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How the Pandemic Will Change Buying

Survey results outline the need for new product, the state of in-person markets and the role digital tools will play going forward.

Will the pandemic change how retailers buy?

A new survey of the gift, home furnishings and apparel industries commissioned by International Market Centers (IMC) reveals that, while the Covid-19 crisis has significantly impacted all retail sales across the United States, store owners and operators are looking toward re-opening and recovery, expressing a near-term need for new product.

“Recovery is something that we must approach together as an industry,” says Bob Maricich, CEO of IMC. “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.”

In April 2020, Stax sent surveys to over 180,000 retailers and designers who have attended markets in Atlanta, High Point and Las Vegas in the past two years. Results of the buyer survey, which were statistically significant across industry, geography and sales channel, were consistent with supplier responses to a subsequent survey sent to 6,000+ IMC tenants and exhibitors.

Below are four key takeaways from the survey:

Impact of COVID-19 on Retail Buyers
As of April 30, approximately 70 percent of retailers reported they were temporarily closed across a majority or all of their stores. While online sales have shown resilience, in-store sales have significantly declined, with apparel and gift retailers the hardest hit. Furniture retailers have been most effective at recouping lost in-store sales via online channels.

With the substantial decline in sales, some 80 percent of retailers have implemented at least one cost reduction measure and/or deployed at least one promotion. Additionally, 70–80 percent of respondents have applied for government funding, with most applying to the Paycheck Protection Program from the Small Business Administration.

Retail Buyer Outlook
Once they re-open, around half of retailers expect to require inventory within the first four weeks, with all respondents indicating that they plan to buy within 18 weeks of re-opening. Sixty four percent of retailers expect sourcing to focus on core and best-selling products from vendors with whom they have a pre-existing relationship. Selection of vendors also will be influenced by incentives (extended terms, free freight and discounts) as well as immediacy of product availability.

Markets and Mitigants
Some 43 percent of respondents are expected to attend a market this summer. An additional 10-15 percent may be influenced to attend if risk mitigants overcome sensitivities. Retailers indicated their comfort levels in attending an in-person market and participating in market activities will increase over time and with the rollout of appropriate safety measures. The protective measures that will most increase their likelihood to attend in-person markets are sanitizer stations, enforced social distancing, showroom density limitations and mask requirements. Reasons cited by those planning not to attend included lack of comfort attending a market given the virus, limited budgets for travel and business closures.

Role of In-Person Markets and Digital Marketplaces
Despite a reduced level of comfort attending in the near-term, the survey was clear that physical markets are critical for retailers across all product categories. Digital tools, however, will likely play an important role as a complement to in-person markets as roughly half of retailers leverage them for sourcing or purchasing product today with that number expected to increase post-recovery.

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