New survey findings from Digital Commerce 360 reveal how retailers believe the coronavirus will impact their businessA new survey from Digital Commerce 360 taps into the mood of American business as the spread ov the virus continues. Visit here for more details.
The coronavirus, known as COVID-19, is bound to have many consequences for consumers, but for retailers, this is uncharted territory. In my lifetime, I have never experienced such a threat, so Digital Commerce 360 felt it was important to reach out to the retail community to learn more about what they are thinking and how they are addressing this within their organizations. Our findings suggest that most are cautious and taking some action, although it doesn’t appear that panic mode has set in. I hope and pray for everyone impacted. At the same time, I look forward to returning to normal and hope it comes sooner rather than later.
Almost half of retailers expect some downside revenue implications. It is important to note that retailers are realistic, as one in three believe it’s too early to say how the coronavirus will affect them regarding financial expectations.
Consumer confidence causes concern
42% of retailers cited that they have concerns about consumer confidence. It is the level of impact that is under discussion. The majority of retailers (58%) acknowledge there will be some impact on consumer confidence. To date, the others are evenly divided—22% believe it will be significant while the remaining 20% project limited or no impact.
There has been discussion that ecommerce might be the beneficiary of coronavirus, which may be the case. Our survey instead revealed a mixed bag of sentiments. Projecting upward gains are 38% of retailers, while almost the same foresee a downward trajectory (36%). The remaining 26% expect that their business will continue as projected.
Given the 24-hour news cycle, retailers certainly could have moved into panic mode since they’ve taken this survey. Only 20% of those surveyed are taking aggressive action. Instead, 44% of retailers are taking “some” action and anticipate additional actions will be forthcoming. 36% of the survey participants have a “wait and see” attitude. It will be interesting to see how this evolves in the weeks to come.
Much of the challenges retailers face in our interconnected world is supply chain-related. When asked, “Which of the following actions are you taking as a result of the coronavirus,” supply chain communication (48%), contingency planning (34%) and hopes to minimize disruptions (32%) top the list of retailer actions. Retailers are wisely monitoring the China situation (23%) and working with their partners to mitigate supply chain risks (22%). Adjustments to marketplace participation (22%) are also being made.
Inventory will certainly be a challenge as 44% of those surveyed expect production delays. Thinking further ahead, 40% believe there will be inventory shortages throughout the year. Product delays (44%), consumer confidence challenges (42%) and inventory shortages (40%) are expectations of retailers. This is an ideal time to collaborate with industry peers, according to 20% of retailers surveyed. As time marches on, 19% and likely more will reforecast future revenue.
Digital Commerce 360 conducted this survey of retailers during the week of March 2, 2020. The results are based on 304 responses.