Tuesday, August 25th, 2020
The COVID-19 outbreak and subsequent lockdown has brought an unparalleled and devastating impact in the retail industry. As many high-street stores were forced to close their doors, they felt the impact and the pressure to go digital and open an e-Commerce store to regain their customers.
The eCommerce trend is certainly on the rise as the US experienced an increase of 126% just last year. Other significant increases were seen in the Nordic countries of Norway, Denmark, Sweden, Finland, Greenland and Iceland, where there was a growth of 166%. The rest of the European territory experienced a 115% increase. The evidence is clear that e-Commerce will continue to grow and flourish after the lockdown is removed.
When The Lockdown Is Lifted, Then What?
As the lockdown is slowly removed and brick-and mortar businesses begin opening their doors to the public again, the primary problem is how to draw these customers away from online shopping and back to their place of business. Many are considering the Click and Collect method which would be considered a “hybrid approach” to shopping in both ways. Confirming this possibility, a recent study showed that 42% of customers in the UK prefer using “Click and Collect services” to purchase their groceries and pharmacy products.
Long before the pandemic, retail stores have been battling for the attention of shoppers. As a result, retailers have sought to make retail buying more “experiential”. In fact, some shopping centres and high streets have turned to hiring entertainers to ease the “social-distancing messaging” to come across less “confrontational” when their doors finally open.
Other tactics that will be used include adding “peripheral entertainment”, personal shoppers, coffee shops, and “in-store eateries”. This is all part of the strategy to make shopping more of an experience and not another difficult chore to bear.
Department Stores Need To Step It Up
The COVID-19 outbreak and subsequent lockdown has spelt bankruptcy for some department stores and a massive drop in sales for others. A study produced by Alvarez & Marsal, 50% of UK retailers could be “wiped out” if the coronavirus continues. Sales are predicted to have declined as much as 70% since the lockdown.
Just in the UK, Debenhams has “appointed administrators” to save as many of its stores in the UK as possible. In Ireland, its 11 stores are anticipated to be closed for good. Both Oasis and Warehouse have also made the announcement that they are “heading into administration”. This means job losses for 200 of its staff and an additional 1,800 staff will be “furloughed”.
Department stores have struggled to transition into e-Commerce. As e-Commerce continues to explode, department stores continue to exist at a tremendous disadvantage. In the face of uncertain and rapidly changing times, department stores must act fast or face certain demise.
Who Will Survive?
Those companies who have continued to connect with its customers and strengthen virtual ties during the pandemic will clearly come out winning. With consistent communication, filling any gaps, and continuing to build trust and authority, these brands will certainly come on top regardless of the incertitude of our time. Department stores, high-street shops, and other brick-and-mortar retail businesses must quickly adapt so that they are not left behind.