With the exception of grocery stores, retail is set to be one of the hardest-hit sectors on the other side of the pandemic. While large publicly traded retailers will be hit as well, they are better prepared and have the means to navigate downturns—independent retailers are already struggling. NuORDER surveyed 2,100 retailers, most of whom are operating only one brick-and-mortar location, with the majority being fashion-focused.
“What was clear as day from the research was, retailers are going to need more time to pay, there’s going to be a cash gap between what a brand is foreseeing and what the retailer can pay,” NuORDER founder Heath Wells told Fashionista. His advice to brands? “Can you get credit from your factory? Can you tap into some credit lines? Can you quickly organize other credit facilities? It’s about [getting] creative between now and then, and being flexible with those retailers is going to be very important.”
- 50% predicted revenue impact of annual sales if things persist for six months.
- 25-50% reported overall reduction to future buys for next season.
- 63% of retailers are reporting to cancel on-order (yet-to-arrive) products.
- 43% of stores are closed or are in the process of closing all locations.
- Stores project a 25% decrease in sales in 3 months and a 50% decrease in sales in six months.
- A majority of retailers expect to reduce their buys by 20-50% for next season.
- Retailers’ top priorities are: increase online (28%), cut operating expenses (26%), reduce inventory (23%), sell existing inventory at a discount (18%).
- The financial relationship between vendors and retailers is more important than ever—suggestions are: extend credit terms (52%), reduce or cancel deliveries (27%), delay deliveries (10%), digital support via co-ops/social media (7%).
- The majority of retailers are expecting to pay invoices in 60-90 days.
The glass-half-full perspective is that brands selling online before the current pandemic may not be surprised, but many others who only utilized online as a convenience to consumers are seeing a huge uptick in sales. Data technology platform PriceSpider reports it’s already seen an 86% hike in online sales for beauty and health products. This will likely climb higher as more cities and states order the closure of salons.
Photo: Jason Briscoe via Unsplash