The world is anticipated to eventually go back to normal after the hectic start of 2020 and the worldwide lockdowns that resulted from anti-Covid-19 measures.
The retail sector was among those hit the hardest by the pandemic.
As a result of measures aimed at curbing the spread of the coronavirus, the global retail market is expected to decline from 21821.4 billion US dollars in 2019 to 21622.6 billion dollars in 2020. The CAGR over that period will be -1 per cent but a recovery of five per cent will be observed from 2021 to 2022.
How is the retail sector planning its recovery in a world after Covid-19? Here are the immediate measures being taken today and the more long-term changes that will potentially stem from the unprecedented slowdown that occurred over the first months of 2020.
The eCommerce Boom Will Be More Real Than Ever!
One thing is certain – Covid-19 has accelerated whatever processes were occurring in the ecommerce world before.
There has been a 129 per cent year-over-year growth registered among Canadian and US ecommerce orders in the period from January to mid-April 2020, a Forbes report suggests. Similar trends have been observed in other parts of the world, as well.
Even businesses that did not have a strong online presence in the past are now considering the shift.
Not only does ecommerce make operations independent of a brick-and-mortar location, it also enables retailers to reach larger national and even international audiences. Hence, the investment in the development of ecommerce and mobile solutions will pick up significantly (it has already started doing so).
It’s also been noted that even sectors that haven’t been digitally strong up till present are starting to embrace the shift. eCommerce has already taken over as the preferential method of product acquisition for many people in the Western world and Covid-19 has only provided a strong push in the same direction.
Operational Changes at Brick-and-Mortar Locations
The world will never be the same in the aftermath of Covid-19.
While retailers anticipate rapid traffic rebound upon opening their physical locations, the way in which operations there are organised will change.
Traffic control, physical distancing and enhanced sanitisation/disinfection measures will remain standard practices for many months to come.
Once stores reopen, they will have to consider new organisational flow options that will enable servicing large customer traffic without jeopardising anyone’s wellbeing.
As a result, choices like self-servicing kiosks, virtual and augmented reality and even robotised solutions will flourish.
Some other anticipated changes include a reduction in operating hours, as well as having fewer staff members present at any given time to reduce the risks for these professionals.
Service Periods and Return Policies
Immediately after going back to operations, retail venues will also have to reconsider some of the protections that clients benefit from.
Warranties, return periods and return-handling policies will all have to be modified to account for some of the operational changes mentioned above.
Adult toys retailers in the U.S. like HotCherry have always had a strict return policy, but now even more mainstream retailers than ever before are not processing returns right away.
The periods for the provision of such services is likely to be extended so that smaller teams can handle all client requests.
Current reports suggest that many store return policies have already changed in response to the pandemic.
Simple tasks like returns at a store are becoming more difficult now. In addition, dozens of events had to be cancelled or rescheduled. Because of all these hindrances, retailers have to be quick on their feet. They have to offer excellent customer service while also accounting for the challenges.
Reports suggests that many businesses have already extended return and cancellation policies by anywhere from 30 days to several months. Chances are that these longer periods will stick in the long run. A “say yes” attitude towards accepting such returns and complaints will also have to propagate and become the new normal as economic slowdown is anticipated and many retailers will have to work hard on maintaining their customer base.
Bigger Focus on Value-Added Products
Consumers have altered some of their spending habits because of worries about the future.
Retailers have been forced to respond quickly to the shrinking demand. A reshuffling of inventories has already occurred and those quick enough to anticipate new trends (or even create some) have benefited from the situation.
Clients are cutting out unnecessary spending because they’re troubled by the prospects of losing their job and having to go through a financial crisis that’s projected to be bigger than the one that hit the world in 2007.
Even within the essential products sectors, buyers are only sticking to a couple of staples that they acquire on a regular basis.
Retailers will have to reimagine their inventory and put focus on value-added products and solutions.
Value-added products typically deliver a bigger margin than staples and they can quickly build their loyal group of buyers. When the customer has the perception of added value, they will become more likely to spend more and to be satisfied with the purchase. Needless to say, both of these are essential for long-term consistent growth.
The Bottom Line
The world has woken up quite shaken after the first few months of 2020.
Covid-19 lockdowns have produced many challenges but they’ve also given birth to some brand new opportunities and retail trends.
We have all found out that we can work from home, we can shop from home and interact with loved ones remotely.
Something similar has also happened to the interaction between customers and brands.
Brands that have embraced digital trends and innovative, relevant products, have flourished at this challenging time.
More businesses should be maintaining such flexibility. Being quick on one’s feet is vital in a world that is evolving rapidly. Covid-19 has shown us all that we cannot be prepared for all kinds of circumstances and emergencies. As long as agility is maintained, however, such issues can be overcome in an optimal way that contributes to the least disruption possible.
