The COVID-19 pandemic is a double-edged sword, wreaking havoc not only on our health but also on our economic well-being. While some retailers are experiencing record sales, many more have come to a near standstill. Understandably so, future uncertainty has driven most consumers to become extremely conservative financially and quickly reduce normal consumption of most discretionary goods — and some non-discretionary too. This is especially evident as unemployment claims continue to skyrocket in the US and around the world.

The result is utter devastation to the retailers who cater to the discretionary spending of the general population. When income is cut, only the essentials become important. Surviving this pandemic will prove to be a tricky endeavor for many retailers. To make matters worse, the ripple effect of the virus has already impacted the retail supply chain in the months to come.

Essentially, the problem has three nasty barbs

  1. The seasonal product in the stores today — closed stores that cannot move it (even if there is demand).
  2. The product on its way from the factories right now — some may be replenishment orders for the current season or early floor-set merchandise for the upcoming season, with nowhere to go since DCs aren’t shipping existing stock (assuming the factories actually shipped; many core producing countries were dealing with the peak of the pandemic when orders were scheduled to ship).