This report will discuss the wide-ranging impact of COVID 19 pandemic on retail industry, which has witnessed a massive transformation during this outbreak. 2019 COVID crisis – From the very start, a completely unbeknownst shift in both consumer behavior and retail management began an entire cascade of changes throughout international trade market. Connections between trade and all aspects related to customers’ buying behavior have changed from fast growth in internet purchases up to preventions in logistics, changes go far beyond the ways consumers spend their money.
The aim of this report is to provide a general perspective on various changes that have taken place in sectors within retail and discuss how companies under these categories adjusted themselves based on the requirements posed by pandemic as well discussions regarding what innovations were notable during such epochs. This report will also therefore, try to give an idea on how resilient and adaptable the entire retail sector has been in facing one of most monumental global challenges every faced.
Literature Review
The Impact Pandemic on Supply Chain and Inventory Management
The global supply chains continue to be subjected to significant challenges as the pandemic continues. 20Last year, we have witnessed lockdown across the country that delayed or even halted movement of raw materials and finished products thus disrupting manufacturing processes all around the nation. The pandemic has not really created new challenges for supply chains, but unobserved vulnerabilities such as staff shortages related shutdown are revealed (Gallagher, 2022). fundamentally the pandemic has intensified and escalated issues in supply chain that were already there.
Almost 11% highlighted positive outcomes in the pandemic – increased customer’s demand 71%, new product introduction, which was mentioned by 57%. Most importantly, most of these successful companies would be from the life sciences community and probably thriving for their concern in an essential industry (Rozhkov et al., 2022). The pandemic also resulted in a significant number of life sciences companies ramping up their work on producing essential new products like COVID-19 tests and vaccines. Other industries, especially those manufacturing consumer goods things found it hard to stock during the early stages of this pandemic. This was evident since demand for basic products such as toilet paper, canned foods among others were high.
Investigate the Financial and Operational Challenges for Retailers
Main attention is given as to how inflation stressed retailers. Retailers end up paying more for goods and operational costs due to inflation. 2023 re-shelving and inventory management retailers have for their part the challenge of balancing these increased costs with prices on finished goods (Sharma et al., 2021). They should keep prices appropriate to customers while ensuring enough cash flow for their organizations.
Although the obstacle remains that inflation is around 7.1% year-over-year according to Consumer Price Index CPI , there’s a silver lining – for five straight months as of November, it has slowed down . This indicates a possible reduction in cost pressures for retailers; however, it doesn’t nullify the effects of previous inflation spikes.
“It is a statement by Jack Kleinhenz, the Chief Economist of National Retail Federation that provides an air to uncertainty in economics. The direction of future inflation appears promising yet hazy in nature, which will require retailers to be flexible and reactive to shifting economic realities. The analysis differentiates between goods and services as far as inflation is concerned (Akram et al., 2021). The increase in the price of goods is showing some signs of easing, but it remains high for labour-intensive services sector rent, and recreation. This means that inflation will have different effects on the various retail sectors. Goods retailers might receive a breather while service-oriented sectors could keep on facing challenges. Retailers have to delve into these economic uncertainties using strategic pricing, inventory management, and the efficiency of their operations. Thus, they would have to look for cost saving avenues or depict their products in a different way from the one used previously perhaps due to stiff economic ambitions of maintaining profitability during hard times.
It is evident that the retail sector has been going through tough economic times as indicated by a recent survey where 92 % of those in this line of business did admit concern over their businesses ability to survive for another six months. This fear is largely inflation and recession driven. 47% of the respondents identified inflation as a paramount concern, which they said will increase the prices being charged for goodsandservices in turn against affecting procurement and operational expenses. 36% of retailers are worried about the prospect of economic recession, which may further result in a decline within consumer spending. 35% of the organizations are facing challenges due to supply chain delays that keep on hampering operations and inventory control (Kumar et al., 2020). Consumer demand generally is also seen as a potential victim of inflation by the same percentage of retailers and this can have serious implications for sales, especially on non-essential goods. Other significant issues are related to shipping and returns delay in operations (31%), which means the impact on customer satisfaction and logistic costs, as well poor capacity especially whereby it is difficult for entities generating cash flow or even being financially viable during that time. Apart from this, a shortage in labor that is of concern to 26% of the retailers has also made it difficult for them to maintain quality service and operational efficiency.
Identify Innovations and Emerging Trends in the Retail Sector
It is evident that the retail sector has been going through tough economic times as indicated by a recent survey where 92 % of those in this line of business did admit concern over their businesses ability to endure for another six months. This fear is largely inflation and recession driven. 47% of the respondents recognised inflation as a paramount concern, which they said will increase the prices being charged for goodsandservices in turn against concerning procurement and operational expenses. 36% of retailers are worried about the possibility of economic recession, which may further result in a decline within consumer spending. 35% of the organizations are facing challenges due to supply chain delays that keep on hampering operations and inventory control (Galanakis, 2021). Customer demand generally is also seen as a possible victim of inflation by the same percentage of retailers and this can have serious implications for sales, especially on non-essential goods. Other significant issues are connected to shipping and returns delay in operations (31%), which means the impact on customer satisfaction and logistic costs, as well poor capacity especially whereby it is difficult for entities generating cash flow or even being financially viable during that time. Apart from this, a shortage in labor that is of concern to 26% of the retailers has also made it difficult for them to possess quality service and functional efficiency.
