A just-released report by market research firm Forrester and retail solution platform Narvar detailed high-level findings in the retail space, and focused on how brands are adjusting their strategies during the coronavirus pandemic.
The main takeaway? Retailers are concerned that e-commerce will not make up for the huge drops in their in-store sales, according to the report.
In its survey of 99 brands, 58 percent of retailers predict that shopping activity and behavior will return to normal in a relatively wide range of time: three months to one year. This realization “forced retailers to adjust their overall sales forecasts,” the report said, as more than 20 percent of retailers have already lowered sales forecasts by 25 percent. Meanwhile, department stores and luxury brands “are more discouraged,” with 50 percent of those segments lowering sales forecasts by 25 percent or more, all according to the report.
Half of survey respondents were omnichannel retailers with brick-and-mortar stores that will likely be “impacted the most,” the report noted, adding that the challenge to regain revenue and “salvage” transactions without a physical presence is an enduring and difficult struggle.
Tactics that work, though, include localized offerings, such as 5 percent of respondents offering same-day delivery and providing curbside pickup options – but the majority, 68 percent of brands surveyed, are without the requisite infrastructure to support said operations.
Losses are largely due to store closures: 72 percent of retailers have already closed their stores and reduced working hours – without a plan to reopen, as of yet.
And the idea of retailers making up losses via e-commerce is, unfortunately, more idealistic than realistic. “Retailers’ confidence in e-commerce is limited, with 48 percent of retailers not planning to reallocate resources to e-commerce operations and 50 percent of retailers thinking e-commerce would fare only a little better than the rest of the business, indicating that there will be significant declines,” author of the report stated.
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