It’s fair to say that our understanding of what amounts to good news has been transformed in the age of COVID-19.
That truth aside, in the world of retail, and ecommerce in particular, things are looking up, according to a wide-ranging discussion among retailers and industry experts during CommerceNext’s webinar, “Cautious Optimism: Data & Perspectives On Ecommerce After COVID.”
“Ecommerce seems to be improving,” said Sucharita Kodali, a Forrester vice president and principal analyst, noting that even struggling sectors were improving. “And what is even better news: It is improving also among apparel merchants. That gave me heart that there was definitely a turnaround and that companies were doing better than expected.”
OK, no one expected a banner year after the new coronavirus began to spread around the world and the World Health Organization declared a pandemic in early March. Governments instituted stay-at-home policies and regulations. All but essential brick-and-mortar stores closed. Unemployment rose.
A sizable number of retailers are doing better than expected
But a significant portion of retail is surviving and a surprisingly large portion is doing as well or better than expected before the virus changed everything, according to the CommerceNext survey data that Kodali presented.
- A significant number of retailers are doing better than they expected in the face of COVID-19, a CommerceNext survey shows.
- Ecommerce growth in the COVID-19 era is foreshadowing changes in shopping behavior that are likely to be permanent.
- Being prepared for the unexpected can make all the difference in times of crisis, whatever that crisis might be.
Nearly a third of retailers polled between March 29 and April 11 said they had increased their Q2 revenue forecasts. Another 19% had held their forecasts steady or only slightly decreased them. Moreover, only 6% of those surveyed at the time said they were less optimistic than the week before.
“I would say cautiously optimistic is definitely consistent with what we are seeing,” Brianna Walling Burwell, vice president of finance at home improvement brand Build.com, said during the panel-discussion segment of the webinar. “Our recent weeks are outperforming our previous forecast due to demand in the market.”
How retailers have updated their Q2 forecasts :
Burwell and Kodali joined ThirdLove’s Vice President of Marketing Rebecca Traverzo, CommerceNext Co-Founder Veronika Sonsev and Signifyd Vice President, Operations & Corporate Development J. Bennett for a data-driven snapshot of commerce in the midst of a pandemic.
The full webinar is available on demand, but let’s consider a few highlights.
Forrester’s Kodali covered the state of retail based on a survey of 113 retail professionals that covered the omnichannel strategies they are using to cope with closed physical stores, the changes in ecommerce traffic, revenue trends, inventory issues, discount and promotions practices and even top anxieties.
Signfidy’s Bennett took attendees through the ups and downs of ecommerce sales by time and by retail vertical, while pointing out trends he predicted will last in some form long after shelter-at-home and business restrictions are eased.
Bennett pointed out that ecommerce sales between the end of February and now have experienced “growth that is just staggering,” according to Signifyd data. Indeed, Signifyd’s Ecommerce Pulse data shows that online sales are up 46% since just before the World Health Organization declared a global pandemic.
COVID-19 could accelerate the shift to ecommerce by a year or more
That sort of growth, he said, is likely to accelerate the ongoing shift of retail from in-store sales to ecommerce sales by a year or two. Moreover, Signifyd is seeing a dramatic increase in first-time online shoppers, shoppers who have not transacted on Signifyd’s Commerce Network, a circuit of more than 10,000 merchants selling in more than 100 countries.
Those consumers are already showing a penchant to return to online merchants, a sign, Bennett said that some portion of those new shoppers are building a lasting habit.
While overall sales tell a promising story, the six weeks, or so, of COVID-19 lockdown have been a mixed picture for retailers depending on their vertical, their omnichannel readiness and their particular fulfillment processes, Bennett said. In fact, even particular verticals have experienced roller-coaster rides of very good weeks, followed by not-so-good weeks.
The story Bennett’s charts told of sales increases followed by dips followed by increases also charted the emotions and perceptions of consumers living through something that none of us have ever lived through before.
Early on, there was grocery and consumer packaged goods stockpiling, ultimately followed by a cooling off period. Shoppers bought up baby goods and pet supplies. Then they turned to making their homes more comfortable and functional.
Build.com’s Burwell saw the story play out in real time, toilet-paper anxiety and all.
“In the early weeks our overperformance was heavily influenced by COVID-related categories,” she said. “We saw bidets really outperform any type of history we’ve had in selling that product, as well as deep freezers closely following, as a product that just kind of took off and skyrocketed from a performance standpoint.”
As the stay-at-home era continued, Build.com saw more customers looking for items to complete home projects and “quick-fix, DIYs,” which makes sense given the amount of time consumers are spending in those homes.
Traverzo, of ThirdLove, said the women’s intimates brand has also seen a shift in consumers’ appetites over time, especially as stimulus checks from the federal government and disaster-relief loans became available.
“I think consumers are feeling a lot more confident and comfortable with the economy,” she said. “So they are starting to spend money, not only on what they need, but what they want.”
Some of the upbeat attitude that came through in the webinar likely traces back to a sense of pride that retailers have in being able to quickly and nimbly adapt to unprecedented circumstances in order to keep their businesses running.
“I think that the single biggest change has been how rapidly retailers are moving and how rapidly they’re realizing they can move,” Kodali said. “ I hope that that actually ends up being one of the great byproducts — speed. This is going to be huge for catching up after being put on pause for so long.”
Burwell of Build.com had a unique perspective on that — and how preparation positions a retailer to keep the business running when the unexpected and dramatic, and even tragic, upends operations.
Build.com’s headquarters is about 15 miles from where the 2018 Camp Fire raged in Northern California. The wildfire killed 86, destroyed more than 18,000 homes and buildings and burned more than 153,000 acres. The retailer absorbed some important lessons about business continuity in the face of disaster.
“We really learned a lot from that experience,” Burwell said. “Whatever your company is going through now and struggling with, it’s really an opportunity to learn and to grow and put things in place that will continue to allow your business to cope during a time like this. But also to get your teams and your people in the mindset of what’s to come — even beyond this.”
That’s important. And so is the sentiment behind the advice. “What’s to come.” A more normal world is coming. Things are looking up and they will get better. And commerce will continue on.
Photo by Getty Images
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