takers that operate in both channels say they haven’t seen an uptick in activity online in the wake of their stores shutting down, dashing nascent hopes that clicks can support bricks through a time of unprecedented upheaval.
And given how quickly the spread of the new coronavirus has obsolesced retail’s best-laid plans, many merchants are moving swiftly to adjust expectations. More than half (about 54 percent) have already revised their forecasts by a lot or a little, while about one-quarter maintained their plans. More than 11 percent have yet to take any action.
Respondents confirmed the now-painful truth that supply chains have become inextricably embroiled in the outbreak’s disruption. Just 16 percent claim coronavirus has had “no impact” on their ability to fulfill demand; 11 percent describe the fallout as “significant,” with the balance documenting some degree of impact.
Though no one has written the playbook for navigating out of the global crisis, brands polled by the digital retail conference organizer are fervently searching for solutions.
Some are seeking to cut costs across the board, while others have pruned store hours (if they haven’t closed outright) and are promoting click-and-collect capabilities instead. Additional respondents say they’re brainstorming “creative ways” to drive sales and keep top-line revenue goals on track.
Many struggle to remain respectful of workers’ needs and well-being while the pandemic pummels their business. Some described their chief concerns as shutting down stores and distribution centers that require on-site personnel, while others fretted over anxieties like paring hourly workers’ schedules—even though demand remains unchanged.
CommerceNext plans to detail the full results of the Impact of COVID-19 on E-Commerce survey in a March 25 webinar, featuring Clarks senior vice president of e-commerce Chris Hardisty and Barkha Saxena, the chief data officer for peer-to-peer resale marketplace platform Poshmark.