That’s what this pandemic is all about! The corona virus aka COVID-19 has tormented the world’s harmony over the last few months and the entire globe has taken a hit. None of the catastrophes have ever been this devastating and affected the retail industry to such an extent. The global retail scenes have faced the hardest hit, not only in a few developing countries but have drastically been a headache to the superpowers as well.
With many nations worldwide, still in lockdown amid the corona virus pandemic, a big question lies in front of the retailers – how to make the supply possible? It’s been difficult for them to discover new ways of supply and cope up with the rising in e-commerce demand. Even after making tons of efforts, and doing their best, it has been a troublesome job to meet the demands of the customers and satisfy their needs!
As per the recent data, sales have been down by almost 25-50% for retailers.
To date, around 2 million people have been infected by the virus globally, and thousands have lost their lives. The market has taken a large hit, trillions of dollars have been lost and even predictions have been made that the world is going to face severe conditions than the Great Regression of 2008-09. The impact caused by the outbreak is different on every retailer, depending upon the country and the customer’s requirements. With the jeopardy going around, people are avoiding being gathering together, forming a crowd at places and that is hurting traffic for the physical retailers, especially malls and supermarkets. People are staying in houses and have stocked up the essentials like grocery, drugs, etc. and this will see a rise in the near future.
As the restaurant industry temporarily paused, the total consumption was supposed to remain the same, but such a situation isn’t observed. It is difficult for retailers to import and export goods worsening the supply chain. Just as there have been stoppages at state borders and other areas, there have been delays in delivering goods to the consumers both by offline and online means. Other long-term consequences of the pandemic would be reputational damages- as the consumers will neglect the retailers due to some reason or the other, and choose another brand. The impact has been significant as there is no revenue flow. The entire consumption chain is going to face the impact of store closures. To ensure continuity of retail stores, there is an urgent need for immediate economic stimulus.
Disruptions in Supply Chain
As the COVID-19 spread through China to several countries, concerns about the impact of the pandemic over the supply chain have been a talk-of-the-town for weeks now. And across retails these concerns are and will be wandering for months. Amid the outbreak, the factories have been shut down, production has been stopped and there’s no shipping of goods. China has hit its lowest manufacturing indices since the great regression and being the largest exporter in the world, the impact has been pronounced. This has affected the countries over the world whose imports directly or indirectly are dependent on China- disrupting the global supply chain. The major disruptions have been caused by the sudden increase in demand for certain commodities. Like the sales of cold and flu medicines have risen by 861%, hand soap by 512%, noodles by 578% and dog food by 947% further increasing the issues of the retailers
According to Alphaliner, the outbreak had rendered 9% of the container fleet inactive by late February.
Whether it be brick-and-mortar retailers or online stores, customers do not rush to buy commodities from the fashion sector and hence it has suffered minor losses only unlike other sectors that are already facing their greatest damages with the turmoil in the supply chain. With the spread of the virus not tapering off, the consequences are going to be fatal in the upcoming days.
The Surge of Retail Apps
Amid the lockdown worldwide, people are not able to go outside and buy gods as they used to do earlier. In this tech-savvy era, digitalization has been the only way out. It is predicted that numerous e-commerce companies will get more profits than others in this lockdown, and why not?
As per the recent metrics in March, the in-store sales of Walmart jumped by 20%, while the online sales surged by 30%.
As Alan Behr-Partner at Phillips Nizer says- “If your customers are worried about human contact, therefore, your business has a new and unexpected challenge.” People have chosen online apps of retail stores over risking their own lives to buy goods for themselves. There has been a surge in online retail apps downloads as they have hit the second-highest level, catching up to the amount seen on Black Friday 2019. Traditional malls and general stores have already been facing declining traffic and thereby have shifted their entire focus on their online apps. They have buckled themselves down and are trying to provide every commodity to the customers through the apps. There will be massive gains in the e-commerce delivery services of retailers in the future days. Online retail sales have been blooming already and will see a surge in no time as people will spend more time indoors and avoid contact with the public.
Due to the shutdown in the retail sector, many had predicted that e-commerce and online sales would benefit and will rise to new heights. And looking at the current situation we can’t disagree. As far as retailers are concerned about the outbreak, it’s high time that they invest in the app updates and to keep the customer engagement high, look at the content creation- which may specifically include certain blogs or daily hacks on survival, less consumption and making the best out of available commodities. In the upcoming weeks, it is vital how consumer behavior is going to develop and adapt to the changes happening as it is extremely difficult to predict now and the future seems unclear. Although, one thing is clear for sure that digitalization undoubtedly is going to play an extremely big role in the nearby future!