Hit enter to search or ESC to close

Get in touch.

Whether it's for inquiries into our services and solutions, requests for demos, questions about opportunities, or anything else, please fill out this form and we will be in touch!

Let's Talk

Contact us today, to check if you’re tracking the impact of this pandemic on your business accurately, and to make your business strategy future proof. 

COVID-19 vs. Retail: How Has the Industry Shifted?

Like every other business industry, the retail sector has been drastically impacted by the ongoing coronavirus pandemic.

In response to rapidly changing uncertainties surrounding COVID-19 and government guidelines, retailers are bracing themselves for near-term and long-term adverse effects along with the anticipated permanent changes to the business. Retailers are adjusting everything from their business models, to shopping hours, to even, in extreme cases, closing their retail outlets temporarily to reduce the spread of the virus.

As sales of essential and medical goods rise and sales of non-essential items such as luggage and briefcases plummet, retailers are looking closely at all major parts of the business and the strategies that govern them. To respond to the massive behavioural shift across the customer base, retailers are also looking at their omnichannel strategy to retain their loyal consumer base and/or helping vulnerable parts of society with essential goods to enhance their brand value and image.

At eClerx, our goal is to take a look at the impact of COVID-19 pandemic induced lockdown and the response from the industry and try to paint a picture of what the future might look like as we begin to come out of the lockdown.


The major fallouts of this global pandemic are travel restrictions and lockdowns. This has led to the disruption of international supply chains, suspension of business operations, and a significant decline in revenues.

According to recent data from Dun and Bradstreet, 51,000 companies have Tier 1 suppliers, and an additional 5 million companies have Tier 2 suppliers from impacted regions of China. Due to these supplier disruptions, coupled with lockdown policies, retailers are facing inventory depletion as consumers stock-up to avoid trips out of their homes.

In addition to supply chain disruptions, retailers are also struggling to keep up with growing online orders, leading to some retailers, such as UK-based Next, temporarily closing their online stores.

On the other hand, another major UK retailer, Waitrose, has accelerated a 5-month digitisation business plan and achieved its goals within just four weeks. They have added more Click and Collect stores along with a new delivery depot and an additional fleet of delivery vans to cater to a 50% increase in online orders. As evidenced by this, the current scenario is presenting a golden opportunity for retailers to ramp-up their digital operations and improve last-mile delivery within their geography. This will not only help businesses stay afloat, but also gain brand value to leverage when the scenario improves.


Supply chain disruptions are just one part of the retail puzzle. Another casualty of this virus-hit economy is demand, as across all major economies, workforces are being forced to stay at home. However, though non-essential item retailers have been forced to shut their shops, grocers and supermarkets continue to experience superlative demand for essential items.

Retail sectors, such as clothing and luxury goods, which generally sell high margin products, have been impacted by closed shops. This has led to huge financial losses for fashion retailers that will result in a significant recovery period. One of our clients, a major UK-based retailer, had to close its non-essential divisions and has seen a decline in revenues to the tune of 70-80%.

However, there are a few sectors like personal care in which products such as vitamins and pain relief medicines, as well as stock-able items such as frozen food items, drinks, water, toilet paper, and other personal hygiene products, have seen a huge surge in demand.

This sudden change in consumer demand for certain categories may reverse when lockdowns are eased across geographies, though. In the short-term, retailers will experience a huge surge in demand for non-essential items, such as clothes and beauty products. This will give retailers a chance to clear the stock that they may have piled-up due to store closures. However, they may need to incentivize customers to walk out into their stores as most of their competitors will begin to run money-off or loyalty offers as soon as they are allowed to open. In the medium to long-term, consumer demands will depend on the responses of various governments to future peaks in virus-related cases. But in any case, consumers will be reluctant to go out and maintain social distancing when they do for a long time, thus fewer high street shopping trips. To mitigate the impact of the lockdown in the short-medium term, Retailers should increase their dedicated shelf space/product share in these categories to capitalize on the growing demand. Retailers should also try to redistribute their budgets and increase the product share in the positively impacted categories to capitalise on the growing demand (viz. Household cleaning and DIY, Gardening, and Home Improvements).


In response to the constantly evolving guidelines from governments across the globe, consumer behaviuor is also undergoing constant evolution. As consumers adapt to changing circumstances, the experience that retailers provide must also adapt to the evolving needs in the market.

And yet, other retailers are struggling to remain relevant. These firms must adopt new, digital methods of collecting market share and brand visibility.

To cope with the crowded digital market space, a noticeable upsurge in brands are focusing on social media for marketing and are increasingly liaising with influencers to increase brand exposure and association as the market sees a significant uptick in the dwell time on such platforms.

As for the in-store experience, brands are increasingly making it worthwhile for customers to step inside a store by making the physical experience safer through social distancing measures and a reduction in the usage of contact payments and loyalty cards. For example, Tesco, M&S, and Superdrug have all stopped using physical loyalty cards and are actively encouraging contactless payments. Supermarkets have also installed physical barriers and distancing markers both inside and outside their stores.


In the medium-term, as lockdown guidelines begin to lift or relax, we expect the general mood in the market to be celebratory, though concerns around social distancing will persist. Upon lockdown retraction, several sectors will likely see an immediate boon. For example, various brands within the food meal solutions and at-home celebration markets will experience an increase in activity. However, others, such as the fitness market, can be expected to plateau or trend downwards as many people will already have equipment and fitness solutions at home. To grow, fashion retail might have to pivot more to comfort and in-home categories.

As we come to terms with the new normal, the economic impact of COVID is expected to elicit recessionary consumer behaviuor. We may see recessionary market dynamics (as during 2008-2012), as when incomes are squeezed, market spend will become increasingly more value-led. Customers can be expected to buy into more cost-effective products, change retailers, and buy heavily into promotions. We expect to see a significant shift to online consumption with older shoppers (as noted in China recently), which presents a huge opportunity for brands as their online market share increases. There will be a continued shift towards consumers favouring local businesses, and this will put a lot of stress on most of the retail giants as the competition from local wholesalers seeking to remain in business increases. However, there is an opportunity for big retailers to collaborate with local businesses and create new supply chains to stabilise operations and overcome this hurdle.

Due to COVID, the gradual shifts that were happening over time have accelerated and resulted in more immediate behaviuor changes. With all of us forced to stay at home and social distance, there has been an unprecedented adoption of technologies and digitization of products and services across the board. We will navigate through a new normal of extended travel restrictions, social distancing, economic crisis, and damaged trust in the hygiene of people and products. These shifts in consumer behaviuor will give birth to new customer segments, which businesses will need to understand and cater to. This will be a unique opportunity for brands to innovate and create new products and services to meet the evolving needs these new consumer segments bring. Brands will also have to make their marketing budgets more dynamic as there will be increasingly mounting pressure to be more targeted and personalized as physical presence becomes a luxury in the future. However, it can be expected that the online retail platform will be able to provide a better/similar shopping experience to current in-store offerings. As a result, the in-store experience will need to evolve and greatly reduce in presence to accommodate the evolving market paradigm. Overall, in the long-term, the uncertainty around the future will mean businesses will be forced to plan for multiple scenarios as the behavior may not return to what it was before this crisis.

Contact us today, to check if you’re tracking the impact of this pandemic on your business accurately, and to make your business strategy future proof. 

Lets talk








https://www.theguardian.com/world/2020/mar/09/shopping-travel-events-what-coronavirus-means-for-consumersRetail Marketing

About Authors

Related Articles