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Retail’s Soft Launch Tests Economic Reboot: The Week Ahead

This weekend will test whether American consumers are actually willing to head to the shopping malls and retail stores that have decided to reopen their doors in states lifting or relaxing coronavirus lockdowns.

The idea of restarting the American economy has not come without criticism. President Trump has made it clear that he wants a restart, even as critics fire back that his aim is politically motivated. Doctors on the coronavirus task force last month unveiled a phased plan for the economic recovery, hinting that the restart would be slow-going. Other health experts warn that jumping in too fast runs the risk of a rise in infections on top of a potential second wave. Even more disconcerting is that there’s still no conclusive answer on whether those who have recovered have any immunity from another bout of the virus.

Compounding questions of consumer demand: one in six Americans, or 30.3 million, have now applied for first-time unemployment benefits since mid-March, when non-essential businesses followed shelter-in-places orders requiring widespread shutdowns. Retailers have furloughed workers, and reinvigorating parts of the economy in areas that haven’t been as badly impacted might also introduce some much-needed job relief for scores of Americans.

Simon Property Group is doing just that by opening 49 malls starting Friday where state and local governments have eased stay-at-home restrictions. The largest mall operator in the U.S. has also seen its operations suffer from the virus as many store tenants are not meeting their rent obligations and are seeking to renegotiate their leases.

The problem is how to open while meeting governmental mandates for health and safety and enforcing social distancing measures.

The set standard at the very least seems to be to include keeping people six feet apart for social distancing, having sanitizing stations throughout an area and minimizing the people density inside those areas.

An American economic restart begins as the retail sector does a limited soft opening test to gauge consumer appetite to shop at malls.

Amy Senter, owner of Jake’s on Main, folds T-shirts in preparation for reopening her shop after being forced to close due to the coronavirus, in St. Charles, Mo. Business in some parts of Missouri will be allowed to reopen on Monday after the state’s stay-at-home order expires with Senter opting for a “soft” reopening by only people with appointments to enter her store at first to help determine whether it is safe to open fully.

Home décor superstore At Home, which reopened about 50 percent of its stores on Friday, added additional safety measures to protect store associates and guests. It is routinely disinfecting high-touch areas such as shopping carts, credit card readers and checkout areas, and placing reminders throughout its stores to maintain a distance of “two carts apart.” It’s also placing spacing indicators “10 feet apart for check-out lines and registers,” the company said, adding that it is installing plexiglass barriers at registers.

Chico’s FAS Inc. said on Wednesday that it will start a three-step phase-in of store reopenings, noting that it has the advantage of having many stores in shopping centers, or strip malls, where it can push out a new service for contactless, curbside delivery. Tapestry Inc.‘s CEO Jide Zeitlin said the accessible luxury firm will also use that option for stores with a street-side entrance and storefront pickup for those inside malls.

Curbside delivery could become the new retail buzz phrase. Data from CommerceHub indicates that 59 percent of consumers will be more likely to use curbside delivery following the coronavirus outbreak, while 75 percent of those who subscribe to multiple delivery services, including Amazon Prime, will likely opt for curbside delivery once the pandemic subsides.

Macy’s Inc.‘s CEO Jeff Gennette said Thursday that he expects “modest sales” when some stores reopen on Monday, and ultimately the company would become a much “smaller” firm by sales volume compared to the past. That said, stores are expected to drive just 20 percent, or one-fifth, of sales volume they would typically generate. And that is even with enhanced safety and cleaning measures on top of protective safety plexiglass installations at points of sale where social distancing will be difficult.

But will it be enough to get consumers into the store again? Gennette said he will know more come Tuesday.

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