Understanding the COVID-19 Impact on Retail Businesses
No doubt that the retail industry was affected by the COVID-19 pandemic. The massive shifts in priorities and concerns are indicative of what industries are still managing to get by amidst the transition to the “new normal.” On the other hand, there are also some industries that are struggling to stay afloat due to these shifts in consumer behaviour.
The retail industry is one of those unique industries that adapted to the quickly shifting landscape brought by the COVID-19 pandemic, while also getting through brand new struggles. Consumers now may not realize it, but their actions and habits towards retail businesses helped in both the boost and decline of particular areas in the industry. Here are a few insights on how the COVID-19 pandemic affected the retail industry.
A Paradigm Shift
The retail industry encompasses everything from electronics, groceries, furniture and wellness. From the outset, we can already see which aspects of the industry are still managing to get by amidst constrained suppliers and disrupted demand. According to a report from StrategyAnd, the food, grocery and wellness industries saw increased growth during the outbreak. Another report from GrowByData reiterates this, showing a 53% and 48% growth rate within these two industries. This should certainly come as no surprise as more consumers opted to stock up on various essentials during the quarantine period.
At the same time, both reports also show declines in retail industries like apparel, the arts and electronics. As people’s immediate priorities shifted and services only focused on “essential items” during this COVID-19 pandemic, it was apparent these industries would struggle the most. Additionally, many local brick and mortar stores are feeling the effects of the disrupted demand due to their limited reach and supply.
The Road To Recovery
So where does that leave us? As with most things, this outbreak is only temporary and will eventually subside. That means returning to usual operations under what can be called the next normal. While there are still many unknown factors to consider, we are already seeing emerging trends in how consumer behaviour will evolve once this period passes. In an effort to recover from it, companies can look at the following approaches.
We mentioned last week that the COVID-19 outbreak revealed vulnerabilities for some companies that affected how they operate. We also talked about how these challenges also brought about new opportunities for them to change and develop as part of what is to come. The retail industry can assess and define what roles, approaches and functions are more required, especially those that favour modern solutions over antiquated ones.
Leverage An Online Presence
One of the things we’ve seen during this outbreak period is the importance of contactless, online transactions. Companies that have strong online presences were able to withstand some of the worst parts of this outbreak as a result.
Considering a digital approach for businesses that need it will help them not only recover from the effects of the outbreak but ensure they are prepared for future trends in online retail.
Increase Flexibility Through Digitalization
More than anything, a digital approach will help businesses become more flexible. As newer technologies begin to translate into better productivity, it will not be surprising to see more of it in the coming months. Prior to the outbreak, many businesses were already looking at this approach as part of their overall strategy for 2020 and beyond.
Integrating offshore teams with their local ones, for instance, helped them cover vital roles while also allowing them to explore new opportunities to expand. Though many strategies were put on hold due to the outbreak, allowing for more flexibility in roles and strategies will greatly help with the recovery process.