Journey of Retail Industry during COVID-19 Outbreak
The effects of the Corona pandemic globally have given rise to significant concern as to the future of the economy.
The virus’s toll on human health has led nations the world over to implement stringent measures on their populations, limiting their movements and working capabilities. The retail industry, especially, is facing unprecedented vulnerabilities in its supply chain.
Retail businesses are searching for new solutions to manage and are trying to cater to the increase in demand for particular products. Read on to find out how customers and the retail industry are dealing with the current situation.
Ambivalent effect on online sales
Certain e-commerce classes are inevitably going to benefit during this predicament. IMRG data definitely reflects this sentiment as the beauty and health categories in the UK e-commerce sales have been growing since March 15th. Even the online sales of electrical equipment in the UK have been growing as customers are choosing to opt for the online purchase of essential supplies.
Notably, IMRG data also mentions that the overall online retail sales are on a decline. There is a rise in weekly online sales, however. The increase or decrease of online sales in light of the continuous lockdown will be interesting to observe, especially if there are any significant differences in various categories.
Clothing sales are facing a decline with some fashion e-commerce brands even being unable to deliver pre-existing orders. Certain e-commerce retailers that are not able to keep up with the delivery and fulfillment resources required to run sales operations, are opting to close online sales. The retailers that are continuing to sell their products online are informing their customers that the delivery can suffer from long delays.
Growth in Retail Apps use
A noteworthy occurrence is a surge in retail application usage. POQ, a SaaS provider, reports that retail app downloads seem to have reached the same level of record numbers it does during Black Friday sales.
Apps have also been performing better than mobile web browsing. The causal factor for the rise in both sessions and conversion rates in apps seems to be weariness.
As retail mobile applications provide copious and creative content, customers are likely to look forward to such content to combat boredom. Retailers are likely to find the outcome to be favorable if they invest in updates for their apps and generate more content for apps to attract customers’ attention.
Focus on health and safety
The health and safety status of working employees, especially in the warehouses, has taken center stage in recent times. Employees feeling unsafe and afraid to work is not very surprising given the present conditions.
Complaints ranging from not being able to follow the minimum distancing rule to the lack of protective gear (like sanitizer and gloves) have come to the forefront. Some complaints of employees even state that regulatory sick pay is not adequate to live on and that working despite being ill appears to be their only option.
Where the challenge lies?
According to a recent report, no retail business is likely to admit its negligence or lack of stringent protective measures for its employees. The complaints of certain organizations’ employees have cast a light on the ethical practices of companies.
This information has led to a critical debate on social media, where companies offering paid leave are in a favorable position while companies neglecting employees’ safety for profit have become infamous to the public perception.
This particular aspect also highlights how much damage an organization’s reputation can suffer from in the long run due to the Corona pandemic. It can also have a financial impact as consumers can choose to boycott the organization and its products even after the crisis period.
While some retail businesses are on the receiving end of criticism for their response or the lack of it amidst the Coronavirus spread, others are earning commendations for their commitment to do better work.
Some retail outlets are donating essential supplies to people who are unable to receive deliveries. Few retailers are indulging in providing stock to food banks, with some groceries, in particular, being restocked every day.
Among prominent retail businesses, quite a few are donating funds to charities and other welfare organizations. Giant retailer, Ikea is keen on implementing suitable actions wherever possible.
In the UK, a drive-thru test center to check for COVID-19 is functioning because of Ikea. It is also looking to identify other sites to provide support to the government. Some retailers are also keeping their food sections open to provide help to the elderly, vulnerable groups and key workers.
Supermarkets’ amelioration on restrictions
The fashion and lifestyle retailers are probably going to be the hardest hit during current times while the food and grocery retail sector are witnessing a sudden surge in demand. This demand is because of consumers’ panic buying which in turn is a response to the uncertainties related to closure and stock-outs of stores.
The Indian retail sector’s predominant problem lies with supply chain issues like logistics and transportation. The movement of non-essential goods is at a standstill due to existing lockdown restrictions.
- The governments and retail sector, perceptive about the demand for essential goods, are working hard to satisfy consumers. Many companies are enhancing their click and collect and home delivery services and are focusing on expanding their holding capacities in the coming days.
- Apart from the above actions, supermarkets are making further changes to past restrictions on products and services. Some outlets are doing away with all restrictive measures while others are partially removing restrictions on specific goods. These measures are in place to reduce extreme stockpiling and to ease the pressure on supermarkets.
- The short-term effect on the retail industry is going to be grave as there will be a loss of major revenue. The long-term effects though are harder to estimate as it is dependent on the longevity and severity of the pandemic. In case the virus outbreak shows signs of lessening, convalescence is possible when people resume their previous routine of life.
- The situation can turn worse for all parties involved; in case the outbreak extends for months on end. Governments across the world are cutting down lending rates to assist consumers. This will be a help for the private sector and vulnerable citizens.
The retail industry’s steady growth is showing signs of decline for the first time since the recession. Online retail is likely to grow as there are limits on consumer movements outdoors.
The delivery services of groceries and restaurants are also showing massive growth. The only thing to be done now is to wait and watch for any signs of improvement.
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