To help prevent the further outbreak of the COVID-19 epidemic, all global retailers like Glossier, Nike, Urban Outfitters, and Patagonia have indefinitely shut their stores. They have also updated their working policies to ease the strain on their staff. For instance, Starbucks has introduced a ‘catastrophe pay’ scheme for its US employees, by which, the retailer will pay staff for upto 14 days if they are diagnosed or have been in contact with someone suffering from Coronavirus.
Consumers switch to online shopping
During this week, with most of retailers shutting stores, e-commerce sales have surged by a staggering 71 per cent. However, most of this surge is restricted to categories like garden furniture, crafting, etc. Fashion sales, on the other hand, have dipped. American expenditure on fashion has declined as instead of fashion merchandise, Americans are preferring to stock essential goods.
The situation is similar in other markets too, in China, sales of household staples such as rice and flour have quadrupled on JD.com since the same period the previous year. In the UK, supermarkets, online grocery delivery slots have sold out for the next three weeks at least.
Though these ecommerce retailers may benefit in the short-term, they are likely to face issues relating to stock and supply chain in future. Hence, it would be important for them to quickly invest in order to meet demand.
An opportunity for omni channel retailers
Closure will also have a big impact on the revenues of brick and mortar retailers like Primark. However, it would provide omnichannel retailers with an opportunity to shift their focus to ecommerce.
For the most in-demand online retailers, delays or disruption in deliveries could negatively impact their brand’s reputation or loyalty in both the short and long term. Earlier this month, Amazon warned customers deliveries would be slower than usual, and since, there have been complaints that certain categories are continuously out-of-stock.
Going forward, retailers need to be both transparent as well as vocal about how they are approaching the situation. A majority of retailers have been sending out marketing emails in order to address how they are handling the situation. However, they also need to be responsive on social media and other digital customer support channels.
These e-commerce retailers also need to adopt the practice of ‘no-contact deliveries whereby delivery workers leave packages at the door. Indeed, some of them are seen to be taking proactive steps to help and protect their consumers. For example, Louis Vuitton owner, LVMH, has begun to use its perfume production lines to make hand sanitisers, which the brand is sending out to hospitals in France. Elsewhere, retail stores are precautionary measures like going cashless or staggering entries.