 Hi everybody, welcome to ad week together. We are recording live today I have a guest here Diana Pearl. She is our She's our managing editor of our brand week quarterly magazine as well as our deputy brand editor For all of ad week so she is immersed in brands and in particularly retail So we're gonna be talking about retail and how the coronavirus is is playing out for different retailers right now So no shortage of things to dig into there I'm Stephanie Patrick. I'm the executive editor of ad week and we have a lot of you tuning in today from all over the world I'm just taking a look here. We've got Germany, Italy, California, Buenos Aires Florida, India, Paris, and Chile. So thank you so much for being here with us It's really just an opportunity for us to get to know each other at about one or two years in time in the U.S. The different time zones represent as well as the chance to bring together our experts on To talk about sort of our new normal and how it's all laying out. So Diana, thank you for joining us today You're in Brooklyn and I'm in Brooklyn. So we're the hero today, right? Yes. Yes. Thanks for having me excited to be here Yeah, so I wanted you had a great story that just came out last night And it came from a question that you asked I think, you know a couple of weeks ago as all of this was starting to happen You wrote to me and said can e-commerce carry the retail industry during the coronavirus? That was sort of your question like can can e-commerce as as we see You know brick-and-mortar stores have to temporarily close is e-commerce capable of handling the load That story came out last night. So what's what's the answer? What's the verdict? It seems that the answer is a little bit, but not completely you know, there are some brands that are perhaps a little bit better positioned to Carry the load in terms of e-commerce, you know, you think about direct-to-consumer brands that really they grew up online So their customers know where to find them, you know, they're they do have some brick-and-mortar presence But it's really about community building rather than selling product So you look at brands like that and you say, okay, they're well positioned e-commerce is at the heart of their business You know this closing maybe the four or as they have nationwide. Maybe we'll But then you look at brands that really maybe they have e-commerce presence But they never really built and they really relied on those in-store sales and they're being hit a lot harder And then there are brands that you know are super popular Purell or a Charmin, but they don't have their own e-commerce capabilities You know, they only sell through wholesale platforms or ins in stores like Target or Amazon And see stores or brands like that And it's like are they missing out on a huge opportunity to sell and all to get products in the hands of Humors at the right price, you know, there's all these reports of price gouging especially on those hot in-demand items Or you know if Purell itself had its own e-commerce website They could sell at the right price and get products in consumer hands So it's really about You know speeding up sort of the digital revolution brands that didn't pay attention to this or didn't pay as much attention to this as they Perhaps should have before are now sort of forced to reckon with that decision and maybe no they can't get things together for this particular You know, it's all happening so fast and it's hard to you know, completely build up an e-commerce platform With it's of course, but maybe this will have them rethinking their digital strategy And sort of moving things faster But you know as powerful as e-commerce is and it's definitely the direction the industry is heading brick-and-mortar is still a really powerful tool as Well, and it's still how the majority of Americans shop So even as e-commerce sales might be increasing a bit It's perhaps not enough to completely carry the industry, especially in a time of economic uncertainty Yeah, you know, I think it's so interesting I know you know a year or two ago when really people were starting to call on brands to build the Direct relationships with their consumers. I was a bit skeptical and Particularly with brands that you would typically buy at a grocery store because I think from the consumer perspective If I do a big, you know shopping trip grocery shopping trip to stock up my household I'd be buying 60 items. Do I really want to go to you know, 60 different brands to buy them all? Really? But it is interesting that we're living through a time where those brands who do have a direct relationship Who aren't having sales and was on or a target? You're saying are there do you have are there any examples of brands who you're seeing? Who do have that e-commerce strategy in place that's paying off right now? You know, I look at a brand like an Everlane, which is a fashion retailer And obviously fashion is is not top of minds for people right now unless it's lounge wear But you know, they have direct relationship with their consumers. They only have a few stores and they've been running certain promotions I know just anecdotally. I'm hearing it's like every social media seems to be this is the time they're investing in their Everlane gene and you know, they don't have to rely on another retailer, maybe Their stores closed and now they're not getting all the traffic It's really just about that relation that they had already built with their consumer So I think a brand like that is in a good place to sort of weather this one Hit retail are gonna be buy brick-and-mortar stores temporarily closing We still don't quite know how long that's gonna be But do you do you have any sense of what it'll be like after the dust settles? Will all these brick-and-mortar locations reopen or is that uncertain? It's a bit uncertain and I think it really depends on what national position the stores were in Before and we are one of our retail reporters Which are colleagues did a bunch of great stories about stores that might be at risk and that this could sort of be the The kiss of death for them, you know, one example is Neiman Marcus They have a lot of debt and they're a store that really relies on creating that luxury experience Rather than and so, you know, you have your personal shop or you have the restaurants and all that sort of thing And when you don't have that environment, you know, you translate that to e-commerce And so with the stores closed, you know, are people looking to do this in the same way is that they went to their You know their mall or they to a store in their cities downtown to really get that experience also Just luxury shopping right now is you know, it's not think it's top-of-mind for people There's a lot of economic uncertainty people aren't really leaving their houses It doesn't really seem