COVID-19 leaves retailers scrambling for customers
The coronavirus (COVID-19) is taking over all industries, making a huge negative impact on the retail market. Retailers are trying to gain more customers through online sales and promotions while there are little to no visitors in brack-and-mortar locations.
A couple of retailers including Vineyard Vines, Nike, and Macy’s are offering online steals with multiple deals in the hopes of enticing some customers through the COVID-19 pandemic.
Vineyard Vines is offering 30% off sitewide for their spring styles. Nike sent a promotional e-mail to its customers offering 25% sitewide discount code. The department store, Macy’s, is offering free shipping on purchases of a minimum $25 including beauty purchases, this deal is normally offered only to loyalty members.
The fitness company, SoulCycle, closed the doors to all their locations in response to the COVID-19 outbreak and are offering 75% off workout gear on their website. Other retailers are offering an extended return policy for in-store purchases due to the closing of stores including Sephora for 30 days after stores re-open and online policy for 60 days.
It’s been a trying time for us all—but as New Yorkers always do, we sure have come together to help each other.
The great people of @soulcycle wanted these latex gloves delivered to a local hospital & we happily made it so. Your community thanks you & we thank you! pic.twitter.com/K8Qmurbkei
— NYPD 19th Precinct (@NYPD19Pct) March 24, 2020
Brick-and-mortar locations are already suffering the loss of business with the rising popularity of e-commerce, resulting in many retailers closing more brick-and-mortar locations. Retailers are also going to be seeing a loss in upcoming promotional spring holidays including Mother’s Day, Easter, and Graduation. The retail sales of the U.S. consist of 90% of brick-and-mortar stores, with in-store retailers losing business on their biggest promotions.
The recommendation for social distancing and quarantining in the response to the COVID-19 outbreak is making matters even worse for the already decreasing business. This is leaving many retailers with the only option to offer online promotions and sales to entice more customers without the certainty the customers will come.
Many people are foregoing buying things they want and focusing on spending their money on what they need in this time of crisis such as medical supplies or treatment. Many retailers are offering free shipping and sending e-mail promotional offers.
Customers are also focusing more on buying essential items and ensuring they stay within budget as some customers face uncertain times through employment as the U.S. unemployment rate is expected to spike with more job cuts. The economic experts at Goldman Sachs are indicating this pandemic will result in a historical recession with the Q2 GDP sinking 24% along with the 6% decline in Q1.
This is leading to retailers trying to compensate or cover up the loss in business. J.C. Penney, Macy’s, Kohl’s, and Nordstrom withdrew their earnings outlooks. Other retailers are using credit lines to compensate for the loss in business including Signet Jewelers, Ulta, and TJ Maxx (owned by TJX).