4 Ways the COVID Pandemic Changed the Retail Industry Forever

To say that there were mixed fortunes for retail during COVID is something of an understatement. The sector endured an unprecedented period of upheaval and change, with some businesses thriving while others struggled. In 2020, eCommerce made up 19% of total retail sales across global markets, a 3% increase from the previous year. While eCommerce was already a major disrupter in this sphere — and was already growing significantly — this represents an enormous leap.

In other areas, the change was markedly less positive. Brick-and-mortar retailers found their profits dwindling — dropping to zero in some instances — as social distancing guidelines bit down on societies across the world. In India, consumer confidence in physical retailers dropped to an all-time low in May 2021. Meanwhile, in the UK, PricewaterhouseCoopers warned that the full impact of COVID-19 has yet to be felt, even after 17,500 stores were forced to close during the pandemic period.

However, with physical retail surges now being reported worldwide as restrictions ease in many key markets, are we going back to a state of normality?

Well, it depends on your definition of normality. While some aspects of the industry will return to the previous status quo, it looks likely that retail will be profoundly changed after COVID, even as recovery continues. Many of these changes look likely to be permanent.

How Will Retail Change After COVID?

Retail is always changing, evolving, and growing toward new best practices and status quos. However, the unprecedented period of COVID-19 has accelerated this change. With this in mind, how can we expect the market to shift during the pandemic recovery phase and beyond?

• eCommerce continues to surge

A return to normal? Well, it seems not. While the reopening of physical stores around the world did put a dent in the profits of eCommerce providers, this seems to be a temporary blip. Figures suggest that eCommerce and online retail will continue to surge in the coming years, further developing its market share.

In 2020, while the pandemic ravaged the globe, eCommerce accounted for 18% of all retail sales worldwide. While this strong showing could be attributed to consumer anxiety and a relative lack of consumer choice during the pandemic, the long-term forecast suggests something different. It is predicted that eCommerce will reach a market share of almost 22% by 2024, demonstrating its long-term prospects.

What does this mean for retail? As you can see, physical stores will still play a major part in the market moving forward. However, eCommerce and online retail are things that businesses need to be aware of, diversifying their offerings to better meet the needs of the modern customer.

• Physical retailers scale back to avoid risk

We've already taken a look at the number of store closures that happened as a direct result of the COVID pandemic. In addition to this, we have seen how eCommerce is surging right across the world. This leaves retailers at something of a crossroads.

While physical stores continue to provide the bulk of revenue volumes for most businesses in this sector, the balance of power is shifting. The increased overheads and increased risk of a physical setup make this a worrying proposition for business. Meanwhile, the relative flexibility and protection of an eCommerce approach make this very appealing.

As we move beyond this period of COVID-19, we can expect businesses to scale back the physical side of their operations in favor of a more agile, more forward-thinking approach.

• Innovative retail technology leads the way

Retail and technology have always gone hand in hand. From point-of-sale equipment and inventory solutions that help businesses stay fully stocked as they serve their customers to analytics software and engagement platforms that assist in the management of customer relationships, tech plays a major role. But technology in retail is evolving, and it is becoming increasingly vital during the recovery from COVID.

One of the key factors behind this is anxiety. Physical retailers have seen stores in their field massacred by reduced traffic and minimized consumer activity, and this has led to a cautious approach. These retailers need to be able to maximize the potential of customers in the market, adopting new technologies to make the purchasing process easier and more straightforward. This may include deploying QR code ordering systems to streamline the in-store experience and gathering more qualitative and quantitative data from customers — which will help businesses meet the evolving needs of these consumers.

Online retailers may find themselves with a little more breathing space, but they will still experience that anxiety. Increased competition leads to a sink-or-swim environment, and business owners will need to embrace innovative retail technology if they are to secure their position in the latter category. This is likely to mean increased reliance on platforms such as engage™, which provide direct insight into the habits and views of customers in a whole host of different channels. This enables retailers to foster profound engagements with their customer base.

• The fight against counterfeiters becomes ever more fierce

Everyone has been hit hard by the COVID-19 pandemic, which means protecting profits and bottom lines has become more crucial than ever. This has made key battlegrounds even more ferocious — for example, the ongoing fight against fraudsters and their counterfeit products.

Unfortunately, opportunistic fraudsters have seen profits rise, with the United States Immigration and Customs Enforcement body making 911 seizures of counterfeit goods during Q2 of 2021 alone. As retailer profits become increasingly vulnerable in the wake of the pandemic, the industry will need to embrace technology to keep these fraudsters in check.

This is one of the main use cases we had in mind when we developed the engage™ app and platform. We wanted to help bring about a situation in which the profits of retailers are protected, the safety and well-being of users are upheld, and counterfeiters are stopped in their tracks. Manufacturers and distributors simply need to register their products on the platform via an intuitive and easy-to-use interface, creating a repository of genuine products that consumers can connect with. From the consumer end, individuals can scan the product using an app downloaded to their smartphone device. This will tell them immediately whether or not the item is genuine.

Customers do not want to use fraudulent goods. As we recover from COVID-19, it's up to businesses to empower their customers, providing them with the tools they need to reject fraudulent products. This could be one of the most profound changes in retail in the coming years.

Shoring Up the Retail Industry, Post-COVID

We are proud to say that the engage™ platform is one of the pieces of tech that is helping retailers look forward to a better future post-COVID. Reach out to our team to schedule a demo and to learn more about this solution.