As most of the countries of the world come under quarantine and consumers around the world start to avoid human contact, retailers are struggling to adapt. The global response and the ever-changing situation of the COVID-19 will have a significant impact on the retail business. Retailers and brands face a formidable myriad of short-term challenges around health and safety, supply chain, labor force, cash flow, consumer demand, and marketing. However, successfully handling these issues alone will not ensure a bright future or any future at all. That’s because the world after we get through this pandemic is likely to be very different from the world we left before the outbreak. Hence, it is critical to anticipate the reality of a post-pandemic world for businesses to thrive.



Consumer behaviors during the pandemic may become permanent, which is likely to shape the post-pandemic commerce world. The COVID-19 is rapidly accelerating the transition to digital commerce.  As consumers are being asked to practice social distancing, e-commerce orders for groceries and other essentials have become a survival tool for many families, with a significant portion of those families trying digital grocery services for the first time. Households are likely to continue to use these services once the pandemic is over. Digital grocery orders are less profitable than traditional in-store shopping trips due to order picking and delivery costs. Furthermore, the digital experience does not lend itself to impulse buys, immediate consumption purchases, or new product trials. Again, COVID-19 or variants could re-emerge seasonally, and a possibility of an entirely new pandemic remains. This new reality is likely to make the consumers more germ cautious than ever before. No-touch deliveries may become the new normal. This will need retailers to develop no-touch customer experiences with an emphasis on hygiene. The world may undergo a severe economic downturn. As consumers become more financially conservative, consumer spending will be dramatically curtailed during this period. This has significant implications for retailers.



The shutdown of non-essential businesses has resulted in catastrophic loss of income, forcing many retailers to close their doors temporarily or even permanently. Retailers recognize the gravity of the outbreak and are taking dramatic steps to try to prevent the spread of the novel coronavirus. While some retailers have made the tough decision of shutting down stores, in some cases it is out of the retailer’s hand.  Malls are themselves closing their doors, forcing tenants to do likewise, and local and state governments are mandating some retailers to shut down for the time being. Amidst furloughed employees and strained financials, businesses and workers are stepping up to the challenge of staying afloat during a pandemic and finding new and often creative ways to continue making money.

Sales Impact. Retailers haven’t given up on trying to woo customers quite yet. Major sales have popped up across the online marketplace, often coquettishly quarantine-themed. Apparel sales targeted at the work-from-home crowd include Everlane’s two-pack deal for its ‘comfort styles.’ Madewell started offering a ‘Bright Spot’ sale on its website, and fast-fashion retailer Fashion Nova launched a ‘Stay In, Stay Cozy’ sale.

Employee Impact. The retailer Lululemon will continue to pay for employees through June 1 ‘whether stores reopen or remain closed.’ The company announced on April 2 that its senior leadership team will reduce their salaries by 20% and that the board of directors will forego their cash retainer. The funds will go to the ‘We Stand Together Fund’ to help employees that are dealing with COVID-19- related hardships. American Eagle Outfitters announced on April 2 that it is furloughing store, field, and corporate associates beginning April 5. Furloughed employees will maintain benefits and the company will fund health premiums for eligible employees through at least April. The retailer established a program through its AEO Foundation for associates that are experiencing economic distress caused by a COVID-19 diagnosis.



While businesses around the world grind to a halt amidst the coronavirus crisis, e-commerce is being deemed as something of a lifeline for the retail industry. Even though the vast majority of retailers, except for groceries and pharmacies, have temporarily closed their brick-and-mortar locations, they can still sell goods to consumers on their websites or the websites of their retail partners. As digital has long been touted as the future of retail, the coronavirus pandemic presents an opportunity for it to flex its muscles. But does the success of the retail industry during this crisis depend entirely upon the shoulders of e-commerce?

Some analysts say that e-commerce can’t carry the industry entirely, and a financial setback is inevitable. This is because many people aren’t thinking about spending on anything but the essentials with millions of consumers already feeling the pinch. Retailers like Amazon, Costco, and Target that sell household items, food, and other essentials are seeing an increase in sales both in stores and online. However, for stores that sell nonessential items, it’s been a different story. For instance, fashion retailers are not being as benefitted by e-commerce like that of retailers selling essential goods. However, since the increase in online shopping could continue long after a return to normalcy, brands that have made digital their top priority are in a better position to weather what comes next. 



The long term social, economic, and health impacts of the COVID-19 virus are still not known. Experts suggest that smart retailers are thinking about all of the scenarios and planning accordingly. There are a few key areas where retail executives should be focusing their attention in today’s highly-fluid social, economic, and healthy environment. Retailers should focus on managing demand fluctuations because while some retailers are seeing demand fall away and customers shift channels, others are facing unprecedented spikes in demand. Grocery retailers, in particular, are dealing with significant stockouts. The ability to predict and manage demand has never been more crucial. Retailers should take a close look at their current and predicted liquidity profile and assess any changes in their working capital dynamics or short-term cash forecasts. To shore up the cash reserves, many retailers are now talking with policymakers, and even engaging with lenders to refinance loans or amend financial covenants that may be impacted. Beyond simply creating a crisis communications plan, retailers must have a plan that ensures the safety of the employees and effective workforce management under different scenarios. While grocery retailers are already facing significant supply challenges, retailers that are not yet feeling the full impact of supply disruptions should think about the longer-term supply challenges and prepare contingency plans. Lastly, retailers should think about the impact these massive changes will have on the customer and the customer relationship.



Brick and mortar retailers who may be experiencing store closures, or reduced hours, should prioritize keeping in close contact with their customer base through digital forms such as social media marketing or direct-to-consumer email marketing when in-person engagement is impossible or reduced. Even though stores are closed, customers should still feel the strength of their loyalty and engagement with the brand. Although omnichannel or online retailers may be better positioned to deal with store closures, they shouldn’t lose sight of maintaining the best experience for customers. It is also critical to make sure that the customer experience on the website is straightforward and enjoyable. This will ensure purchase and engagement in a frictionless, easy way. Given so many companies have established social media footprints and followings, now is the time to keep up the momentum and use that forum to nurture customer connection and loyalty even further. Retailers should keep up with their social media accounts to not only react to customer inquiries and concerns but also proactively provide updates on your business’ current situation.

At times like this, retailers must stay informed. Resources such as Google Trends and Google Alerts can help in staying up to date on local conditions and better understand customers’ frame of mind. As customers are looking for information and trust the companies to deliver, retailers must make sure they proactively communicate any business or product availability updates through different channels. As consumer behavior shifts, adjusting in real-time is essential for retailers. It is important to make sure product information is up to date across all channels and communications.



Whether this situation lasts for weeks or months, it is clear that the global response to this pandemic has fundamentally changed the reality for the retail industry. It’s time for retailers as well as consumers to face that fact and start adapting. It is really important that retailers have a steady plan of communication, adjust marketing activities now, and handle them in the future. Contingency plans to cope with post-pandemic consumer behaviors are essential. Retail strategies for different companies will take different shapes and forms during this time.  The companies that prioritize the needs of their customers, their employees, and their partners will be the most benefitted in the long term. 


Written by

Musarrat Sarwar Chowdhury

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