FROM THE DESK OF DEBORAH WEINSWIG

What Will In-Store Shopping Look Like When Stores Reopen? Once physical stores are permitted to reopen in the US—and that date continues to slide as many states extend stay-at-home orders—what kinds of shopping options will be available to consumers? The “New York State on PAUSE” executive order closing all nonessential businesses was issued on March 22, and the absolute earliest date that stores can reopen has now been extended twice—to April 15 and most recently to May 15. US orders vary drastically state by state. For example, in contrast to New York, Georgia began reopening certain types of service businesses (such as barbers and other esthetic businesses) from April 24. Given that the coronavirus is unlikely to be vanquished on a global scale by mid-May, we expect consumers to remain extremely cautious about protecting themselves—and retailers to be cautious about the safety of their staff and customers. This means that retailers anxious to reopen stores and generate revenue may open gradually, in stages. It is likely that companies are honing plans based on multiple reopening scenarios. When stores do reopen, several new safety measures are possible: Social distancing: Stores that are currently open, such as grocery stores, drugstores and mass marketers, are enforcing this concept in several ways. Major retailers have placed markings on the floor leading to cashiers to help consumers keep the recommended safe distance of six feet from each other. Drug and grocery stores in New York City have a member of staff in front of store entrances to control the flow of shoppers and maintain a fixed number of visitors inside the store at any one time. Lines of customers waiting to gain entry can therefore be seen outside these stores, often stretching down the street or wrapping around the corner as each person stands the requisite six feet apart. Masks (and possibly gloves) for everyone: New York City has ordered its residents to wear masks on public transportation, in stores and where social distancing is not possible, such as on crowded sidewalks. The American public’s resistance to wearing masks seems to have finally been overcome, and an apparent majority now wears masks in these locations and around town—some people also wear gloves, although these are not required. Store employees, especially in grocery, are wearing masks and gloves as well. It is possible that wearing a mask has now become socially acceptable in the broader culture, as it is in Asia. While the coronavirus remains undefeated, wearing a mask may become an everyday habit. Temperature checks: It is commonplace to be required to pass through a thermal scanner or be scanned by a temperature gun at airports or store entrances in Asia. Installing temperature checks at store entrances in the US would reassure consumers that they are not standing in line next to someone with a raging fever and would minimize the risk that the coronavirus could be spread in store. However, these devices are notoriously unreliable and highly prone to user error, i.e., from holding them too close or too far from the forehead to get an accurate reading. Contactless payments: Generally, contactless payment is used to refer to payment via smartphone or NFC chip in a credit card, yet many retailers have adopted this term during the coronavirus crisis to mean “no longer accepting cash.” One fast-food vendor announced that it is returning cash change on sanitized trays and sanitizing payment terminals after every transaction as well as ensuring that cashiers do not handle food. Virus-free certificates or apps: In China, retail tech giants Alibaba and Tencent developed apps for their payment platforms—Alipay and WeChat Pay, respectively—to identify person’s quarantine status. The QR code system assigns one of three colours to the user based on their personal information and smartphone location data history: Green means that the user has unrestricted movement; yellow means that they should stay home for the next seven days; and red means they must stay home for two weeks. In the US, there has been discussion of implementing some kind of system to identify people that have recovered from the coronavirus, although there are concerns that such a certificate could lead to shunning or discrimination. BOPIS/BOPIM: As an early step, stores could partially reopen to fulfill “buy online, pick up in store” (BOPIS) or “buy online, pick up in mall” (BOPIM) orders. Implemented carefully, this could help avoid in-store crowding and may attract shoppers who are initially cautious about entering confined spaces with strangers that may have been in contact with the coronavirus. In-store shopping will eventually resume on a greater scale, but the process is likely to be markedly different until people can be protected against the coronavirus. Given consumers’ historical inclination to shop in physical stores, retailers are likely working hard to prepare measures and protections that will sufficiently reassure and encourage shoppers to enter stores again rather than shop online. [caption id="attachment_108297" align="aligncenter" width="700"] Source: Coresight Research[/caption]   While there may be a release of pent-up demand in discretionary retail following the crisis, much of the spending from the shutdown period will be lost permanently. Our estimates come with the caveat that we are early into this crisis, with an incrementally shifting view of the consumer environment. Click here to view Coresight Research’s ongoing coverage of the coronavirus outbreak, including links to our frequently updated coronavirus tracker and blog.

