In the unpredictable retail landscape amid the coronavirus pandemic, in which U.S. consumers are sheltering at home and shopping for items to improve their at-home experience, online retailers selling the gamut from cookware and self-care products to cigars report strong sales. However, even with increased sales, many retailers are noticing a change in shoppers’ preferences.
“We’re seeing increased demand across our product categories,” says Darren Barker, owner of premium kitchenware retailer ChefsCornerStore.com. “I’ve talked to five or six competitors, and they are seeing the same things, whether they’re in Florida, New York or California. We believe the people that are following the stay-at-home orders are doing more cooking and realize they need to upgrade their kitchen tools.”
The retail owner estimated his business, which sells everything from $10 spatulas to a $5,000 espresso machine, will see double-digit year-over-year growth. Multi-cookers, which can be $180, are flying off the shelves, Barker says. “As soon as they hit our deck, we sell out within 24 to 48 hours,” he says.
While Barker is optimistic about his product category, the long-term retail consequences remain to be seen.
“The ones who survive will be stronger, but the ones who were on the cusp of failure before, they’re gone,” Barker says.
Research firms also report mixed results for online sales depending on the product category. 21% of consumers say they will buy more online than normal, 60% say they will shop the same online as normal and 18% say they will buy fewer things online, according to a Forrester Research Inc. survey.
“The truth is no matter how big the government stimulus, lots of people have lost jobs, their financial predicaments are uncertain and there will be a contraction in consumer spend across every vertical except for food at home, but even there, we will see people ‘trading down’ and looking for ways to get more for their dollar,” says Forrester retail analyst Sucharita Kodali.
The shift in consumer spending away from expensive products has been dramatic for online towel retailer Bare Cotton.
“People are shopping, but they’re buying value items, like cleaning cloths, instead of luxury products,” says owner Sel Belek. “I’m guessing people are buying these instead of paper towels, and they’re using them to clean surfaces.”
Pre-coronavirus, Bare Cotton’s best-selling product was a $43 Turkish cotton towel set of four. Now, the top-selling item is a $23 cotton cleaning towel set of 24 made in Bangladesh. The brand sells at retailers like Amazon.com, Walmart and Macy’s. Compared to its previous projections, sales are about 40% down, he says.
“We don’t know what will happen in the next two months,” Belek says. “Our main revenue was coming from high value, high-profit products, and now we’re selling low value, low profit.”
For now, the business owner is focused on selling and meeting consumer demand.
“We have inventory sitting in the warehouse, and we need to create cash in the company,” he says. “I don’t know what’s going to happen in the next two, three months so we need to have cash to survive.”
For hemp products retailer Prima, its sales have increased for two of its stress-relieving products, both made from cannabidiol, or CBD.
It’s sold 10 times as many of one of its CBD supplements, The Daily, compared with pre-COVID-19—or a 1,000% increase in sales, says Prima founder and CEO Christopher Gavigan.
In addition, the brand sold out of one of its aromatherapy bath soaks on both its own ecommerce site and Sephora.com, a wholesale account.
The closure of nonessential businesses has meant an uptick in sales for some online retailers, like Miami-based Gotham Cigars. “With the quarantine and stay-at-home orders, cigar lounges have closed and as a result of that, we’ve seen a spike in business and we’re seeing record numbers,” says Manny Balani, president of Gotham Cigars.
The retailer has had an influx of new clients while existing clients are stocking up, he says. Overall, its online sales are up 30%, and the average retail transaction is $100 to $115, Balani says, which represents an increase from pre-coronavirus, when the average retail transaction was $90 to $95.
About 70-80% of the retailer’s cigars are manufactured in Nicaragua, Dominican Republic and Honduras, and many of the cigar factories in these countries have shut down due to coronavirus, he says, adding that he’s worried about supplies running out.
“Many of these organizations are faith-based, and they usually close for two weeks for religious holidays this time of year,” says Balani, referring to the Easter holiday.
“Now, they shut down a week or two weeks prior. Not having a crystal ball, is the standard time of reopening going to happen or will it go beyond that?” Balani wonders.
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