Worth mentioning, ever since the onset of the pandemic online sales in the U.S have skyrocketed by 49% as compared to last year. Consumers have largely moved from making purchases in physical stores to shopping online at home. This trend is likely to continue beyond the pandemic as many customers are now appreciating convenience and health advantages in online shopping (Mostaghel et al., 2022). A World Economic Forum article states that over 60 per cent plunge is predicted for the department stores this year, while e-commerce displays nearly a growth of Major retail giants like Walmart, Target, CVS and Kohl’s have effectively adjusted to this metamorphosis by optimizing their omnichannel fulfillment strategies. Other companies are rapidly enhancing their e-commerce approaches as an immediate reaction to this evolving shopping method.
According to Statista’s pre-COVID reporting as cited by Coresight Research, the AR/VR market is projected to amount jointly with worldwide sales of 18.If you are interested in more information on this topic please visit The Information Daily. This growth is due to the fact that customers utilize ARVR technologies more and more for a range of shopping activities like virtual fits, browsing around cyberspace mall, product visualization along with detailed information on products (Malenkov et al., 2021). These technologies provide consumers with a more interactive informative way of engaging in products before purchase. The sector is likely to get more attention and investment in the future.
GlobalLogic, in collaboration with several leading companies in the retail sector, is actively involved in designing and developing innovative products and platforms. The company has developed a suite of well-structured accelerators, supported by a comprehensive repository that embodies over 5000 person-years of combined industry and technological expertise in Retail/Consumer Packaged Goods (CPG) (Pilawa et al., 2022). Leveraging this extensive industry knowledge, GlobalLogic anticipates the following key themes to be crucial for retailers in accelerating their business in the post-COVID era.
The current consumer trend of increased screen time is being leveraged by companies to boost sales. Social media platforms are increasingly facilitating sales, and video platforms are evolving into shoppable mediums. Google has introduced Shoploop, a platform where creators can upload 90-second shoppable videos. Similarly, YouTube has started including clickable product images beneath videos, linking directly to the product's website (Jiang and Stylos, 2021). This approach is in line with upcoming features on Facebook and Instagram, where live videos will soon include related product displays at the bottom. Facebook is also enhancing its Shops feature to support retailers in establishing online stores during the pandemic, offering a comprehensive platform for shopping, customer service interactions, payments, and purchase tracking. Retailers will have the option to integrate their Customer Relationship Management (CRM) systems with this feature.
Theoretical overview
In analyzing the retail industry’s reaction to COVID-19 from a theoretical perspective, several academic and conceptual frameworks are essential for understanding how this industry has been evolving over time. Adaptation Theory plays a key role in explaining why retailers changed their strategies and operations due to an unanticipated market turnaround because of the pandemic. This ranges from a fast shift to e-commerce and digital technologies integration. TAM offers insights into how new technologies were adopted both by consumers and businesses, looking at ease of use factors as well as usefulness; this is particularly pertinent with the adoption of online shopping systems and contactless payment mechanisms.
Disruption Theory serves as a platform to see the pandemic not only as an enabler speeding up technological advancement but also changing conventional retail models (Kivimaa et al., 2021). The Resource-Based View (RBV) is very important for the analysis of how retailers used their strategic resources, such as digital infrastructure and supply chain networks to stay competitive. Stakeholder Theory is providing emphasis about taking into account the effects and reactions of different stakeholders including but not limited to customers, employees, and suppliers (Gerhart and Feng, 2021). Change Management Theory explores the approaches that retailers have adopted in order to cope with a major transition towards online sales, remote work and adaptation to emerging consumer trends. Consumer Behavior Theory can help understand the changes in patterns of shopping and preferences during the pandemic, whereas Crisis Management Theory considers a more extensive approach of businesses through this turbulent period.
Analysis
Evaluation of issues
Official data on retail sales in Great Britain goes to show the effects of the COVID-19 pandemic. 2020 recorded a 1.9% year-over-year decrease in volume of total retail sales versus in There is an apparent trend of occurrence, marked by the greatest downturn since running records commenced have indicated thus far. This slowdown has had a particularly severe impact on non-essential retail sectors (Panzone, Larcom and She, 2021). The diverse effects on the retail sector are like a mixture of voluntary and compelled reactions by consumers, as well as transformations in what kinds of goods buy at different times. For instance, there was a significant decline in fuel costs associated with the shift towards remote work and other travel limitations that reduced demand for fuel (Allas, Canal and Hunt, 2020). 34% of total retail spending in May 2020 became online, which was more than twice the amount before when it stood at It is evident that consumers have been turning to e-commerce due to COVID -19 restrictions. This percentage has slightly gone down since physical stores reopened, but it is still higher than the pre-pandemic times.
