The burgeoning retail sector’s progress got halted by the outbreak of the global pandemic in 2019. Growing through 2021 and beyond, retail companies need to transform and adapt to the changing outlook of the postpandemic retail world. Diversity, inclusion, workforce health, and safety would be at the top of the priority list for retail companies from now onwards. The article discusses varying contours of a retail rebound in the post-pandemic world, focusing on the US fortune 500 companies as case studies.
Recently, in June, the US retail prices have witnessed an exponential growth regarding the demand for goods. The statistics below show that sales increased by 18% as compared to June last year. Retail sales chiefly consist of goods components, healthcare, education, and hotel accommodation spending.
Consumers are spending at restaurants, bars, and on household necessities. Also, in May this year, the sales of clothing stores in the US have increased remarkably by 2.6%. On the other hand, sales at furniture stores have fallen by 3.6% in the same month.
Preparing for a post-pandemic retail recovery
Analyzing surveys conducted in the retail sectors, experts believe that a delayed rebound once the retail companies start to reopen would be inevitable. Apparent changes in-store operating model, a shift in priorities, and growing customer reliance on eCommerce indicate that normalcy in the retail sector would take time to return.
A new survey of 98 US-based retail executives tells a lot about the retail rebound in the post-pandemic world. If one goes by survey findings, nearly 80% of the executive have closed at least 1 of their locations during the pandemic. Hence most retail executives expect a recovery of store traffic to take time, at least several months. Ecommerce, on the other end, has emerged as a strong replacement: it has shown a 6-13 points increase compared to pre-pandemic standings.
Precautionary measures and fundamental changes to operational model: Retail rebound planning
Executives haven’t set criteria for reopening stores as of yet. However, they are incorporating a variety of trackers as a signal into their models. Competitor’s analysis, store performance, and work staff availability remain top of considerations for almost all firms. As a short-term responsive action, executives are looking forward to following SOPs, prioritizing workers’ health over profits, and managing working hours. Verily the pandemic has put the retailer on the back foot and has forced them to reassess their operational models.
Us fortune 500: A gold standard for American business 1. Latest entries and exists in the US fortune 500 companies list:
In 2020, 39 companies entered the elite list of fortune 500 companies. However, there are a considerable number of departures from the list in 2020. The travel industry appeared as one of the most vulnerable industries, and the most departures from the fortune 500 lists belong to the travel industry. For instance, the revenue of Hilton worldwide holdings dropped by a massive 57%. Similar is the case for Las Vegas Sands and Wynn Resorts.
2. Alphabet Beats Analysts’ Estimates on Surge of Retail Ads
In the past three months; google has witnessed massive sales growth; youtube alone has generated $7 billion in profit. Similarly, the alphabet.inc, Google’s parent, has performed exceptionally in revenue generated through ads from the retail marketer. As of June 30, the revenue collected through retail marketing is a whopping $51 billion (Mountain View report). Digital ads slowed down in the last year due to the pandemic, but google has rebounded remarkably. This year scratch and other related businesses alone have generated $35.8 billion. Sunder pica, coo pf google, has also affirmed a surge in Google’s revenue as he says that we saw a rising tide of online consumers and business activities this year.
3. Return of shoppers at Macy’s
In the first quarter of the ongoing year, mace’s shoppers have returned in droves and bought suites, suitcases, and home furnishing items. In May, Macy’s reported a staggering growth of 62.5% in sales during the first quarter (including eCommerce). Macy’s chief has labeled this achievement as an indication that consumers are more than ready to return normal. A full-year forecast report may have projected that its sales would reach $22 billion by the end of 2021.
HOW MINISO has capitalized on the pandemic rebound
MINISO has been opening retail stores almost every day during the past year. And it is focusing more on the east coast. From May 2020 to May 20021, MINISO has successfully opened 364 new stores. The expansion is attributed to the company’s low-cost retail strategy.
According to MINISO’S official data, the company has seen a staggering growth of 73% in sales in the US during the first quarter of 2021. Huang, MINISO’s vice president, predicts that as the economy and retail sector seem to open, consumers are sitting on the fence, having a pile of savings. So the company will make sure to use the full potential of a revitalized economy in use. Shifting the headquarter from Los angles to New York is one of the best moves by MINISO, experts believe.
