It’s no secret that COVID-19 has changed nearly every industry. From supply chains to store shelves, the way businesses manage their infrastructure and customers has fundamentally changed.
Retail has been particularly challenged by the virus in the way consumers shop, search, and spend. Organizations have fought to catch up in these uncertain times.
How has the pandemic changed the retail landscape?
Despite hopes that changes in consumer behavior would be temporary, studies have shown the new habits adopted by shoppers are not likely to change any time soon. One of the strongest trends has been a renewed shift toward e-commerce and online shopping. While this has been a steady trend in recent years, COVID-19 has accelerated the fall of the shopping malls and the end of many former retail titans such as Pier 1 Imports.
This stark drop in physical retail shopping could transform the retail real estate market. Less revenue from the in-person business could mean a decrease in the need for brick-and-mortar store locations, causing an explosion of demand for warehouse facilities primed for e-commerce supply chains. Online stores will continue to pop up as well, as more and more brands try their hand at e-commerce as their physical locations flounder.
Nationwide lockdowns have also led to rapid shifts in consumer needs that escalated new e-commerce channels. Online grocery shopping and food delivery have benefited from these shifts, and are anticipated to become mainstays in the e-commerce environment.
How can retailers survive in the current environment?
COVID-19 and quarantine have also transformed what people search for. While interest in travel equipment and workwear dropped, searches for sports equipment and household goods have seen a sharp increase in demand.
Through this tough time, costs are a huge concern for retailers. Many try to cut costs where possible, and the best way to do that is to eliminate real estate spending and invest in technology, automation, and order fulfillment. Another important step for retailers to take is to diversify their supplier network. Being more flexible makes companies less vulnerable and more resilient to supply chain disruptions.