The global spread of COVID-19 since January 2020 is resulting in a slowdown in economic activity across the world. While COVID-19 spreads globally, the retail industry braces for the outbreak’s fallout.
Insights and Trends depicting the current state of the Retail Industry
- Over 1/5th of Americans are directly employed in retail and hospitality, including stores, bars and restaurants, tourism, and entertainment. That’s more than 32Mn people working in an industry that’s currently being hammered by widespread closures and layoffs due to COVID-19.
- Centers for Disease Control and Prevention recommended canceling gatherings of 50 or more people for the next 8 weeks.
- More than 25% of U.S. respondents told Coresight that they’re avoiding public areas at least somewhat, and 58% said they plan to if the outbreak worsens.
- Expected loss to retailers £26 billion due to COVID-19 (Source:Statisa)
On the e-commerce front
While COVID-19 is hurting in-store traffic for some retailers, others have seen surges in online shopping, as anxiety over the virus increases.
There’s an unprecedented demand for online groceries in Europe and North America.
- Instacart plans to add 300,000 personal shoppers during the next 3 months as demand for grocery delivery surges in North America.
- However, Retail organizations are taking the further steps to protect their employees and customers from the growing spread of the coronavirus by closing e-commerce sites. For example, L Brands, parent company of Victoria’s Secret, announced that it has paused e-commerce orders and begin closing distribution centers.
Havoc on the global Supply Chains
Planning & supply chain disruptions will linger for months, threatening retail’s two busiest times: The back-to-school and the holidays.
- Losses for U.S. retailers — from production and transportation shortages— could amount to $700 million from March 9 to April 20, according logistics start-up Zencargo.
- Roughly 20% of U.S. retailers’ supply chains are exposed to China, according to Cowen & Co.
- According to CO, Retailers have moved to keeping far less inventory in stock, and manufacturers, afraid of ending up with too much excess inventory on hand, are producing goods on more as-needed schedule.
Due to the pandemic, the net result for retail may be that a few retailers emerge stronger than ever, and that many specialty stores and independents no longer exist. Even well-positioned retailers may find they have to permanently close under-performing stores and take drastic cost cutting efforts to bolster their balance sheets. The future is uncertain. Thus, retailers need to think about all of the scenarios and plan accordingly. Accelerating their digital customer service and engagement strategy, whether it involves messaging, chat, co-browsing, email, social, or self-service can help retailers sail through this period.
The next blog will cover:
- A list of suggested strategies that retailers can look to implement to cope up with COVID-19 crisis.
- Ways to adapt the Retail Experience in response to COVID-19.
- Examples of brands implementing key actions to mitigate the effects of the crisis.
Stay tuned to discover more!
Read the next blog : Out-of-Box Retail Strategies to Combat Covid-19