The good news is retail sales for May were up 17.7% from April, according to the U.S. Census Bureau. The bad news is that retail sales were down 6.1% from May 2019 to May 2020. While NRF president and CEO Matthew Shay said, “[The May] sales report is very encouraging news at a time when we need to focus on what will happen as retail doors open once again,” NRF Chief Economist Jack Kleinhenz sounded a cautionary note, “The economy kicked off in May as retailers and other businesses reopened and both stimulus money and supplemental unemployment checks fueled spending driven by pent-up demand from two months of shutdowns. But full recovery is still a long way off.”
While in April almost every category of retail was down, in May the opposite happened. (The month-over-month figures are seasonally adjusted; the year-over-year figures are unadjusted.)
- Clothing and clothing accessory stores were up 188% month-over-month but down 63.3% year-over-year.
- Furniture and home furnishings stores were up 89.7% month-over-month but down 23.2% year-over-year.
- Sporting goods stores were up 88.2% month-over-month and up 6% year-over-year.
- Electronics and appliance stores were up 50.5% month-over-month but down 30.9% year-over-year.
- Building materials and garden supply stores were up 10.9% month-over-month and up 10.8% year-over-year.
- Online and other non-store sales were up 9% month-over-month and up 25.3% year-over-year.
- General merchandise stores were up 6% month-over-month and up 1.6% year-over-year.
- Grocery and beverage stores were up 2% month-over-month and up 14.3% year-over-year.
- Health and personal care stores were up 0.4% month-over-month but down 12.6% year-over-year.
The industry segments that rose both month-over-month and year-over year were sporting goods stores, building materials and garden supply stores (also one of the few bright spots in April), general merchandise stores and grocery and beverage stores.
And not surprisingly, online sales were up the most year-over year—25.3%. That wasn’t the only good news for online sellers—according to a report in Chain Store Age a new survey from CouponFollow shows 73% of respondents shopped at least one new online retailer since the coronavirus pandemic started. Even better—43% shopped one to two new online stores, 24% bought from three to four 3-merchants and 5% tried five or more new online retailers.
All generations cut the exploratory bug as 89% of millennials, 86% of Gen X, 78% of Gen Z and 76% of baby boomers were all willing to try a new online seller.
Not surprisingly younger consumers shop the most online, with 55% of Gen Zers and 51% of millennials leading the way. And 66% of survey respondents say they’ll keep buying online, even as stores reopen.
Most (74%) of the shoppers opted for their items to be delivered while 55% chose curbside pickup and 48% bought online and picked up their merchandise in-store (BOPIS).
This is encouraging news for small online retailers. Consumers are actively looking for—and finding—new online stores to shop at—the key is to offer unique products and market your business aggressively.
Altered retail environment
Just because sales were up in May doesn’t necessarily mean things are going back to normal. Monica Eaton-Cardone, an entrepreneur and IT executive specializing in risk management and fraud prevention, says “these reopened businesses face a retail environment much altered from the one that existed in mid-March, when the lockdown began.”
But Eaton-Cardone says the lockdown has created opportunities as well. She notes, “Food-by-subscription service has seen demand so far exceed supply that prospective new subscribers are placed on a waiting list. In some cities, restaurants have pivoted not to takeout, but to foodstuffs and supplies sales, becoming, in effect, contactless grocery stores.”
Consumer behaviors In her industry have changed as well as “new risks come into existence,” Eaton-Cardone says. For example, she notes, credit-card chargebacks based on service complaints, typically made by consumers new to e-commerce and impatient with coronavirus-crisis-related delivery delays, are outnumbering fraudulent chargebacks, which normally account for some 80% of all chargeback volume.
All in all, it’s a mixed bag. As NRF’s Kleinhenz says, “Going forward, wallets are primed, increased foot traffic shows that consumers are returning to stores…but we are likely to remain on a roller coaster for a while.”
Shopper stock photo by Anna Tryhub/Shutterstock