State of Retail Post COVID-19
The global retail sector is fighting an uphill battle in 2020 with the setback it has received due to the COVID-19 pandemic. The retail sector earned 24.78 Trillion dollars in the year 2019 and was forecasted to reach 26.69 Trillion dollars in the year 2022. As a result of the pandemic lockdown, the retail sector is predicted to face a global loss of 2.1 Trillion in 2020 according to Forrester
Effect of COVID-19
According to the Organisation for Economic Co-operation and Development (OECD) and google trends, there has been a shift in demand for essential as well as non-essential goods, where the former gained more traction due to emergency stocking and panic buying. The latter had no chance to conduct sales except for online stores once the ban on non-essential items was lifted by the respective Government.
The following aspects of the retail sector have since changed:
- Mass merchandise segments have been operational since they directed their primary sales into essential-goods.
- Supply chain and inventory imbalance due to stock pile-up or stock-out.
- Fund flow and cash crunch for working capital due to disturbance in credit cycles.
- Change in consumer behaviour due to panic buying.
- IT and consumer durable goods
- Adverse impact on the workforce since many organizations were forced to downsize and make salary cuts.
In other words, some segments of the retail sector that have been crushed while others exponentially flourished due to an increase in their global importance, such as the essential goods retail sector.
As a result, we witnessed the events below:
- Global sales fell by 9.6%.
- 40% of the Middle-Eastern organizations are expecting a 25% fall in their profits this year, while making 40% of workforce cuts as to the global average of only 29%.
- The Canadian tech sector is expected to fall by 7% this year.
- The UK’s tech market is expected to be the weakest in 2020 & 2021, but France and Germany are expected to recover, which spells true.
- The Middle-Eastern countries except for Saudi Arabia were already experiencing a contraction before the COVID-19 crisis, but faced further fluctuations in the oil prices. This event, despite the OPEC agreement being reformed is expected to cost Middle-Eastern countries a loss of $270 Billion.
Since there are still 2 months for 2020 to end, we’re yet to see exact figures of the annual global impact of COVID-19’s path of destruction.
The Retail Sector Post COVID-19
Now that the procedures of resuming operations safely are underway, the question of whether or not the retail sector will pick up where it left off is on all the retailers’ minds. If yes, then how long will it take to make up for the enormous amounts of losses faced? Forrester predicts that it may take 4 years for the global retail industry to do so.
Countries like India and China have shown some signs of recovery, but the other countries in North America and the EU have a bumpy road ahead. KPMG has spoken about the 5 sectors the retail sector can focus on to realign themselves with the new reality:
- The capacity to predict fluctuation in demand and monetize it.
- Reviewing cash reserves and overall stability to facilitate greater liquidity.
- Moving the workforce by shifting dry department employees to help the overworked departments.
- Opening a dialogue with the customers for perspective and connection.
Accepting that the reality for retailers has changed, no matter how long COVID-19 lasts, is the first step to learning to adapt with innovative ways to boost the recovery rate. There are several important discussions in the coming days by retail industry leaders such as best practices, new ideas and supporting technology that we need to pay attention to for a successful recovery that has just started showing its green shoots.
To leverage this opportunity and recover your business safely, especially pertaining to the workforce and customers, Ziwo has the perfect solution to manage your workforce and in fact has an array of features to provide superpowers to your employees to provide greater efficiency in remote working and boost the performance of your sales team. Ziwo is a cloud-based Contact Center Solution that provides API-integrated solutions with premium support. Please check out a Recent Webinar conducted by ZIWO in collaboration with Activate Experience on the Disruption in Retail post COVID Here.
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