like the time to splurge You know, there's also brands like J crew that had their IPO plan for made wealth one of their sister brands This spring and their refinancing was tied to that So if they can't get that refinancing in the made well IPO keeps getting pushed that could put them in a vulnerable position as well So really anything not essential like the footwear apparel is sort of at risk right now Because it's just not top of consumers minds and everyone is focused on spending money on their essentials Yeah, it seems like this double-edged sword if you'll have time to shop At least online, but they also might be worried about their pocketbook Definitely Diana so we're getting some some questions and comments from our LinkedIn viewers in particular and I want to bring up one is the idea of competition There's some new competition coming into the market at this time. This is from autumn joy Who says it's creating into example is Tito's liquor for example is creating sanitizer to compete with sold out and so that's kind of you Any any thoughts on the competitiveness at this time Yeah, I mean for products like hand sanitizer that are such high demand, you know, it's really like you take you can get I think people will take their nose hand sanitizer. They take their, you know Estee Lauder hand sanitizer and they take classic Purell. It's really getting your hands on what you can and for that I don't think there's going to be a laughing effect because I can't imagine after viruses over Tito's is going to decide that Hand sanitizer big business and it's something they should they should be creating so yes There are other options, but I think when supply is limited. It's less about, you know, being picky about which brand It's more about what can I get my hands on at this moment? Yeah, that that ring true and Melanie long I Chined in here on LinkedIn with a comment. She just said your your quote that fashion birds are not top of mind right now Except maybe lounge where she just said yes capital letters Interesting a colleague of ours and I were talking about the fact that the only Fashion as we're getting served on Instagram right now are for for lounge where it's really funny how it shifted from from work We're at a lounge. I want to get back to what you were talking about in terms of Just just the fact that retail overall has been challenged heading into this and certain retailers in particular Are coming into this where they've already they're already in a weakened position You and your team have been writing a lot about the the quote-unquote retail apocalypse And just how many store closures we were seeing before coronavirus hit Do you think that you know, this could be sort of the final nail for some? Are you anticipating? More bankruptcies and sort of permanent closures. Yeah, definitely. I think it's inevitable I mean, this is hurting every industry and retail is definitely not exempt from that And you know one of the sources I spoke to you for the story I wrote yesterday, you know said that for a lot of retailers It's sort of been deaf by a thousand cuts and this is kind of like that one last gash so to speak That is could set some of these retailers, you know clothes for good You know like I said J crew is an example of a retailer. That's vulnerable This is an example of retailer that's vulnerable lands and GNC, you know Some of these distressed retailers rating agencies have been looking at and concerned about for a bit You know having to close all your brick-and-mortar locations Across your primary market the United States And you know for some of these that have locations in Europe having to close those as well I mean, it's huge. It's that represents the majority of where their sales come from and even though You know, I've seen like J crew running promotion after promotion this week, and I'm sure people are shopping online It's just it can't fully Make up for it, especially like I said at a time where there's a lot of economic uncertainty people aren't thinking about their discretionary spend quite as much So it's just there's a lot of vulnerability for these brands, right? Yeah, and I hear some of our viewers Mending the audio so I apologize try to troubleshoot that but hopefully you can still press Diana I have a question about Some of the disc that we're seeing from I know I know, you know You you've mentioned just to me that if you if you if you do have some discretionary income This is a really good time to be buying because we're seeing these discounts And I've been wondering what's driving that is it that they are in danger? And so they're trying, you know, they're they're You know almost like not liquidating but they're you know deeply discounting things to try to boost sales Or is it that they see an opportunity with people at home people shopping online? I mean they're trying to kind of capitalize on it. Yeah, I think it's a little bit of both I do think people are spending more time at home. You know, they they have a lot of time to browse Maybe they're bored. They're making purchases. I also think even a retailer isn't necessarily in danger This is an uncertain time and there's no question that there is going to be a hit to their profits And a hit their revenue with having closed brick-and-mortar stores, you know example of that that I look at is more Last week they put everything on their website 20% 20% off that is unheard of I have never seen Nordstrom do a discount like that in my entire life And I'm saying this not just as a retail reporter and as a shopper But Nordstrom is not a store. You know, it's not Jason where like they're you know, they're one breath away from from bankruptcy So I think for them it's more about showing up their business and yes taking advantage of a time where people might be shopping spending a little bit more money But at the same time, you know Just making sure giving people a reason and a reason to come to their store versus another when everyone is sort of fighting for those dollars right now Yeah, I Can't let you go without talking about Amazon. So I should say we do have a reporter Lisa Lacey Who is solely dedicated to covering Amazon and some of the big-box stores and actually I'd love to bring her on this program next week Just to do a deep dive there, but Diana. What can you what can you tell us? I mean, I imagine this this has to be a huge moment for them Yeah, I mean Amazon is really poised to be the big winner in all of this and any Increase in e-commerce spending is likely all going straight to them because it's all about essentials You know, it's all about stacking up on toilet paper and cleaning eyes and even things like puzzles where you know You wouldn't think you immediately think where do I buy a puzzle? You look to a place like Amazon that has a little bit of everything, you know You don't think