The COVID-19 pandemic marked a period of great difficulty for businesses. Those that are engaged in the retail industry are mainly on the loose end. From demand fluctuations and supply disruptions to labor shortages, a lengthy list of problems made the pandemic incredibly stressful for retailers. Now, over a year into the health crisis, the retail industry has evolved into a completely different landscape with no plan of returning to “normal.”
COVID-19 and Retail: Assessing the Impacts
While the impact of the pandemic has rippled across all industries, some businesses were more vulnerable than others. Those that rely on face-to-face engagements and regular travels are especially more affected. Naturally, the latter includes the retail industry. Since most retailers depend primarily on in-store product demonstrations and personal transactions, it’s among the most affected by the pandemic-induced upheaval.
In 2020 alone, the industry already reported unprecedented damage, with a record of over 12,000 U.S. store closures due to the pandemic. Now, over a year later, what appeared to be a time for retailers’ great comeback was interrupted with the emerge of the COVID-19 delta variant. To date, researchers are even expecting some additional 10,000 closures for 2021.
Traditionally, customers are more inclined to buy a product only after seeing it in person. Such enables them to assess the value and potential of a product. Likewise, payment methods were direct and personal. But with the coronavirus outbreak, consumer behavior abruptly evolved. Online shopping gained special traction and was preferred over in-store purchases. Likewise, contactless transactions and store-to-door delivery services took on the spotlight.
Consequently, brick-and-mortar retailers were forced to migrate to the online world. Face-to-face product demonstrations were abandoned for all-out digital marketing. Similarly, online payment and cash-on-delivery options became the norm. In less than a year, retailers found themselves in an evolving business landscape.
Selling in Times of Crisis: Three Ways the Pandemic Changed Retail
Still, despite the unprecedented challenges, it’s quite commendable how the retail industry continued to demonstrate resiliency. As retailers attempt to keep up with the sudden changes in consumer demands and preferences, they’ve started to re-write the traditional rules of retail.
Among the biggest trends in the industry that are currently redefining retail include the following:
1. Shift to Online Stores
The battle between physical and online stores has been going on for years even before the pandemic. However, the coronavirus outbreak gave favor to the latter. Since the COVID-19 spreads mainly through close contact, remote transactions were preferred over face-to-face ones. Consequently, what were once physical stores were forced to adapt and embrace online selling.
According to Statista, 2020, which marks the year of the pandemic, recorded over 4.2 trillion U.S. dollars sales in e-retail worldwide. That makes up 18 percent of the global sales in retail for the same year. Unsurprisingly, these remarkable figures continued to balloon even in 2021. To date, there are already more than 2.1 million online retail stores in the US alone.
2. The Rise of One-stop Shops
The pandemic has significantly restricted travels and movements. Rarely do people go out of their houses anymore. During the rare occasions that they do go out, they want to accomplish everything in one go.
This shared behavior among people spawned the surge of one-stop shops during the pandemic. These refer to stores that offer a variety of products, ranging from essentials to non-essentials. Basically, their purpose is to provide outlets where customers can get everything they need.
From food and toiletries to even school and office supplies, many retailers now invest in diversified product offerings. Such trend has also expanded to online retail outlets, enabling shoppers to cut down shipping fees and receive their orders in one go.
3. Incorporation of Augmented and Virtual Reality
The pandemic made every sector appreciate technology more than ever. From healthcare services to educational programs, everything became possible primarily through digital transformation. Likewise, this tech-reliance amid the coronavirus applies to the retail industry, too.
Augmented reality (AR) and virtual reality (VR) are especially enjoying popularity among retailers today. Both technologies allow remote customers to see, feel, and experience products before they can buy them. In a way, AR- and VR-powered retail sites promise a traditional in-store shopping experience without the hassles and risks of being in a physical store. Among the common features customers can enjoy are the chance to virtually try on clothes and accessories and even try out makeup products online.
With the pandemic expected to stay in the long haul, the retail world is bound to change and adapt. These top key trends are on the way to redefining the rules of selling and shopping.