The COVID-19 pandemic has affected nearly all industries, but the retail sector has felt it more than most. Social distancing regulations and lower spending rates have left many Canadian retailers in a tough position. As the pandemic continues, retailers of all sizes need to prepare for more market fluctuations.
Retail sales fell 26.4% in April, and continue to fluctuate amid the uncertainty of the COVID-19 economy. Despite these changes, there are steps that retailers can take to mitigate the damage. Below are five practices the retail market can adopt to stay afloat in the pandemic.
1. Maximize Online Channels
While in-store sales have plummeted, that’s not the case with online purchases. E-commerce sales now account for 10% of all sold goods in Canada, putting them at the highest they’ve ever been. If retailers hope to maximize their profits at this time, they’ll have to emphasize their online stores.
Social distancing regulations prevent many would-be customers from entering brick-and-mortar stores but don’t affect online sales. If retailers don’t list much if not all of their merchandise online, they limit how much product they can move. Alternatively, by maximizing their online channels, they become more versatile and can survive further disruptions.
2. Embrace Elasticity
The COVID-19 economy is a tumultuous one, and the outlook of the post-COVID market is uncertain. In the face of this uncertainty, retailers will have to adopt a more flexible approach to doing business. Supporting multiple ways to sell and deliver products ensures businesses can survive more market fluctuations.
Retailers that adopt practices like curbside pickup or delivery services can perform better. Fluctuations can affect the profitability of other sectors or services that retail relies on. If stores don’t have options they can turn to when these changes come, they may suffer.
3. Diversify Supply Chains
Just as the retail market needs to be elastic with their services, they need to vary their supply chain systems. It’s impossible to tell what product sources or logistics companies will see further disruptions under COVID-19. According to the Organisation for Economic Cooperation and Development (OECD), retailers should diversify their sources of goods to survive these changes.
Having multiple options is the key to success in an uncertain time. Keeping a diversified portfolio helps investors survive market fluctuations, and a similar approach aids retailers. Without diversity, disruptions along the supply chain can affect a retailer’s profitability.
4. Demonstrate Empathy
The stresses of the COVID-19 pandemic affect everyone, not just a single store and not only retailers. Businesses can take this opportunity to show fellow Canadians that they care about them and how this situation affects them. Ethical motivations aside, demonstrating empathy in a time of hardship can help improve a retailer’s public image.
Canada will get through the pandemic by working together, so now is the time for compassion. If a retailer doesn’t help others, they can’t expect people to help them in return. In a time of substantial change, retailers can become a consistent force of positivity.
5. Keep Consumers Updated
Retailers should keep customers in mind during the pandemic. According to one survey, 46% of Canadians report feeling regularly stressed during this time, and uncertainty plays a considerable role. In light of this stress, consumers will appreciate a consistent source of information, which retailers can provide.
As the situation continues to change, customers may be unsure about how stores are operating. Given their stress levels, retailers can’t expect them to seek out this information on their own, so they need to provide it. Stores need to communicate often and clearly about their response to developing circumstances to keep consumers informed.
Navigating the COVID-19 Economy
There’s still a considerable amount of uncertainty surrounding the COVID-19 economy, but businesses should expect further market fluctuations. These changes can be challenging to deal with, but with a flexible approach, retailers can survive them. If retailers cling to old practices, they may succumb to the recession, but adaptation can keep them afloat.