How the Coronavirus Impacts Retail

Brick-and-mortar stores are closing across the globe as the coronavirus disrupts the economic cycle and creates uncertainty for retail businesses. The last time the United States temporarily ground businesses to a halt was after the 9/11 attacks. Fear and uncertainty gripped the country, but daily life resumed after a short time. In 2008 and 2009, the Great Recession slowed economic growth, although the economy continued moving forward. 

Consumers Change the Economic Landscape 

It took about a week for American retail to slow nearly to a stop. In the earlier-mentioned examples, consumers held off on non-discretionary purchases for a time—and led us out of recession by spending their way to the nation’s economic recovery. But this time, it’s different. The global economy was doing very well before the coronavirus outbreak created an economic crisis.

We agree that shutting down businesses and activities is the right thing to do in order to slow the spread of the virus. But the economy is rattled, as tens of thousands of retailers took the extreme measure of temporarily shutting their doors. Most of these companies pledged to remain closed for a few weeks. But at this point, it’s difficult to predict when it might be safe to resume “business as usual.”

The Shift to Online Shopping

The United States has more retail selling space than any other country, and with brick-and-mortar operations closed down, many retailers have been able to flex their operations from physical stores to online. However, others have stopped operations in their distribution centers and stopped even their eCommerce business.

But how will consumers react once the virus is contained, and we’re collectively given the all-clear from lockdowns, quarantine, and self-isolation? Shopping in America might never be the same as before the COVID-19 pandemic. We will have become accustomed to social distancing and are likely to prefer avoiding crowds.

It’s possible that physical store closures won’t end as soon as initially hoped. Since digital sales are less profitable, eCommerce isn’t likely to make up the revenue shortfall—especially considering worldwide supply chain issues. Retailers are struggling to sustain their supply chain through significant challenges in retaining their workforce. Although factories in China are coming back online, production and fulfillment remain impacted by issues that affect cargo movement. But even after all the manufacturing, shipping, and other cogs in the supply chain resume operations, it remains to be seen whether there will be orders to fill.

Consumers may see less variety on store shelves; manufacturers will be focused on producing best-selling items. We’ve already seen this happening in drug, grocery, and mass retail, as consumers are stocking up—and even hoarding—household essentials like eggs, toilet paper, and cleaning supplies. 

Conclusion

We won’t know the long-term impact of the coronavirus pandemic on retail for some time, and of course, we advise that you follow expert guidelines to stay safe and healthy. Millions of Americans are ready to get back to work as quickly as possible, and we are all looking forward to helping propel the economy forward!

Interested in learning more about how COVID-19 is Affecting the Wreaking Havoc on CE Supply Chains Industry? Check out this article from TWICE: COVID-19 Comes Calling for CE Suppliers