Who Will Win In The New Era Of Retail?

This week, Tracey was joined by Zacks Associate Stock Strategist, Maddy Johnson, to discuss their favorite podcast topic: the retail industry.

Only 2020 is no ordinary year. Gone are the arguments about the department store being dead and whether Millennials like to go to the mall.

2020 is about survival.

Who will make it through to the other side?

Is Brick and Mortar Truly Dead?

With retail stores shut around the world, consumers are embracing online ordering like never before.

PVH (PVH - Free Report), one of the largest global apparel retailers which owns the Tommy Hilfiger and Calvin Klein brands, has said that their online sales have surged anywhere from 30% to 60% depending on location during the shutdown.

But online sales are still just 12-13% of PVH’s total sales. The rest are still happening in brick and mortar stores.

Similarly, women’s specialty retailer, Chico’s (CHS - Free Report), said that digital sales rose 16% for the period from Mar 15 to Apr 25 compared to the weeks just prior to the economic shutdowns in the US.

Yet Chico’s is still operating over 1300 stores in the US and Canada and intends to start reopening some of those on May 4.

What’s it’s plan to get people into the stores?

Will Experiences Make a Comeback?

Other retailers, like Lululemon (LULU - Free Report) continue to enhance their digital offerings while also building on the experiences at their stores.

Experiences was a big retail concept heading into 2020.

Lululemon recently opened its first in-store café in Chicago, as a test of the “experiences” concept. Will the plan for further expansion of the concept now be put on the back burner due to the coronavirus?

Online Only: Going to Crush it or Not?

Many might think if you’re an online-only retailer you have it made with everyone sheltering at home.

But do you?

The RealReal (REAL - Free Report) is an online luxury consignment retailer. On Apr 14, they gave a business update that reported that gross merchandise volume fell 40-45% once the Bay Area went into its shutdown starting on March 17.

It has furloughed employees, reduced executive salaries, and is postponing the opening of a brick and mortar store in Chicago.

Revolve Group (RVLV - Free Report) is another retailer that is online only. On Mar 20, it withdrew its full-year guidance as some of its big events like the REVOLVE Festival were canceled. Shares have fallen 40% year-to-date.