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- These are five ways the retail industry may change following COVID-19
A few months into the Coronavirus pandemic, it’s clear the economy will be materially changed as a result. Brands need to be on top of their games now more than ever. Those that effectively pivot to meet new demands have the potential to become even stronger — while those that fail to do so may see their market shares diminish as customers turn elsewhere.
These are five ways the retail industry may change following COVID-19
Ecommerce Will Become Bigger Sooner Than Anticipated
Although ecommerce has been on the rise over the past decade, the pandemic brought it to the forefront as people not only wanted to order online for convenience but needed to. Current estimates project global ecommerce to become a $6.5 trillion industry as soon as 2023. For reference, global sales for 2020 are at about $4.2 trillion.
These aggressive growth rates show just how long a runway ecommerce has to expand into the future. Past estimates, however, are going to need some reworking now that COVID-19 has altered the state of retail. While ecommerce was already a burgeoning force in retail, it has now become a dominant powerhouse.
Online shopping was still available despite consumers not being able to visit some of their favorite retailers in person. It’s unlikely buyers will ever shift completely back to how they used to shop once they’ve started to depend more heavily on ecommerce.
New Products and Markets Will Emerge
If someone in 2019 had told you there would be a run on toilet paper next year, you probably would have laughed at them. It’s hard to say where things go next from here. Either way, retailers need to be looking ahead to predict what markets and products will be most viable going forward.
Companies can utilize advanced retail analytics to get a better idea of what’s happening now, while setting themselves to fill the demands of the future. Tools like self-service search and AI analytics allow decision-makers within retail enterprises — even those without a data background — to quickly arrive at actionable insights. Brands who are able to parse changing customer behavior, demands and feedback will be better equipped to make decisions to serve their audiences — while those that depend on more traditional forecasting will fall behind the curve.
Retailers Will Re-Evaluate Supply Chains
One systemic change we’re already seeing in the wake of COVID-19 is the re-evaluation of retailers’ supply chains. Businesses will need to figure out how to know what products they have, where and what demand will look like in near real-time — then act quickly to anticipate and minimize interruptions.
Companies will need to be able to pivot their supply chains around hotspots, changing regulatory requirements and more. Increased agility and flexibility will be paramount in this shift.
Payments and Point-of-Sale Will Move Toward Digital Wallets
Cash may still be king, but that doesn’t mean it has to be a piece of paper. There’s a list of problems with cash that aren’t new. It’s expensive to print, distribute, and maintain so much of it. Taking on a whole new level of problematic, however, is the fact physical money spreads germs. Even in-person transactions conducted via credit card have presented new risks in light of the pandemic, making people rethink how they shop and pay.
We were on the verge of transitioning to digital wallets before COVID-19. Venmo and Cash App are already used by tens of millions for peer-to-peer transactions. The need to eliminate the spread of the virus will only accelerate the adoption of these technologies.
Brands Will Shift Marketing to Reflect the Times
Many of us have already noticed a stark shift in marketing tone since the beginning of the pandemic. It’s likely, as the state of the world evolves from this, there will be further adaptations to these marketing trends — particularly the need to respond quickly and empathetically to whatever is going on in the world at the time.
COVID-19 is a generational challenge. Retailers will need to be agile and flexible to withstand this economy. Businesses that stay ahead of the changes can hopefully come out the other end stronger.