By Tonya Garcia, MarketWatch
Malls and other retailers are slowly beginning to reopen, but that doesn’t mean consumers are lining up to shop.
In fact, if Target Corp.’s /zigman2/quotes/207799045/composite TGT +2.78% skyrocketing digital growth is any indication, shoppers will stay put and make their purchases from home.
States like Georgia and Texas are starting the process to loosen stay-at-home restrictions in an effort to reopen the economy for business, giving residents the option to spend money at places outside of the home besides the grocery store.
However, First Insight data shows that shoppers are in no rush to head back to the local mall. A new survey shows that only 33% of consumers feel safe shopping in a mall, compared with 54% who feel safe shopping in a grocery store, half who feel safe at a drugstore chain, and 45% who feel safe at a big-box retailer, like Walmart Inc. /zigman2/quotes/207374728/composite WMT +1.69% or Target.
“As retail visits expand past essential retail like grocery and drugstores, other retailers, and malls in particular, need to be thinking of ways to inspire a sense of safety for consumers, and it will need to go beyond offering gloves and masks at the door,” said Greg Petro, chief executive of First Insight, in a statement.
First Insight is a digital product-testing platform.
Target said quarter-to-date same-store sales rose more than 7%, including more than 100% growth in digital. For the month-to-date, digital same-store sales soared more than 275%.
Shoppers aren’t just taking advantage of home delivery for items purchased online, though that is popular. The Shipt service, which offers delivery in as soon as an hour, has added more than 80,000 new shoppers, according to Target Chief Executive Brian Cornell, who spoke on a call with the media in conjunction with the update. These figures put that service on track to double the number of users by the end of April.
Same-day services that allow customers to pickup orders from the store, often with a contactless feature, are also popular.
Cornell said order pickup volume on some days was twice as high as Cyber Monday, the popular online holiday season shopping day.
Though digital growth is going through the roof, Cornell says stores are at the center of the company’s strategy.
“Stores are critically important to American consumers,” he said.
Wells Fargo analysts say geography will be a big determining factor for which retailers see traffic when the doors open.
“While all states could restart by May/June, the pace of the recovery could vary greatly and is likely to depend on the actual COVID-19 health burden, population density, ongoing testing/containment strategies, the efficacy of therapeutics, and the ultimate availability of a vaccine,” analysts led by Edward Kelly wrote in a note published this week.
Among those that Wells Fargo forecasts are in a favorable geographic position are Boot Barn Inc. /zigman2/quotes/208050749/composite BOOT +9.54% and off-price retailer Ross Stores Inc. /zigman2/quotes/202639496/composite ROST +1.33% Boot Barn has more than 60% of its stores in states like South Carolina, Arkansas and Texas that have registered the lowest number of daily deaths due to COVID-19 so far. For Ross Stores, the figure is more than 40%.
Retailers like Five Below Inc. /zigman2/quotes/202743941/composite FIVE -0.22% , TJ Maxx parent TJX Cos. /zigman2/quotes/203136811/composite TJX +1.97% and Bed Bath & Beyond Inc. /zigman2/quotes/209801102/composite BBBY -1.44% are forecast to have a more difficult recovery because more of their stores are in locations like Pennsylvania, California, New York and Michigan where the number of deaths are much higher.
Sensing the consumer trepidation, The Wall Street Journal reports that many businesses, like Best Buy Co Inc. /zigman2/quotes/205918291/composite BBY +2.45% , Gap Inc. /zigman2/quotes/206554267/composite GPS +3.20% and Macy’s Inc. /zigman2/quotes/201854387/composite M -3.23% are waiting to reopen.