Marketers have ramped efforts to generate sales online, leaning on social media, mobile ordering apps and web stores in a bid to avoid a complete loss of revenue from the coronavirus pandemic.
Advertising dollars are also at stake with the shift.
New York-based digital research firm eMarketer Inc. updated its forecast for the year saying online marketing spend is expected to total $691.7 billion, up 7% from a year earlier. That’s off from the 7.4% growth predicted prior to the novel coronavirus outbreak.
Area retailers that were forced to temporarily shutter their brick-and-mortar fleet earlier this month took to online promotions. Pacific Sunwear of California LLC of Anaheim took as much as 30% off certain items throughout its online shop.
Costa Mesa-based Volcom LLC, after announcing the temporary closure of its brick-and-mortar stores, last week reportedly furloughed most of its workers in the U.S. and all in Europe, placing everything 40% off online.
The action sports brand, which could not be reached for comment, told industry trade publication Shop-Eat-Surf, “We are being proactive across the board because we don’t believe that the market is going to turn around anytime soon and we owe it to our employees to not manage the business with optimism.”
Irvine-based Tilly’s Inc. (NYSE: TLYS) continued a 20% off sitewide sale into last week after closing its stores temporarily. CEO and President Ed Thomas previously told analysts on the company’s March 12 earnings call he hadn’t expected to ramp promotions in response to a sales slowdown and instead was closely monitoring inventory. The retailer, at the time, was already seeing an indication it would likely see delays of new product through June.
Restaurants Selling Essentials
Meanwhile, the restaurant industry was identified by MediaRadar, a New York-based ad industry research firm, as being one of the most at-risk industries as it relates to spending on advertising this year as a result of COVID-19. That’s in addition to the auto dealer, tourism and film industries. Restaurants and bars accounted for the largest amount of ad spend in the second quarter of 2019, totaling nearly $1.2 billion, the firm said positing that amount was now at stake given the pandemic. That spend was across 4,500 brands, most of them larger chains.
Restaurants have since clamored to devise new ways of generating revenue with some operators now selling staples, such as Costa Mesa-based Lazy Dog Restaurants LLC’s $40 pack that includes eggs, toilet paper and other basics.
Restaurants have already been hit hard with losses. The NPD Group Inc. reported last week restaurants saw an 8% decline in transactions from the year-ago period for the week ended March 15.
The virus’ impact is why a group of operators that included Habit Restaurants Inc. of Irvine and El Torito, owned by Cypress-based Xperience Restaurant Group, made a call to consumers to order delivery or takeout March 24 and moving forward in support of the industry in a marketing push called The Great American Takeout.
