Before COVID-19 hit, the retail sector was showing positive signs. Wages were up, and consumers were spending more and more. 2019 was a record year, and 2020 looked set to be even better.
With the arrival of the pandemic, however, things suddenly turned from rosy to dire. All of a sudden, governments worldwide forced shops to close and retailers to shift their entire operations online. It is the biggest shock the retail sector has ever faced – or probably will ever meet. It is bigger than the financial crisis of 2008 and more immediate than the shift to internet shopping. It’s huge.
The retail sector, however, isn’t inert. As soon as executives saw the writing on the wall, they changed tack. Coronavirus was going to knock out their retail operations, but that didn’t mean that their businesses had to die. Instead, they saw it as a new opportunity to fundamentally change how they operate.
COVID-19, therefore, is proving how adaptable the private sector is to changes in circumstances. Yes, some workers who are no longer required will find themselves laid off, but that doesn’t mean that it is the end of the road. If the underlying business model is sound, then enterprises could still thrive.
Current data on coronavirus suggests that it can survive on surfaces for around three days. Therefore, it seems that the old days of picking products off shelves and putting them in your cart is over. That sort of behavior isn’t safe.
Some stores, therefore, are looking at ways to pack carts for the customers without risking cross-contamination. One way to do it is for customers to order the products they want in advantage and then simply collect them, bagged up and ready to go from the store.
No-touch stores are also increasingly looking at using contactless payment methods. Fortunately, people built out the infrastructure for this before the emergence of the crisis. COVID-19 will force any stragglers to adapt quickly.
Personal space maintenance
Historically, retain environments were packed with crowds of people, all passing within inches of each other. Nobody paid it a second thought. Today, though, brick-and-mortar retailers have to find ways to adapt to new social distancing rules to protect customers.
So far, we’ve seen several innovations. Some stores, for instance, are making customers line up in queues outside, and only allowing a few into the store at any given time. We’ve also seen the implementation of social distancing floor stickers, showing people where they need to stand to protect themselves and others. Minimizing the perceived risk of infection is going to be vital in the weeks and months ahead.
More local options
Authorities are clamping down on people traveling vast distances for anything. That new reality means that retailers are going to have to provide more local options for their customers. People simply can’t travel across town – or they don’t want to.
People will probably switch to more local shopping even after the COVID-19 threat passes because of their love of mom-and-pop shops. According to the data, visits to such stores are up more than 68 percent during the pandemic, compared to the levels before. Savvy citizens want to avoid the massive superstores where the perceived risk of infection is more significant.
The rise of virtual options
The pandemic shows that people can do all sorts of things online, from learning to exercising to dating. Shopping, therefore, will surely join them.
Retailers who can adapt to this new reality will thrive. They will be able to reach all their customers and send them goods through the post. Those who do not, however, will likely miss the boat and permanently lose prospects to their competitors.
The pandemic is making people more comfortable with buying things online. Things were changing slowly before the crisis, but they are now rapidly accelerating. People have no choice but to log into online retail accounts and start shopping. Going to the mall to buy clothes isn’t an option.
Retailers are becoming more conscious of where they source their goods
Most consumers don’t follow up supply chains for products in-store. They just take them off the shelf without asking any questions about where they came from. The same, however, is not true when they shop online. All of a sudden, provenance becomes essential, and customers do their research.
COVID-19, therefore, is pushing the retail industry in the direction of transparency about product sourcing. Customers expect online enterprises to include some information about where their clothes or electronics are made. And they want reassurances that they have been sourced ethically.
Retailers now understand the value of social media
Social was once seen as a fringe market – somewhere trendy retailers hung out, but totally inappropriate for the mainstream. The lockdown, however, is changing all that. People are desperate for connection with retailers and to replace the traditional in-store interactions.
The level of social interaction has increased dramatically since the outbreak of COVID-19. People are checking their news feeds more often and turning to social media to connect with people they know. This change leads to an increase in traffic volume, giving retailers more opportunities to tap into potential sales.
Interestingly, social traffic increased during the early months of the crisis, even while other channels declined. People, for instance, stopped relying on affiliate and search results to find the products that they wanted. Instead, they tapped into social media and combined their social life with their shopping.
Retailers, therefore, are changing their marketing strategies accordingly. We see big pushes across all the social networks from traditional brands.
COVID-19, therefore, is remaking the retail sector. The industry will inevitably shrink. It is unlikely we will see a return to 2019 levels of spending or activity in the industry – at least not for a long time. The sector, therefore, is going to have to adapt to a brand new reality – one that nobody expected just a few months ago. How it will ultimately play out is anyone’s guess. One thing is sure, though: nobody should count out retail companies.