about puzzles are us or you know, that's just something I made up But you don't think about a specialty retailer in that moment Order a puzzle last night and like they're all on back order on on Amazon until April 9th I think was the earliest that I could get a pop puzzle which blew me away Yeah, they're really getting everything from the essentials to the fun items and with that they're seeing a huge increased demand They're hiring a hundred thousand new workers But that demand is starting to wear on them and a little sneak preview is Lisa Lacey as you mentioned she has an amazing story coming on sort of what that strain looks like for Amazon and You know these customers are these prime members are used to getting their deliveries in a day or two And with that strain and with that delay it can be up to a week It can be multiple days, you know things are on back order And so it's sort of having to adjust the expectation of customers That really Amazon made those expectations for themselves And I know it's sort of like the this kind of influx of business can be a blessing and a curse Can you say anything about just how their Scale up has gone both in terms of you know staffing You know, you know staffing up in order to handle the demand and then also Yeah, we have been complaints from Amazon workers that they're not doing enough to help them and you know It is just inevitable as the pandemic continues that Amazon warehouse workers will be sick and That's something that they're having to deal with and if they are meeting warehouses if some second and really doing Deep sanitization, but you know, it's really an ongoing discussion and ongoing complaints are being heard from workers that maybe He just isn't isn't doing enough to them. Yeah, and just on the you know on the other end of the spectrum You mentioned earlier a little bit about direct-to-consumer brands. We I we just had you know Right before all this started. We had our challenger brand summit in New York a few weeks ago where we were talking about Direct-to-consumer you know, we were talking to and about direct-to-consumer brands talking with a lot of CMOs and Coronavirus was not yet really a huge part of you know, their conversations. They were having about strategy But how what are you hearing from D to C brands about how they're navigating this? Does this change the strategy landscape or are they well-positioned enough that their course? I think they are well positioned and from what I've heard, you know For the most part they're staying the first we are seeing some of these brands You know do charitable giving and donating, you know, 10% of their proceeds to Charitable organizations to help with the coronavirus. So I think they're even a position in a position now I feel like they can give up 10% of you know, their proceeds With these organizations and I think that speaks to the fact that their businesses are strong online and that's really where consumers are finding them and you know, I look at brands that Are really about lounge wear or where and this is a time for people, you know Maybe to purchase those things and I think those brands are in a in a good position as well But yeah, definitely not relying too much on brick and mortar is you know something that and it's funny Because I feel like in direct-to-consumer there's been a lot of talk about how these brands need to get more in brick-and-mortar They need to do more they need to they can't just exist online And now with all retailers being forced to only exist online It shows that you know having a strong digital presence is just as if not more important than a strong brick-and-mortar presence Yeah, I love You know something you mentioned and a theme that has come up on this show every day has been Brand taking this opportunity to build goodwill. So I think it's interesting that seeing those donations happen as well You know both doing it for the right reasons in the short term, but I think short some let's see You know with customers in the long term So Diane we always end on a Yeah, a bit light-hearted and you being our brands and retail guru I want to know what what are you shopping for right now? What what's coming to you? I can't lie with the Nordstrom 25% off sale I did take the opportunity to replace a pair of sunglasses that I had that broke on me last summer I'd had them play ears and I thought about just going to get them fixed But it was it was really like a true snap in half So when I went there like you can't do anything with these so I took the opportunity to replace the sunglasses And I'm thankful for the 25% off because they're they're not a style that go sale often So of course, you know doing my you know every other week or every week trip to the grocery store That's sort of the focus of my shopping as well. Yeah, it's interesting I've seen my shopping shift a couple of weeks ago. It was all about buying like bleach Last week was all about getting my pantry in order this week I've started to get my home in order and bought some exercise equipment Indoor trampoline for my son and a little stair stepper self and actually something we can talk about if I'm trying a Description boxes for the first time because I'm finding because I can't go out and shop And I'm wanting to just you know do a little something to treat myself in the madness So I signed up for outfit fun and cause box And so anyway, yeah, but it'll be interesting. I think every week to week That you know, we're seeing the shifts and what kind of items are running out and what what people are focused on on getting So Diana, thank you so much for being with us today. I really appreciate appreciate you bringing The insights into how this is playing out in retail And I want to thank all of our viewers for joining us Tomorrow tune in at one o'clock Eastern You'll see Chris Aaron's our managing editor who was here earlier in the week is going to be talking with Sarah Jurty our Publishing editor So a completely different part of the industries that we cover Really looking at media and publishers and how this is all playing out there I want you to know how you can get in touch with us So you can send us an email at adweek together at adweek.com I would love to hear from you just regarding what questions. Do you have what topics would be useful to you? I'm happy to bring your questions on to the show and answer them and your topics will help us Program this show going forward. So thanks for your input also feel free to drop a comment in LinkedIn on face back on Facebook and Also on IGTV on Instagram of several places you can get this and finally you can find all of our episodes On adweek.com at adweek.com forward slash together. So thanks so much I hope you all have a good afternoon a good evening a good morning wherever you happen to be tuning in from and we'll see you tomorrow