How COVID-19 Has Impacted The Retail Industry


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The COVID-19 pandemic rocked many industries, causing overnight pivots and adjustments for their survival. One that has seen radical change is retail—which encompasses consumer-facing businesses including stores and restaurants. From having to quickly shift to online or curbside pickup to being forced into a to-go only model or closed completely, this industry has weathered changes we will likely see in some form for the foreseeable future.

Lasting impacts we’re likely to see long term are:

1. A demand for more convenience when shopping—i.e.: curbside pickup, online ordering, delivery.
2. New consumer habits that were developed during the lockdowns—i.e.: doing most shopping online, to-go cocktails.
3. Health and safety expectations from consumers—i.e.: permanent outdoor dining, social distancing, contactless options.

The Demand For Convenience

The stay-at-home order encouraged a spike in online shopping like never before. Amazon alone has seen a growth of 62%, as of April 2021, due to their business model already existing in this format. The need for consumers to stay at home encouraged those armed with stimulus checks from the government to embark on home renovations, new hobbies, and even new wardrobes.

Stores that offer groceries, like Walmart and Target, saw a rapid increase in mobile app downloads early on in the pandemic as people opted to have them delivered. Instacart, an app that partners with grocery stores as a third-party delivery service, also saw an increase in downloads and demand. Businesses that were able to pivot quickly and offer convenience options that adhered to lockdown restrictions fared better than those that didn’t. Guru Nanda, an essential oils and accessory company, reacted to the crisis by manufacturing essential oil-based hand sanitizer and masks. Black Travel Box, slated to launch in 2020 addressing the personal care needs of Black women travelers, decided to make their flagship product a COVID-19 relief kit.

For restaurants, COVID-19 had a serious impact. With social distancing measures and the caution of the public, many consumers decided to dine out less. Those that offered take-out or curbside pickup were able to supplement some of those losses. In 2019 the market size of the global online food delivery sector was 107.44 billion. In total, digital restaurant delivery increased by 123% in the United States in 2020.

From home goods to groceries to restaurant meals, it’s clear the option to have as many items as possible delivered directly to your door is likely here to stay. Amazon alone has increased its profits by 200% since the onset and with the promise of prompt delivery, especially during the holidays, they’re in a better position than any of their competitors.

A Season Of New Habits

During the lockdown, many consumers adopted new habits that might not be easily shaken. Since online shopping soared and many saw the convenience, in-person retail may need to make bold changes to encourage foot traffic again. With the demand and expectation high, businesses will need to upscale their online shopping portals to ensure the experience is seamless and simple. Another thing to keep in mind is that the virtual experience isn’t expected to be like the in-person one. Utilizing capabilities such as real-time inventory management, AI-powered search, and personalization can create a new shopping experience for consumers.

For restaurants, one of the biggest perks available were cocktails to-go—which were allowed in some fashion by 39 states. Of these 39, 14 have extended how long they’ll be available, and 17 jurisdictions have made them permanent. This is a big win as it could continue to boost off-premises sales by 5-10% for a typical restaurant that is employing this program.

Keeping certain adjustments and pivots that were made by businesses out of desperation to survive seems prudent in the long-term for both the consumer and the business’s benefit. One of the biggest successes for retail and restaurants was the ‘order online and in-store/curbside pickup’ model and it’s clear it is here to stay. It’s a great way to flatten the shipping curve for those who need products ASAP and helps shorten the gap between ordering and receiving the desired product.

Health And Safety Expectations

In the wake of new COVID-19 variants (delta and omicron), continuing to adhere to safety precautions such as wearing masks, washing hands frequently, socially distancing, and disinfecting frequently touched surfaces is the most obvious response retail businesses can have. This helps create a safe environment not only for customers but also for the employees.

For restaurants, an expansion or creation of outdoor dining on sidewalks, in parking lots, or on streets was executed by 90% of operators. In jurisdictions that allow it, many plan to keep these measures in place in a post-pandemic world. As variants do emerge, establishments having to require proof of vaccination for indoor diners are likely to benefit from keeping these outdoor options. A whopping 84% of adults said they are in favor of allowing restaurants to permanently employ this setup. This measure of precaution alone could help prevent devastating losses if another shutdown of indoor dining does occur.

The Bottom Line

It is vital for those in the retail sector to bear in mind that the shifts that took place due to the pandemic were more than likely on their way eventually. Assuming we can go back to “the way things were” is a hopeless notion. Businesses that see these changes as an opportunity rather than a disadvantage are likely to be the ones that come out on top.

Amit Patel
As the Founder and Managing Director of the Mythos Group, Amit has led a variety of global business transformations for Fortune 100, Fortune 500 and startup companies. He formerly spent time in managerial positions at Scient, Accenture, PwC, PeopleSoft and more.


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