Retail Observer

RETAILOBSERVER.COM JUNE 2020 50 A s I reflect on the unprecedented first half of 2020, it's abundantly clear how profoundly COVID-19 has impacted — and continues to impact — families and businesses across the U.S. There was no handbook for what we've experienced. The constant changes left most of us keenly aware of a need to quickly pivot and adapt in ways we'd never thought of, to sustain our daily lives. While there have been many challenges, there have also been inspiring and hope-giving stories of those who've cared for first responders, helped through food bank donations, and assisted those who needed essential items but couldn't leave their homes. I'm continually reminded of how resilient our country is, and of our ability to rise above major challenges. How has COVID impacted the home appliance business in the first half? The answer might depend on whom you ask. But there are enough headwinds and tailwinds to go around. First, the tailwinds. While most states had enacted shelter-in- place orders by March, appliance retailers were, for the most part, allowed to remain open due to their businesses being classified as "essential." Rightfully so, since consumers need to keep food cold and clothes and dishes clean. Throughout the crisis, it was reported that appliance usage rose significantly – refrigerator doors were opened 40% more, cooking at home increased 50%, dishwashers were loaded twice as often, and washer and dryer usage rose 22%. Those increases will drive demand in both wear-and-tear as well as a general desire or need to upgrade existing appliances. I would argue that for any retailer who demonstrated the ability to pivot and/or was already multiple- channel-ready, this new reality became a strong tailwind. With so many consumers sheltering in place, we've turned to the internet to do our research and shopping. Those dealers who had websites ready to receive orders thrived the most. Not only were they able to offer multiple ways to shop, but they could keep on engaging with their customers by chat and by showing inventory and pricing on their websites – plus, they had the ability to transact online. Both search and online sales grew more than 200% during the peak weeks in March. Beyond their websites, retailers demonstrated their ability to adapt by offering contactless curbside delivery and/or continued in-home services, using personal protective equipment (PPE). The headwinds of COVID were harder to take. Unlike the tailwinds, many of the hardships were due to events outside our control. A key example is mounting factory closures due to workers showing up to work with the virus, and/or the need for added precautionary measures for employee safety. Both scenarios left factories at a standstill for weeks, and once they reopened, yields were dropping to 60% or lower, as even more drastic measures were put in place to ensure employees' safety. These factors impacted the supply chain, as all product categories were constrained at some point during the first half of the year. Other headwinds included government mandates around worker safety, and retailers scrambling to update their websites and business capabilities to offer consumers multiple ways to shop online and by chat, phone, etc. More headwinds and tailwinds are likely to attend this ever- changing situation. One thing for sure: Retail will look very different on the other side of COVID-19, but we will all eventually get through this and put it behind us. I wish you all the best in health, happiness and a prosperous second half ahead. Doug Wrede Vice President Home Appliances, Nationwide Marketing Group Doug Wrede ApplianceTrends RO THE UPS AND DOWNS OF HOME APPLIANCE RETAIL THROUGH COVID-19

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