These Are Retail’s Winners and Losers of 2020
This wild year polarized businesses in the retail sector
On January 1 of this year I published my first article, arguing why Facebook was the company of the 2010s and explaining how they’ve created much of the framework for today’s digitally-native brands. I originally planned on using this outlet to report on the newest consumer brands, the venture capitalists backing them, and the industry incumbents looking to beat or buy them. I knew it’d be interesting to take a look at how these players affected the retail sector over the period of a year, but of course I had no idea this would be perhaps the most interesting, devastating, and exciting time for people operating in this space.
Prior to the coronavirus causing massive shifts in American life, Casper went public in the first true direct-to-consumer IPO and I spoke with the mattress company’s second employee and Jinx founder Terri Rockovich, who has directed her dog food business’ to massive success this year. Once lockdown orders went into place, in-person shopping stopped, brands found innovative ways to adapt, food delivery became a habit, and masks became the new fashion statement. Facebook hit a hurdle, PepsiCo flourished, and Target kept building its stylish brand.
If you’re reading this post, you are certainly no stranger to the impact that COVID-19 has had on brick-and-mortar, e-commerce, and Amazon. Much has been written about the pandemic’s impact this year, and much will be written in years to come. This post—to wrap up a long 366 days—is meant to serve as an honest take on the brands and businesses that were most negatively or most positively affected by the virus.
Losers
(I’ll do the winners second to leave off on a high note.)
Mom-and-pop shops and local restaurants
Without a doubt, the businesses that suffered the most this year were small businesses and those deemed non-essential by governmental officials. In many states, in-person dining was shut down in March and those stores were restricted to take-out and delivery sales. Over 100,000 restaurants have “closed permanently or long-term” according to Bloomberg.
Many efforts have risen to help community-favorite eateries and shops and in just the past two weeks, Barstool Sports founder Dave Portnoy has used his platform to launch the Barstool Fund. At the time of writing, the fundraiser has collected over $10 million and has attracted the attention of high-profile athletes like Tampa Bay Buccaneers’ quarterback Tom Brady.
Malls
The middle-school-hangout spot was already in peril, but the pandemic has accelerated its decline. Although numbers are all across the board, retail advisory firm Coresight Research estimated that 25 percent of the United States’ malls would shut down over the next three to five years. Classic mall brands like JCPenney, J.Crew, GNC, and many, many more have filed for bankruptcy this year.
Workwear and fashion
Any company operating in the office ~supplies~ space had a tough twelve months. Clothing rental company Rent the Runway permanently closed all five of its retail locations in August, women’s office wear label M.M.LaFleur renamed some of its line to be more work-from-home friendly, and co-working space The Wing faced several challenges including its chief executive officer stepping down.
Winners
Amazon
The king of e-commerce became the emperor this year. AMZN’s return was nearly five times as much as the S&P 500. In the third quarter, its total revenue was up 37 percent with subscription services increasing by 33 percent and with AWS continuing its rise with 29 percent growth.
Depending on the source you’re looking at, Amazon makes up roughly half of U.S. e-commerce, and that was clear this year. For many people in quarantine, Amazon became the first place that came to mind when they needed something. This caused shipping delays and shortages in some essential items like basic toilet paper.
The company also continued its conquest into other areas of the retail space; in September it launched Luxury Stores to merge fashion and Amazon’s convenience. This announcement comes after years of in-house brands like Amazon Essentials and executive hires to build its fashion group.
Food and grocery delivery
In many ways, DoorDash, Uber Eats, and the like enabled restaurants to survive the shutdowns. While high fees continue to be a point of contention, these services no doubt helped many restaurants get through the year. A California restaurant owner told MarketWatch “we were effectively shut down. We closed for a couple of days, took stock and realized it [food-delivery technology] was the only way to keep our business open.”
DoorDash had a successful initial public offering in early December, closing 86 percent up from its starting price on its first day of trading.
Home goods
Finally, companies offering goods used in the home like cookware, gaming systems, and houseplants thrived because of stay-at-home orders. Kitchenware startup Great Jones experienced 401 percent year-over-year growth and sourdough bread was the new cooking trend. Both PlayStation and Xbox’s new consoles sold out and TV sales have been up 19 percent compared to last year, according to The NPD Group. Plant brands like Bloomscape and The Sill also had monumental years.
Well, we did it, 2020 is in the books. I’ll end my last article of the year the same way I did my first:
Here’s to the roaring twenties.