US RETAIL AND TECH HEADLINES

Macy’s Looks To Raise $5 Billion In Debt To Overcome the Coronavirus Crisis (April 21) CNBC.com

• Department-store chain Macy's reportedly intends to raise nearly $5 billion in debt to weather the coronavirus crisis. Macy’s may use its inventory as collateral to raise $3 billion and some of its real estate as collateral for the remaining funds.
• Although its digital business remains open, Macy’s has lost the majority of its sales due to store closures prompted by the coronavirus outbreak. A spokesperson stated that Macy’s has furloughed the majority of its workforce, suspended its quarterly dividend and taken additional measures to strengthen its financial position.

Lord & Taylor Considers Filing for Bankruptcy Protection (April 21) Reuters.com

• Department-store chain Lord & Taylor is reportedly considering filing for bankruptcy protection, as the coronavirus outbreak has caused the chain to temporarily close all of its 38 US stores. A spokesperson from parent company Le Tote stated that the company is seeking additional financing and is pursuing various options, including securing creditor protection.
• Fashion rental service Le Tote acquired Lord & Taylor from Hudson’s Bay Company for C$100 million ($71 million) in August 2019.

7-Eleven To Deliver Pizzas and Alcohol via Mobile App (April 20) Company press release

• Convenience chain 7-Eleven has announced that its customers can order wine, beer or liquor as well as hot or ready-to-bake whole pizzas via the 7NOW delivery app. The retailer is running a weekend $5 promotion on whole pizzas, limited to two pizzas, each Friday, Saturday and Sunday until May 17. Users can also have their order delivered for free in less than 30 minutes using a promotion code through May 31.
• The 7NOW delivery app serves nearly 35 million customers across 400 US cities, providing access to over 3,000 products they may need during the pandemic.

Fandango To Buy Vudu Video Streaming Service from Walmart (April 20) TheStreet.com

• Online ticketing company Fandango has agreed to purchase Walmart’s on-demand video-streaming service Vudu for an undisclosed sum. As part of the deal, Vudu will continue to power Walmart’s digital movie and TV store on Walmart.com, and customers will continue to have access to their TV and movie libraries.
• Walmart acquired Vudu in 2010 for $100 million and has over 14.5 million installations. The company provides video streaming to more than 100 million US homes, through smart TVs, Blu-ray players, game consoles and other streaming devices.

American Eagle Outfitters Appoints Mike Mathias as CFO (April 20) Company press release

• Apparel retailer American Eagle Outfitters (AEO) has appointed Mike Mathias as EVP and CFO, effective immediately. Mathias started his career with AEO in 1998 and most recently served as AEO’s SVP and Head of Financial Planning since 2017.
• Mathias will succeed AEOs current CFO Bob Madore. Madore will remain with the retailer in a senior advisory role through September 2020.

EUROPE RETAIL AND TECH HEADLINES

John Lewis Reports Online Sales Up 84%, Total Sales Down 17% (April 21) Company press release

• John Lewis department store has announced that its online sales were up 84% year over year since mid-March due to rising demand for products such as food preparation, wellness equipment and entertainment. John Lewis’s total sales were down 17% year over year since mid-March 2020 and decreased 7% year over year since January 26, 2020. Sales at its sister supermarket chain Waitrose were up 8% since January 26, 2020.
• Parent company the John Lewis Partnership stated that it is reducing its operating costs, negotiating with landlords regarding rent relief and working with banking partners for extra financial flexibility. It also confirmed that it has furloughed 14,000 employees and convinced board members to take a 20% pay cut for the next three months, starting from April 2020.

Boohoo Group Revenue and Profits Accelerate (April 21) Company press release

• Online fashion retailer Boohoo Group reported strong full-year results, as revenue climbed by 44% to £1.23 billion ($1.5 million)—marginally above guidance—while pre-tax profit increased by 54% to £92.2 million ($114 million). Boohoo’s sales recovered in April after a hit in March due to the coronavirus outbreak, benefitting from lockout trade while competitor stores remain closed.
• The company said it is exploring opportunities to acquire brands that have suffered due to the impact of the coronavirus lockdown, as its own profit and sales continue to grow. The retailer’s shares were up 6% in early trading, with its market value at £3.3 billion ($4 billion).

Associated British Foods Reports Sharp Fall in Profits (April 21) Company press release

• Associated British Foods (ABF) announced that its pretax profit slumped 41% year over year to £298 million ($366 million) from £515 million ($633 million) for the half year ended February 29, 2020. Exceptional costs increased to £309 million ($378 million) compared to £79 million ($97 million) in 2019, as ABF wrote off £284 million ($349 million) for goods delivered after Primark was forced to close all its stores in March due to the coronavirus pandemic.
• The trading update revealed that Primark sales have plunged from £650 million ($799 million) a month to zero as the retailer was forced to shut all of its stores due to the coronavirus crisis. On Monday, April 20, Primark committed to support its suppliers by agreeing to purchase additional products worth £370 million ($461 million), bringing the total stock worth to £2 billion ($2.5 billion) in stores, depots and in transit.

