Dylan Carden: So as far as sort of what to expect from the current recession and maybe some long term implications, we really call out five major themes. Those are for the importance, the growing importance of basics moving online. So you've seen a lot of online migration for some spaces such as apparel.
One thing that has lagged though has been groceries in particular, and basics more broadly. And so what we've clearly seen in this environment is a need in organic demand being generated by stay-at-home orders. It's been expensive and sort of an unprofitable endeavor for grocers to offer delivery and pick-up, and by the same token they've tried to pass whatever costs they have to layer on to get those services to consumers to the consumer. So we've seen prices anywhere from 20 to 30% higher in the grocery space.
The other major theme that we really see coming out of this recession it's just the incremental importance of value, and this was true in the last recession. And so it's been talked about for a while, but really the only thing the consumer really wants right now is a deal.
The other major theme we called out, we think this is going to be increasingly important, is the utilization of inventory. So apparel and accessories is an extremely wasteful industry. But really the entire focus on the supply chain has been on trying to get the cost of production down. And what that’s done is essentially created this capacity to over-produce. And what you're starting to see now, is a much greater focus on production efficiency.
And then you know one of the more obvious and bigger themes that people talk about is just supply rationalization. This was a theme that was happening for a long time. So a lot of the sort of pre-internet IPO growth was focused on store growth. And what you saw are these fleets that developed. And if you consider that the online penetration was also growing simultaneously, supply was ballooning in a sort of irrational environment. But broadly speaking, you're seeing a lot of companies now start closing their outlets. We think that gets accelerated in this environment. Quite clearly you already seeing that for some of the legacy retailers.
And then finally, the one theme that we're seeing in this type of environment that's a lot harder to sort of quantify, but clearly will have ramifications longer term, is just companies' capacity to speak to their consumer. And we think what's happening there is the sort of end result of a long run of essentially false advertising, or misleading advertising, and that sort of culminated in the importance of influencers ultimately on Instagram. And that turned out to be one of the more effective ways to advertise, so you know coming out of this environment, and what you're seeing in this environment is a greater focus on a company and a brand need to embed themselves honestly in a consumer's life.
So it's a much more creative marketing field, which ultimately I think you know could drive real serious engagement. And then that's kind of, that sort of the five major themes that we think are sort of evolving in this environment. Thanks for listening.