3. RETAIL INTRODUCTION Physical retail and online retail have taken dramatically different paths during the pandemic. Wellestablished chains like Brooks Brothers, GNC, J. Crew, and Neiman Marcus have all made Chapter 11 filings, while Amazon, eBay, Walmart, and Target reported record sales. And then there are product types, disinfecting wipes on one hand, and dress shirts on another—the pandemic has had drastically different effects on individual product categories. Books, though not officially an “essential good,” have performed strongly through nearly a year of the pandemic. But bookstores have not. As we question also in the separate section on bookstores, how might they perform after the vaccine has been widely administered? Moving into 2021, what do the broader trends in retailing suggest about bookselling in a post-COVID world?
THE IMPACT OF COVID-19 ON RETAIL (i) The data Retail sales are only slightly changed so far this year, measured against all sectors. But the broad picture needs to be dissected. There have been huge swings month-to-month. April sales were down 14.7% from March, but were followed by an 18.3% jump in May.1 November retail sales dropped 1.1% from October, but were up 4.1% from November 2019.2 40 U.S. retailers have filed for Chapter 11 since the pandemic started forcing shutdowns in March. More than 8,600 stores have closed this year.3 Are things looking up? Certainly the arrival of the vaccine(s) has altered the mood. But the stillincreasing case rate cloud the picture. The holiday season normally accounts for roughly 20% of the retail industry’s annual sales.3 In the U.S. they rose 2.4% between November 1 and Christmas Eve compared with the same period last year. But most of those were online.4 (ii) The continuing shift to online spend E-commerce represented 11.3% of retail sales at the end of 2019. In Q1 2020 it climbed modestly to 11.8%. By the end of Q3 it stood at 13.5%, an increase of 36.7% from the third quarter of 2019. 5 As Accenture noted, in a theme repeated elsewhere in this report, online retail “has seen 10 years of growth in a matter of months.”6 The big question is whether the increased shift to e-commerce will hold once the outbreak subsides. Moody’s retail analyst team is projecting online sales to “shoot above” 25% of all retail sales over the next five years.7 International research by consultants Oliver Wyman indicates that “up to a third of grocery customers who began online shopping in response to the virus have a desire to continue shopping online even after the pandemic passes.” The research also suggests that consumer behavior in other industries,
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