Coronavirus Effects on Retail Discounts
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As physical stores close around the world, disruption has occurred in the natural economic cycle creating uncertainty for retailers. Consumers have turned attention to online shopping, though they continue to show fear in spending.
To track online trends, Refintiv has partnered with StyleSage Co. to analyze retailers, brands, online trends and products from across the globe. Notably, discount penetration and average discounts have increased, even as peak winter sales season would have passed at this time of year.
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“The coronavirus has imposed a hard stop on the global economy, causing retailers to ramp up discounting to move their inventory,” said Jharonne Martis, director of consumer research at Refinitiv. “Tracking the discount levels as the pandemic unfolds will reveal which retailers will weather the storm better than others.”
According to the company’s findings, active sportswear has experienced a slight increase in global discount assortment on sale, however, no significant change has been seen in the average discount amount. The company notes that the ath-leisure category has not been discounted frequently given the popularity of the trend.
U.S. malls are marked as “most vulnerable” in the report having had already experienced weak traffic and sales over the past years. The company notes that Simon Property Group closed all of its malls for the duration of March in order to keep shoppers and employees safe. Since March 8, discounts are trending upward both in penetration and average within U.S. malls.
High-end retailers in the luxury sector rarely discount products and have remained steadfast during the coronavirus pandemic. The report notes that to maintain brand perception, the luxury sector will most likely be the last to make any moves in discounting.
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