Whether it be by category or by region, or even in some cases by brand, it is becoming increasingly clear that the return of offline retail is going to be staggered.
We dove into the recovery from a category level and analyzed some of the higher-level changes taking place.
The 30,000 Feet Perspective
To begin any analysis, context is key. And looking at offline visits for the week of May 11th through 17th, we see that a year-over-year analysis helps define the industries that have been hardest hit by the pandemic. Apparel and fitness are two strong examples, down 72% and 87% year over year respectively when looking at nationwide visits that week. While superstores like Target and Walmart and the grocery sector continue to show their strength with visits up 13% and 6% year-over-year.
However, the same perspective also shows that recovery is already in full swing. While the apparel sector may still be down, it is in the midst of a dramatic rebound with visits rising 104% week over week. This is clearly buoyed by stores and malls beginning to reopen. But other hard-hit areas are also showing signs of a return with the electronics and fitness spaces seeing jumps of 6% and 15% week over week.
And the trend here is positive as well. Looking at the apparel sector again shows that the pattern is gaining a degree of consistency with five weeks of week-over-week growth building into an early May that is providing a much-needed boost for the space.
Local Effects Matter
Local efforts and restrictions are also having a clear impact. Analyzing the same nationwide data compared to three other states shows the dramatic differences taking place across the country. States like Georgia and South Carolina, which reopened in early May, are seeing significantly lower declines, while California is feeling the hit much harder.
And while this is something that may be obvious conceptually, it does dictate critical differences in the strategic paths that a variety of brands and companies need to take. Whether it be focusing more on online efforts in specific locales, or utilizing a wider retail footprint to support a regional approach - the implications are significant.
Moving Forward
Category analysis helps provide a critical industry level viewpoint that can analyze a wider sector across regions and time periods. The result is a powerful capacity to look at the wider retail economy from a more birds eye view.
And the initial returns help to reinforce a concept that was heavily discussed early on in the pandemic - no crisis is a monolith. Different regions and sectors are impacted differently, creating strategic opportunities for some sectors while defining the key paths forward for others. In this case, while the retail recovery has clearly kicked off, the pace of change will dictate early winners and those that struggle more. The key factor for the latter group will be their pace of adaptation and the willingness to quickly experiment with new concepts to mitigate short term losses and increase the long term potential.
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