COVID-19 Impact on Retail: A Thinning of the Herd? 

Jane Hali, ceo of her namesake firm, said the COVID-19 pandemic accelerated the retail industry's troubled path.

 

Published July 17, 2020

By Arthur Zaczkiewicz

In its latest retail investment research report, Jane Hali & Associates LLC said the COVID-19 pandemic “quickly altered the retail landscape with store closures and consumers adapting to a new lifestyle.”

Indeed, it’s been a painful time for many companies, which are permanently closing stores, laying off employees and filing for bankruptcy while consumers embrace online shopping as never before. But Jane Hali & Associates said the retail industry was already in a tough spot prior to the outbreak. The firm said it “continues to believe that COVID-19 only accelerated the state of the retail landscape before the pandemic.”

Jane Hali, chief executive officer of her namesake firm, also cited some key trends to watch, such as the continued strength of the resale market, the impact of the Black Lives Matter movement and the consumer demand for buy online, pick up in store (and curbside pickup).

Regarding social justice protests, Hali said the Black Lives Matter movement has “enforced transparency of diversity across companies.”

“As consumers have protested across the globe, they are closely watching the companies they purchase from,” she said. “The Instagram movement #PullUpOrShutUp, was launched [June 3] and has convinced more than 200 companies, including Estée Lauder, Glossier and Levi’s, to release how many Black employees they have and how they will commit to improving.”

Retail brands that can leverage success from this trend include Ulta Beauty, Lululemon, VF Corp., Target and Walmart, among others.

In regard to the resale market, Hali said she sees it “growing in this COVID-19 climate” and said that in a recession, “shoppers consider used items which at times are a better deal than perpetual promotions.” Reselling fashion apparel and accessories also “leads to extra cash.”

Other notable trends include the importance of digital shopping. Even as stores reopen, Hali said “online sales (mobile, desktop and social) will continue to accelerate. Most companies reported an acceleration in April, with online sales continuing to outpace through May/June.”

Hali said companies experiencing triple-digit increases in online sales include Lululemon, Urban Outfitters, Footlocker and Gap Inc., among others. She also noted that omnichannel strategies “will continue to be important for retailers” and believes “ship-from-store will be key for retailers to keep inventory flowing and expedite the product to the consumer.”

 

The research report also said the ongoing demand for “convenience options such as curbside pickup and accelerated at-home delivery-same-day options” will continue for some time.

Like our news? Why not try a free 4-week trial to our weeklyresearch newsletter- gain access now.

© 2020 JHA Jane Hali & Associates, Investment Research

561-288-0675   |   1001 Yamato Road, Suite 302 • Boca Raton • Florida 33487