A survey of the gift, home furnishings and apparel industries commissioned by International Market Centers has determined that, although the COVID-19 crisis has affected all retail sales across the U.S., store owners and operators are looking toward reopening and recovery, and expressing a near-term need for new products.
Survey respondents also reported an intention to source product at physical markets provided reasonable safety protocols are implemented. They also indicated that digital tools will likely play an important role as a complement to in-person markets during the coronavirus recovery period.
The company engaged Stax Inc., a global strategy consulting firm, to provide a real-time representation of retail buyers’ perspectives during the COVID-19 crisis. In April, Stax sent surveys to more than 180,000 retailers and designers who have attended markets in Atlanta, High Point and Las Vegas over the past two years. Results of the buyer survey were statistically significant across industry, geography and sales channel, IMC maintained, consistent with supplier responses to a subsequent survey sent to more than 6,000 IMC tenants and exhibitors.
The survey yielded four key take-aways, IMC noted:
- COVID-19’s business impact has forced a variety of cost-cutting measures and prompted additional promotional activity.
- Most retailers expressed a need for inventory input in the near-term from 30 to 60 days with a focus on core products and vendors.
- Buyers and sellers surveyed stated generally that in-person markets remain critical even as comfort levels related to travel and market attendance have been increasing over time and with new protective measures.
- Digital tools will play an increasingly important role complementing in-person markets during the COVID-19 recovery period.
As of April 30, amidst coronavirus-related movement and shopping restrictions, about 70% of retailers reported that they were temporarily closed across a majority or all of their stores. Although online sales provided resilience, in-store sales significantly declined, with apparel and gift retailers the hardest hit. Furniture retailers proved most effective at recouping lost in-store sales via online channels.
Given the sales decline, 80% of retailers implemented at least one cost reduction measure and/or deployed at least one promotion. To bolster business, 70% to 80% of respondents revealed that they had applied for government funding, with most applying to the Paycheck Protection Program from the U.S. Small Business Administration. Once they reopen, around half of retailers indicated that they would require inventory within the first four weeks of renewed operation, with all respondents indicating that they plan to buy within 18 weeks of reopening. As they restock, 64% of retailers expected sourcing to focus on core and best-selling products from vendors with whom they have a pre-existing relationship.
At the same time, 43% of respondents expressed an expectation of attending a market this summer. An additional 10% to15% might attend if risk mitigation overcomes their sensitivities related to attendance. Retailer responses in the study indicated that comfort levels as regards attendance at an in-person market and participation in market activities will increase over time and with the rollout of appropriate safety measures. The protective measures that will most increase the likelihood to attend in-person markets are sanitizer stations, enforced social distancing, showroom density limitations and mask requirements. Those planning not to attend a market pointed to factors including lack of comfort attending such an event given the virus, limited budgets for travel and business closures as reasons for their reluctance.
Despite a reduced level of comfort attending in the near-term, the survey demonstrated that physical markets are critical for retailers across all product categories. Still, digital tools will be important going forward, as roughly half of retailers leverage them for sourcing or purchasing product today, with that number expected to increase post-recovery.
Guided by data from the survey, as well as guidelines for reopening set by local and state authorities, IMC updated its summer market dates and formats, and has shifted all at-market seminars and programming onto digital market channels in the near term. It also has introduced rigorous new health and safety measures for its campuses in Atlanta, High Point and Las Vegas.
“We encourage all of the entities involved in our markets to dig into this information,” said Bob Maricich, IMC CEO. “For manufacturers and sales organizations, it will help them understand today’s buying environment and how to prepare to host their customers at markets this year. For retailers and designers, this data shows that they are not alone in their current, difficult situations. For the vendors, hotels, transportation providers and logistic managers who participate in our markets, it sets expectations for markets for the remainder of the year. Together, with the right preparation, we can overcome this challenging time together.”
As coronavirus-related restrictions begin rolling back, Maricich said, recovery is an effort “we must approach together as an industry. We are thankful to our retail and design communities for participating in this survey and sharing details about their businesses, attitudes and preferences so we can better plan for the future. We have used this data to inform our decisions about timing and format for our markets, and hope that this information can help the entire industry begin the process of recovery.”