The impact of the COVID-19 crisis on the retail sector varies widely, influenced by three key factors. Firstly, the extent to which individual retail businesses are affected by social distancing measures hinges on their classification as essential or non-essential (Nicola et al., 2020). While most non-essential retail has faced closures, essential retail operations have had to navigate challenges such as labor shortages, supply chain disruptions, altered working conditions, and in some cases, surges in demand for certain products (Desai, Studente and Garivaldis, 2022). For instance, in the United States, clothing retailer sales plummeted by 89.3% in April 2020 compared to the previous year, but grocery store sales rose by 13.2%, as per the Census Bureau. Similarly, in the EU, non-food product sales dropped by 23.8% in April 2020 year-on-year, while food, beverages, and tobacco sales increased by 1.2%, according to Eurostat. Internet search data also shows diverging trends for essential and non-essential retail items in most OECD countries, especially those hardest hit by the pandemic.
On the other hand, lockdowns and social distancing measures have disproportionately impacted retailers with physical storefronts compared to online retailers, potentially hastening the shift from in-person to online shopping (Sayyida et al., 2021). For example, in France, Nielsen observed a rise in e-commerce's market share to almost 10% of total consumer goods sales during lockdown, up from less than 6% in 2019. In the UK, the Office for National Statistics noted that online retail spending increased from 19.1% in April 2019 to 30.7% in April 2020, a record high.
In the UK's food and non-food retail sectors, the need for rapid adaptation has led to three distinct trends. First, the heightened difficulties and costs associated with physical shopping due to lockdown measures, such as the necessity for vulnerable groups like the elderly to stay home, sparked increased interest in online shopping (Whalley and Curwen, 2023). However, many retailers struggled to meet this surge in demand, resulting in the implementation of customer restrictions and the creation of priority lists. Furthermore, the sight of long lines outside supermarkets and in-store limitations on purchase quantities to prevent stock shortages prompted some shoppers to seek alternatives. This led to a rise in direct purchases from wholesalers, cafes, bars, and even farms, often through online platforms.
After the outbreak of COVID-19, retail sector sailed through a sea of technological challenges as it adapted to an ever-evolving business environment. Important among these was the need to expand e-commerce platforms in order to handle rising internet traffic, which is surging primarily due to consumer dependence on digital shopping (Shahbaz et al., 2020). Another major challenge was supply chain disruptions that needed smart tools to monitor and adjust for the ever-changing inventory requirements. Cyberssecurity became a significant issue in the process as increased online activity created an urgent need for better protection of customer data and payment processing (Stanca, Dabija and Câmpian, 2023). Retailers also struggled with the addition of high-tech payment systems that could accommodate the boom in digital transactions and contactless payments. Customer service technology had to adapt quickly to the number of inquiries, which sped up the deployment of AI and automated systems. Besides that, with the innovative technologies such as ARVR for virtual experiences and contactless shopping, the technological strain was further aggravated. Additionally, the retailers had to improve their data analytics abilities in an effort to be able to understand changing consumer behaviors better. On that account, the change to remote working for staff other than those in stores necessitated a powerful digital setup, and delivering an integrated omnichannel experience became paramount.
Conclusion
In conclusion, there is little doubt that the COVID-19 pandemic has fundamentally changed the nature of retail with a broad range of challenges and opportunities for innovation. Pandemics give a push to this activity toward e-commerce and digital technologies, so retailers had only the possibility of quickly changing themselves in accordance with the new customer behavior and demands of market. This transformation emphasizes the importance of technological adaptability, supply chain robustness and versatility to adjusted consumer attitudes.
It is evident that the impact of the pandemic in various areas of retail was very different; services considered to be essential has increased so much, while non-core sectors went through all kinds of troubles. Some of the new technologies that became imperative strategies towards engaging customers as well business continuity included ARVRtouchless payments and advanced ecommerce platforms for retailers. Retailers also struggled with the ability or possibility to manage disruptions in the supply chain, risks associated with cybersecurity and safe shopping experiences both at physical outlets as well online. The company understood that having robust emergency management policies and the capacity to change business practices after an external impact is critical.
Recommendation
As retailers step into the post-COVID world, it is important for them to take strategic actions that would enable not only compete with peers but also be able to stand strong even in difficult times. Three key recommendations are especially critical. First of all, enhancing digital transformation is important. Retailers should focus on delivering robust e-commerce platforms that are scalable, secure and usability friendly (Sayyida et al., 2021). Using technologies like AI for tailored shopping experiences and effective inventory management can tremendously increase the levels of consumer satisfaction, as well improve efficiencies in managing business activities. Secondly, it will be required to develop an omnichannel strategy. Online and offline sales channels will be integrated in such a way, that customer interactions evolve very comfortable thereby increasing the level of their purchases and building loyalty among them. Branding, pricing and customer service should all be effective across every channel. Furthermore, it should focus on supply chain resiliency.
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