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Originally Published: Apr 15, 2020
Originally Published: Apr 15, 2020 Last Updated: May 21, 2020 13 min read
Calum Heath for Money

Retail sales in the U.S. just suffered the biggest one-month drop ever recorded. According to the Census Bureau, March 2020 retail sales slumped 8.7% compared to February. The crash continued in April, when retail sales slumped a record-high 16.4% compared to March — and were down a whopping 21.6% from April 2019.

The coronavirus pandemic has caused countless stores to close and shoppers to stay home in quarantine, and unemployment has soared. While overall retail sales have plunged, bear in mind that the Census Bureau numbers factor in grocery store sales, which were up 27% in March, as the masses shifted to remote work and cooking more at home.

Consumer spending in most other categories plummeted: In March, sales at electronics stores, gas stations, department stores, sporting goods retailers, and furniture stores all fell 15% to 27%, and clothing and apparel store sales were down just over 50%. For April, retail sales were even more abysmal. Clothing sales were down 89% compared to April 2019.

The coronavirus pandemic's impact on shopper behavior and the economy overall is unprecedented. So it's difficult to gauge exactly how retailers might respond, or to predict which stores could be forced to file for bankruptcy protection or go out of business entirely.

With prior economic crises, we've seen more balanced decreases in consumer spending across the board. During the heart of the Great Recession in 2009, spending in broad categories like food, apparel, alcohol, and entertainment all dropped between 1% and 5%, according to the Bureau of Labor Statistics.

And, when previous economic crises decimated retail sales, stores have tended to respond in standard knee-jerk fashion, by offering huge discounts and nonstop deals to entice consumers to open their wallets. Entire malls seemed to offer 70% off everything during the Christmas shopping season of 2008. It was also in the aftermath of the recession when Cyber Monday's online deal-a-thon truly took off, and when big box stores decided they needed to be open on Thanksgiving Day to juice sales.

Will retailers resort to deals and deep discounting now? It almost seems silly to waste time thinking about it. Over 40,000 people in the U.S. have already died because of the coronavirus.

Nonetheless, many major retailers have been offering huge discounts in recent weeks — especially with clothing and other categories whose sales have dried up — and they'll surely continue to roll out massive deals in the weeks and months ahead. Not everything will be on sale, however, and the promotions you see may be tame compared to flashy deals in the past. One conundrum facing retailers is that they risk coming off as tone deaf if they are pumping up deals on spring fashions or new smartphones when would-be shoppers are focused squarely on the health of their loved ones or simply how to get groceries to feed their families.

Here's more of what shoppers can expect in the retail landscape this spring and summer, which will be like none other we've seen.

When Is Amazon Prime Day 2020?

Amazon, which accounts for roughly 40% of e-commerce sales in the U.S. and whose stock price hit an all-time high during the coronavirus pandemic, has a big role in setting the tone for deals and promotions in the retail landscape.

Amazon's usual game plan is a nonstop rollout of new sales, with fresh deals popping up daily around the calendar, plus a huge assortment of promotions around holidays and major shopping events like Memorial Day, Amazon Prime Day, and Black Friday. During the coronavirus crisis, however, Amazon has scaled back tremendously on this approach.

Amazon removed the "Today's Deals" section from its home page sometime in March, and the once-routine promotion of flash sales disappeared. (Update: As of mid-May, the "Today's Deals" roundup at Amazon had returned.) Delivery of Amazon orders for nonessentials like books, toys, and electronics have been delayed for weeks, even for Amazon Prime members accustomed to one- or two-day shipping , because the company made major changes to operations to emphasize sales of essentials like groceries and baby formula.

Even the "summertime Black Friday" sales holiday Amazon created, a.k.a. Amazon Prime Day, is apparently up in the air this year. According to Reuters, Amazon Prime Day 2020 is being postponed because of the coronavirus pandemic. Prime Day normally takes place in early or mid-July, but it would be delayed this year at least until August, internal company notes cited the Reuters stated. The Wall Street Journal reported in late May that "people familiar with the matter" had also said that Prime Day would be delayed this year, perhaps until September.

Amazon would not comment on Prime Day 2020 when asked by Money. Nor would Amazon comment in general on how it would approach deals and discounts this spring and summer.

However, there are signs that Amazon is trying to get back to normal. The Amazon Pantry service, which allows shoppers to group $35+ orders of snacks and household staples for easy free shipping, is available once again after disappearing in the early weeks of the coronavirus pandemic. Amazon has also begun allowing third-party sellers to resume delivery of nonessential goods, and the company is in the process of hiring 100,000 new workers to keep up with heightened demand.

