Reference no: EM133196922

ARTICLE:

So Are Retail Sales Back, or Are They Still Depressed by the Pandemic? Yes.

As one of the industries most affected by the COVID-19 pandemic, retailing has been frantically searching for insights into what to expect next. Are shoppers going to come back to brick-and-mortar stores? Will sales increase once more people are vaccinated? How many delivery drivers do they need to hire? And seriously, do they need to start overstocking their toilet paper inventories again?

Unfortunately for retailers, the answers and predictions are all over the place. There is no consistency in either the outlooks or consumers' behaviors, which seemingly change from moment to moment. For example, June 2021 saw a big jump in consumer buying, maybe because people started to feel a little more comfortable as COVID-19 seemed to come under some level of control. Or maybe it resulted from Amazon's decision to move up its Prime Day to that month, which prompted many other major retailers to offer sales then too. But by July and August, spending was back down, whether because the Delta variant had started to spread and spook consumers or because they'd spent too much on Prime Day.

Even individual retailers cannot quite get a sense. Target happily announced a sizable bump in its second-quarter sales for 2021-even as it also cautioned that it predicted even more volatility in its sales in coming months. But the retailer also noted that it had learned valuable lessons from the past year, such that it had more inventory on hand and in stores, just in case new COVID-19 developments resulted in supply chain bottlenecks, such as those that kept stores out of stock during the height of the pandemic.

In particular, it wants toilet paper and other paper products on hand, because some trends indicate that consumers are back on their stockpiling habits. Whereas purchases had levelled out, compared with the remarkable jump in sales of paper towels, toilet paper, and wipes in the early lockdown phases, it appears that people's personal inventories are running low. As the Delta variant surges, people also are reinvigorating their cleaning habits, such that the unusual buying behavior seems driven by both inventory levels at home and still-shifting preferences for achieving a sense of protection against the virus.

For retailers, good predictions are hard to come by, but the best answer might be to keep trying to gather ever more precise data. For example, grocery retailers have a much different perspective than sellers of other types of products. Their performance is deeply dependent on good supply chain operations that keep daily necessities in stock. People are still going to buy groceries, no matter how the coronavirus develops or evolves, whereas retailers selling cars, appliances, and other items that people can delay need to address other marketing considerations and develop distinct strategies. But for grocery retailers, keeping inventory levels high seems to be the key-especially in the toilet paper aisle.

Questions

What sorts of additional data might retailers gather to improve their sales predictions?

What are some key sources of these types of data?

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