Vestiaire Collective Raises Funds To Expand Globall (April 21) RetailGazette.co.uk

• Pre-owned luxury online marketplace Vestiaire Collective has raised £51 million ($64.1 million) in funding from existing shareholders and new investors Korelya Capital backed by Korean conglomerate Naver. The funds will be used to accelerate the company’s international business.
• The Paris-based company intends to launch its direct-shipping service in the US and to expand its operations in Japan and Korea by end of this year.

Ted Baker To Launch Digital Pop-Up Store (April 21) ChargedRetail.co.uk

• Luxury fashion brand Ted Baker plans to launch its first-ever digital pop-up store, Ted’s Bazaar, on May 1, 2020. The pop-up store will feature limited-edition products such as beanies, mugs and t-shirts, with emojis and slogans showing support for key workers during the coronavirus crisis.
• The brand will donate 100% of its profits from the pop-up store to charity, with the first round planned to go to Magic Breakfast.

Mango Reopens Stores in Europe (April 20) FashionUnited.uk

• Spanish clothing retailer Mango has reopened 42 stores in Germany and a further 16 stores in the Netherlands this week. The retailer had already reopened 16 stores in the Netherlands and four stores in Austria, as local authorities had relaxed lockdown restrictions.
• Mango also plans to reopen an additional 27 stores across Cyprus, Czech Republic, Georgia, Latvia and Ukraine. Its 53 stores in other countries, including China, have also reopened during the past few weeks.

ASIA RETAIL AND TECH HEADLINES

Facebook Buys 9.99% Stake in Jio Platforms for ₹435.74 Billion (April 22) Company press release

• Facebook has invested ₹435.74 billion ($5.7 billion) into Jio Platforms, the digital services subsidiary of Indian conglomerate Reliance Industries, in return for a 9.99% equity stake in Jio Platforms on a fully diluted basis.
• At the same time, Jio Platforms, Reliance Retail and WhatsApp have signed an agreement to further boost Reliance Retail’s new online business JioMart and support small businesses on WhatsApp. The partnership will work closely to ensure that customers can access the nearest convenience stores that supply goods and services to their homes by transacting seamlessly with JioMart using WhatsApp.

Meitu Enables Retailers To Test Online Makeup Service amidst the Coronavirus Crisis (April 22) InsideRetail.Asia

• Chinese image-editing software Meitu has launched a limited-time, free, online makeup testing service called Cosmetic Promotion Assistant. The software is based on Meitu’s facial-recognition and image-processing technologies, and it offers online makeup trial services to global beauty enterprises and retailers, to help them overcome challenges due to the impact of the coronavirus.
• The service will recommend suitable colors and styles to users based on their facial features. The software generates a virtual makeup effect in less than one minute and also enables users to make purchases with multiple payment methods.

Arzoo Launches Retail-from-Home Concept (April 21) YourStory.com

• Indian retail-tech startup Arzoo.com has launched a “Retail-From-Home” concept for brick-and-mortar stores. The company stated that the new concept enables electronic retailers to sell their products to consumers amid the coronavirus lockdown, and Arzoo.com will deliver the ordered items on behalf of the retailer.
• The concept is integrated with Arzoo.com’s tech platform “Go Store,” which serves over 3,000 physical stores across cities in India, including Bengaluru, Chennai, Delhi-NCR and Hyderabad among others. The platform enables retailers to maintain a virtual inventory as well as market promotions and in-store offers.

Future Group Seeks Debt Relief from Lenders (April 21) CNBCTV18.com

• Indian conglomerate Future Group is reportedly seeking options to manage its debt, as it is unable to repay loans owing to the nationwide lockdown. The company has also initiated discussions with lenders to restructure its debt.
• The group is looking to avail credit under the COVID-19 emergency credit lines offered by various banks. It also plans to access a relief fund that was announced by the Reserve Bank of India on March 27.

Alibaba To Invest in Cloud Infrastructure (April 20) Reuters.com

• Alibaba has announced plans to invest ¥200 billion ($28 billion) in its cloud infrastructure and technologies over the next three years, owing to the rise in demand for business software amid the coronavirus outbreak. The company will spend the funds on cloud services, including semiconductor, operating systems and data center infrastructure.
• President of Alibaba Cloud Intelligence Jeff Zhang stated that the coronavirus pandemic has “posed a stress on the overall economy across sectors.” Alibaba hopes that its cloud infrastructure investment will help businesses to recover from the current crisis.