What's more, even though Amazon isn't promoting deals like it used to, we've been spotting sales pop up, especially for its own devices. The Amazon 16GB Fire HD 8" Tablet, for example, was on sale for $49.99 in mid-April (list price: $79.99), while the Echo Dot smart speaker was discounted to $29.99, down from $49.99 regularly.

Where to Find the Best Deals Now

Amazon may be deemphasizing deals, and vast numbers of stores are closed around the country. But plenty of retailers are offering major discounts online — in particular on apparel, footwear, and health and beauty purchases. Shoppers should only expect more deals along these lines in the weeks ahead. Free shipping is easier to come by too, as retailers lower their usual minimum purchase requirements or drop them entirely.

While many people are eagerly awaiting their coronavirus stimulus checks to help pay for bills and groceries, some of the money may be used for less essential purchases. "As we see non-essential shopping continue to increase, we anticipate more brands will continue to offer deals to encourage consumers to shop," Sara Skirboll, the shopping and trends expert for the online coupon and deals site, told Money. "During the week of March 29, we saw demand rise for clothing, accessories and shoes. In fact, sports & fitness items and shoes experienced nearly 40% growth in consumer demand compared to the week prior.”

The retailers that have suffered the most, because they've been closed and their merchandise is not exactly top of mind to consumers, tend to also be the ones that are pushing discounts online. "Nordstrom had a sitewide 25% off, and so did Anthropologie," Forrester senior retail analyst Sucharita Kodali told Money. "I suspect they had bought deep" — meaning they purchased a huge amount of inventory to sell in March and April — "expecting a lucrative spring and that fizzled."

Indeed, Nordstrom has a massive spring sale right now with deals up to 60% off, plus ongoing flash sales that pop up routinely on the site. Old Navy has recently been selling $30 sweaters for $8, $35 jeans for $12, and 50% off all swimwear, while its sister retailer Gap has been rotating different "mystery deals" daily, with dozens of items marked down by 60% or more. Meanwhile, Neiman Marcus, which has also been routinely launching major sales, is expected to file for bankruptcy, and J. Crew did file for bankruptcy in early May. Nordstrom announced it is permanently closing 16 stores too.

RetailMeNot says it noticed an increase in sitewide health and beauty discounts at the end of March, and it expects many more deals in the category ahead as people continue to handle grooming at home instead of heading out for hair coloring or nail appointments. Mother's Day online deals should be available in abundances too. "We expect to see deals on items like flower delivery and jewelry as well as chocolates and other treats start to hit in mid-April and continue through early May," RetailMeNot's Skirboll said.

Not everything will be marked down this spring, though. Everyone's adopted the at-home uniform of sweatpants or yoga pants during the coronavirus quarantine, and sales in the "leisurewear" category have soared in general. So retailers hardly need to pump up deals to boost leisurewear sales. Instead, it's the merchandise that people have been reluctant to buy in recent weeks that will see the biggest discounts.

"You should be able to get bathing suits really cheap this year," said Forrester's Kodali. "Lululemon leggings however, probably not."

Stores With Fewer Deals

Finally, there are the retailers that aren't offering much in the way of discounts, either because they are too focused on groceries and other essentials to consider deals and promotions, or because it seems wise to avoid a spike in sales.

Grocery stores and other major food sellers like Walmart, Costco, and Target are the most obvious examples of retailers that are unlikely to be promoting major deals. Why? For one thing, spending on groceries has spiked during the coronavirus crisis, and there isn't much need to float discounts as a way of enticing shoppers to buy more.

What's more, these stores are struggling with unprecedented demand for certain key items (toilet paper is still in short supply), while reducing store hours, limiting shoppers, and taking other steps to keep workers and customers healthy. At the same time, they're struggling to ramp up online grocery delivery and curbside pickup services, so that shoppers can avoid going into stores.

So it shouldn't come as a surprise if these stores aren't gung-ho to promote sales on Instant Pots or random nonessential goods anytime soon. Doing so when people are still dying in a pandemic is not only a low priority for these stores, it could come across to shoppers as insensitive.

All of these factors help explain why Costco recently sent a mailer to club members saying that its usual monthly book of coupons and sales has been cancelled for April. Likewise, Target has stopped printing its weekly circular, and the online version is only seven pages this week. Inside, the "sales" include many full-price items, like Apple AirPods Pro, offered for $249.99 like usual.

Another big retailer that's scaling back on deals may come as a bit of a surprise. It's Home Depot, which says that it is "eliminating major spring promotions to avoid driving high levels of traffic to stores," for the sake of of shoppers and employees' health alike. So you can probably forget about "Spring Black Friday" sales or major Memorial Day deals on mulch, grills, patio furniture, and the like at Home Depot this year.

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