Retailers Association of India (RAI) along with Trust for Retailers and Retail Associates of India (TRRAIN) organized a Webinar on ‘Retail 2020: Reset. Recover. Revive’, the third in the series of webinars focused on the impact of Covid-19. The webinar was moderated by BS Nagesh Founder, TRRAIN & TRRAIN Circle. The panel included:
– Christian Verschueren, Director-General, EuroCommerce
– Ian McGarrigle, Chairman, World Retail Congress
– Matthew R Shay, President &CEO, National Retail Federation
– Simon Susman, President, Intercontinental Group of Department Stores.
The aim of the webinar was to bring to light, retail issues pertinent to the current situation at a world scale. The key highlights of the session was:
Change in Consumer Shopping Behaviour
– Consumers initially said that they are going to change the way they shopped but not necessarily how much they spend. That’s changed. Now consumers are pulling back in order to save enough to get through this.
– When the crisis hit, there was panic buying everywhere including China, Australia, Europe, and America which leads to a crisis situation for both brick-and-mortar stores initially and then the gear shifted to the e-commerce portals.
– Patterns of shopping will change, conspicuous consumption will disappear, food will remain strong
– More consumers are adopting e-commerce and this change will have long-lasting effects
– A sense of understanding in prevailing in the consumers’ mindset as they have started to realise the importance of retail.
Effects on Businesses
– Results from the survey of 1,500 Indian retailers indicate that 20-25 percent of retailers will not be able to survive even the next three months of closures/lockdown
– Stores have been closed for over 3 weeks and restoring them to full growth will be a task. Even the wealthiest countries are predicting 30-40 percent bankruptcies
– 80 percent of department stores across the globe are closed. Creating our own ability to preserve cash is critical.
– Survival is the critical issue for all segments of retail right now, particularly small businesses and non-essential retailers. The survival for them means cash which is currently out of the picture.
– Some of the retail trends will be witnessing acceleration including digital, personalization, fulfillment, delivery.
– When the stores do open the systems and processes that brands put in place with various degrees of success will remain in the minds of consumers
– This is a crisis for the medium and semi-large retailers. Small retail enterprises are looking for potential help from the government and large corporations can take care of themselves. Those in the middle are stuck with no backing or ability to help themselves.
– There is going to be a huge rise in demand immediately after the lockdown is lifted due to consumers wanting to reconnect with their family and friends.
Guidelines for Retailers
– Communication will be a critical aspect.
– It is an opportunity for brands to rebuild their value initially. For instance, brands that are helping the community as per as their demand and requirement will go a long way in creating value in the minds of consumers
– The real opportunity is in the power of the brand. The ability of people to trust brands will be a key aspect.
– The importance to have a strong supply chain will become the new necessity.
As compared to the USA and few countries in Europe, the Indian government is yet to announce an economic package for the retail industry. There have been health and financial package announced so far. America announced a package for the retail industry.
– Developed economies and the larger economies have treated in a more organized way in terms of relief packages and fiscal policies with retailers and SMEs in comparison to the emerging markets like India and South Africa.
– Defining the term ‘essential’ is extremely crucial. Restricting it to just food and pharmaceutical products is not the right way to go about it.
– Most retail bodies across the globe are asking governments for a gradual opening up of non-food essential stores.
Everyone is going to pull back from their consumption. And for those at the low-income level we will have to create a kind of demand to get the economy moving. It’s going to be about stimulus. Stimulating the economy is going to be the next phase. Right now, it’s about relief.
The session concluded by emphasizing the fact that the virus knows no borders and the situation will be resolved only through global co-operation. The experts also made a strong appeal for the international co-operation as this crisis is not limited to one country or region. The essentials have so far done very well and will continue to do so. However, due to the crisis, the new definition of essential service is emerging, and it is not just food only. Consumers have started realizing the importance of retail and are changing accordingly. It is a global crisis, and everyone should be in there together.