Not so long-ago various analysts and industry experts were of the opinion that the Indian retail industry would grow to US$ 1400 billion by FY24. The e-commerce market too was estimated to grow to US$ 98 billion in FY24. Alas! A black swan event, the likes of which have never been seen before, hit the world, causing all growth to stagger globally.
Innumerable stores that were catering to the non-essential have been temporarily shut since mid-March 2020 due to the government’s response to the pandemic – a lockdown – in what is undoubtedly the most difficult crisis faced by not just the retail industry but every other industry in the world.
The Pre-Pandemic Struggle
Currently brands/companies are faced with a daunting challenge of staying relevant in consumers’ minds as they stare at a bleak future. But it is important to note that even before the global coronavirus pandemic, traditional retailers were struggling to get customers to visit their stores instead of shopping online.
But many mall-based clothing retailers that were already struggling before the pandemic haven’t been successful in converting their businesses online. Also, their businesses are not built for their stores to remain shut for such a long period. Financially, nobody knows what the economic situation is going to look like in the next few months, and this will certainly have a big impact on retail.
What Retailers Must Do Post COVID-19
So, what can we expect post COVID-19? Amid the certain economic downturn and its potential fallout, retailers face an uncertain future. Retailers who want to survive will have to understand that the post coronavirus world will be all about ‘consumers’ and what they want. The one positive here is that there is some predictability when it comes to what consumers’ want, and that is convenience.
As the landscape changes convenience above other considerations will become an important part of the equation. While the quality of the product will continue to be important, brands who differentiate themselves on factors like service, delivery, and overall convenience effectively from their competitors will be the new game changers. In short, retailers will need to understand that convenience is the new normal and will have to invest in it to rake in footfalls and make profits.
Meeting customer expectations will not be accomplished overnight. It will require cross-functional coordination and can present many challenges. Companies will have to transform their supply chains or risk becoming obsolete.
Digital supply networks (DSNs) which leverage Internet of Things (IoT) like sensors, applications, and Artificial Intelligence (AI) to make real-time decisions will be very essential for retailers to understand and implement. Traditional supply chains may no longer be sufficient for retailers seeking to meet customer expectations.
Last month, when the lockdown was announced to prevent the rapid spread of the coronavirus pandemic, the Prime Minister of India asked citizens not to step beyond the ‘Lakshman Rekha’ – the imaginary boundary line of their homes. However, as the COVID-19 curve came under control and companies – recognising the need of the hour – have implemented a lot of safety measures, government messaging changed. It is expected that once the lockdown is lifted, the government is likely to permit 50 percent of staff at any given time in any store or a factory, albeit with strict implementation of social distancing and hygiene norms.
Retailers are requesting the government to allow fashion and luxury outlets, and even malls to open in low-exposure-risk areas, even as the lockdown has be extended with a plan to gradually exit in phases.
With these measures the retail segment awaits with hope that it is well prepared for the new norm that it will see after the lockdown is lifted.