In an attempt to slow the spread of COVID-19, many countries, including the retail industry itself, have entered a state of lockdown in recent months. It is not an overstatement to say that the retail industry is bearing the brunt of this pandemic-driven global recession. With temporary closures to schools, restaurants, non-necessity retail stores, bans on public gatherings and implementation of work-from-home arrangement, the impact on the retail sector is heterogeneous along with different unprecedented challenges.
Due to lockdowns and social distancing measures, there is no doubt that huge damage has been done when stores are closed for months at a time. It is reported that the global retail growth rate in 2020 is recorded as -5.7%. Non-essential retail activities are forced to shut down until further notice. Even essential retail businesses which are allowed to open, often operate in difficult conditions, dealing with labour supply shortage, disruptions in supply chains and sudden spikes in demand for certain products.
Otherwise healthy retailers are hanging on by a thread, not to mention small businesses. Every business is dealing with increasing debt burden, slowing asset turnover, compressing margins and most importantly, dramatically dropping in sales revenue. Traditional brick-and-mortar retailers are in particular vulnerable situation.
Not only does the retailers have to provide employees with basic welfare like usual, they have to make additional investment to ensure the safety of employees during the pandemic period. To comply with the authorities’ regulations and prevent further shut down if employees are found being infected, the retailers have to provide staff with personal protective equipment and extra medical support.
As the business is seeing loss of staff coming from furloughs and layoffs, they have to find ways to boost morale and shoot down rumours amid pandemic upheaval. As happy employee creates happy customer, retailers should manage a new normal for how remaining staff conducts business and interact with customers. Investment in staff training for altering the business into an e-commerce form is another indispensable and pressing job.
New Operating Model
Online shopping has thrived while physical stores have been closed. The majority of online spending was mainly contributed by the young generation before the pandemic. But then COVID-19 arrived, consumers of all ages have switched to the digital solution and have a high intention to continue using e-commerce platform after the pandemic. It leaves retailers no choice but to move into the world of e-commerce.
It is important to adjust the design and choose the appropriate choice of words for webpages or apps as they were used to focus on younger customers. With the world closes borders and restricts travel, creating a multilingual webpage is the crucial step for the retailers to reach out to their international customers. Localising the e-commerce platform by a group of experience linguists, Elite Asia help businesses to expand to foreign markets and make more profit.
The long-term health, social and economic impacts of the COVID-19 remain unknown and the global response to the virus has fundamentally changed the situation for retailers. To overcome such crisis, retailers have to bring up best practices, innovative responses and new ideas.
With technology constantly evolving, here are some of the digital trends that are changing the way the finance industry operates.