COVID-19 and Retail: Consequences and Forecasts

The COVID-19 pandemic has hit many businesses worldwide, and, according to Euromonitor, two of the sectors on which it took the hardest toll in 2020, were specialist retailers and department stores. It is also predicted that these spheres in retail will reach pre-pandemic levels in 2021. For apparel and textile manufacturing, full recovery is not expected until 2025.

2020 saw an unprecedented rise in e-commerce — during the year, worldwide e-sales grew 25% and are forecast to grow by 9% more in the next five years.

Apparel and footwear sectors have also been hit significantly due to wide-spread lockdown measures and switching to home-office for many. These reasons did, however, slightly stimulate sales in leisurewear, consumer electronics (specifically, computers and peripherals) and in groceries with delivery.

So what should we expect now that the world begins to recover?

Recession-like times mean that customers become more careful and conscious in their purchases and they pay more attention to the price, quality and sustainability of the product, especially if it is not essential.

Some delays in manufacturing and delivery, excess product and a slight rise in prices are expected due to temporarily closed factories and manufacturing sites, remote work and other operational challenges. Brands are most likely to put more effort into making sure their product is ethical, sustainable and environmentally friendly to successfully compete in the industry.

Major changes are already presenting themselves in retail concepts and innovations. Retailers are increasingly turning to IoT (Internet of Things) and AI technologies to raise efficiency and cut losses. The market is seeing more and more business tools that help understanding changing customer behavior, automate operations and engage with customers on new levels, examples including like footfall counting, voice analytics and livestreaming.

Even though the pandemic has brought some losses, it can also ignite technological progress and establish a more efficient and convenient shopping process. Considering a massive shift to e-commerce, most successful retail recovery strategies will include comprehensive omnichannel development.