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Retailers in Crisis Aren’t Switching Strategies to Court Shoppers

While shopper demand has been subdued in recent weeks, retailers may not be doing enough to court the consumers who are interested in buying.

According to new data from Forrester and Narvar, most companies are downgrading their sales forecasts due to the COVID-19 crisis and its impact on consumer appetites. But a hesitancy to aggressively pursue contingency plans in the wake of store shutdowns could mean they’re leaving money on the table.

Thirty percent of respondents said they’d seen a reduction in store hours or had closed brick-and-mortar operations entirely, and because of this reality, 38 percent of retailers said they were lowering their overall sales forecasts by between 5 percent and 25 percent.

But while store closures have eliminated touch points like in-store pickups and returns, few retailers have adjusted by offering other services like curbside pickups or expanded e-commerce offerings.

Half of the retailers surveyed said they thought the online sides of their businesses would see more favorable results than their stores, and 20 percent thought e-commerce would do “much better” than brick-and-mortar.

Still, 48 percent of retailers have “no changes planned” when it came to reallocating resources to e-commerce, or hiring employees to man those operations. Just 23 percent of respondents said they planned to shift staff or funding to online channels.

With three-quarters of retailers saying they believe the crisis will last somewhere between 30 days and six months, and 68 percent also saying they aren’t offering any omnichannel services—like same-day delivery, curbside pickup or ordering via email or social from local stores—it’s unclear where they believe their 2020 revenue will be coming from.

At 72 percent, the vast majority of retailers are not even sure whether there are fulfillment delays in their supply chains, and those that have seen delays, 28 percent, largely describe those backups—seen in both distribution systems and delivery—as lasting between just one and three days.

While 53 percent of respondents said they were actively communicating delays to shoppers via email or text, in many cases the delays are caused by the retailers themselves, Forrester and Narvar analysts said.

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Twenty-eight percent of retailers have laid off staff due to changes in their businesses, but 32 percent also are facing challenges staffing their distribution centers and getting orders out the door.

About one-fifth of retailers did say they had run into trouble staffing contact centers due to workers calling in sick or finding themselves unable to get to work, but 32 percent also said they’d solved that issue by routing calls to contact center staff at their homes.

Of all retailers surveyed, just 12 percent said they were consistently running out of stock, leaving the vast majority with salable goods stockpiled and gathering dust in their warehouses, distribution centers and stockrooms.

While many of the products said to be in high demand were obvious contenders—like emergency prep supplies, masks and hygienic goods—retailers also cited athletic footwear as an unexpectedly popular category.

The majority of respondents (77 percent) said they had altered their marketing campaigns in recent weeks to reflect consumer sentiment, indicating that most retailers are still spending time and money on reaching and retaining shoppers.

But with just 32 percent of retailers facilitating strategies to get goods from their stores to consumers, and only 23 percent planning to shift staff or funding to online channels, it’s possible that shoppers with the means and motives to buy will end up disappointed.