As things are returning to normal, retailers are facing challenges: A case study of Walmart.
Similar to Macy’s, Walmart is also witnessing a return of customers at its stores. Meanwhile, a return to stores has been a highlight in recent earning reports by most retailers. This trend is a good sign for retailers as people tend to buy more at stores than online. A market research firm NDP suggests 25% impulse buying at stores relative to 16% online.
The aforementioned reason hints that retailers want everyone to be at stores. However, stores are struggling to keep customers coming back in the post-pandemic era. Moreover, they are facing cutthroat competition from online sellers and discounters. Furthermore, experts believe that postpandemic retail customers will be more aware hence more demanding. They know more about services and quality because of extensive online experience.
In the first week of May, customer count at various stores had surged past 43.2%. Nevertheless, if one compares it with the numbers in 2019, it is still 5.6% lower. Comparatively, the discounters’ market share stands steadily at 21%.
Currently, online shopping stands at 21% of the overall sales; by 2023, it may go past 27%.
Still, physical shopping is far from being normal. For instance, cosmetic and beauty stores are not permitting customers to try to make up because of COVID-induced restrictions. However, retail executives are optimistic that by the end of this year, the thing would mainly like to revert to the post-pandemic scenario.
Walmart store in Arkansas says that it has noticed the spike in transactions for the first time in the year. Retail executives are using the strategy of opening new merchandise to attract more customers and make retail shopping more convenient. For example, kohl’s is planning to open Sephora beauty shops in 200 various locations in the coming months.
Will 2021 prove fruitful for the retail sector: strategizing retail rebound?
Coupling with changes in customer preferences, the pandemic has helped eCommerce emerge as the new order for the retail world. The pandemic has forced retailers to rethink and strategize the value of stores again. The retail sector is going through tough times. Therefore, retailers are resorting to new approaches that will suit the post-pandemic. One of the noticeable changes is organizational redesign: a bottom-up approach. The traditional top-down approach primarily centered on cutting costs is proving ineffective.
Therefore, many retail executives are looking forward to different future-of-work. An evolutionary process has taken the shape of a forced revolutionary process. Suddenly, companies are looking forward to focusing more on employees centered rather than just taking into account the costbenefit approach. Hence for all, big or small retail companies, this is a learnon-the-go process. Brands are reimaging the product portfolios. Those who have previously neglected the potential of online shopping are creating new digital experiences. All these and many new approaches are adopted to engage customers and bolster growth.
Planning a retail rebound after the pandemic
To emerge victorious out of the crisis, retail companies need to formulate plans taking the following crucial actions.
Since the beginning of the pandemic, digital media has proven a bridge between customers and brands. Video conferences have connected the staff and the executives. On the other hand, eCommerce has set new standards.
Digital actions for the retail rebound
Optimizing online presence and revisiting customer preference would be necessary as all the data and approaches based on pre-pandemic indicators are obsolete now. Additionally, speeding up delivery and pick-up services would add convenience and boost sales. Incorporating AI and virtual reality would mark the beginning of a new era in terms of retail rebound.
Retail rebound and Supply chain management: a vital correlation
Meanwhile, careful supply chain management is critical to bring the retail sector back to normal. Assessing and managing potential delays for suppliers and customers by creating efficient cross-functional teams would be a proactive supply chain action.
Marketing actions to ensure a retail rebound
In the pandemic, companies must avoid aggressive promotion and thrive on being more honest and genuine. Marketing strategies should be framed around the new lifestyles of customers. A lot has been talked about: about the pandemic and often in negative connotations. Nevertheless, the lockdown and the pandemic offer brands an opportunity to make good changes and start from zero with a revolutionized approach.
Product portfolio action plan
Don’t hesitate to adapt. Check your product range, rethink the rhythm of your collection. To adopt critical strategic changes, keep in view your competitors’ product range.
China is leading the way in its fight against the virus. Chinese footprint may serve as a footprint for retail executives across the globe to rejuvenate the retail sector.
Therefore, Customers, retail executives, supply chain managers, and leaders must conceive and plan for the future accordingly.
The pandemic has irrevocably altered the engagement, locally globally, among traders, and most importantly, customers. Nobody knows what the future holds for the retail sector, but everyone is sure that the future will be different from the pre-pandemic world.