It's no secret that COVID-19 has both been highly disruptive for both commerce companies and consumers that identify with them. Starting with the identification of a new type of virus by Chinese Authorities on January 7, 2020, to a rapid spread (within a matter of weeks) to Thailand, South Korea, Iran, Italy, and the United States, it was clear that the Novel Coronavirus was moving quickly and impacting the health of many across the globe. On February 11, the World Health Organization had labeled the disease 'COVID-19'. By March 11, 2020, as the world grappled to learn about not only about the source of the virus and rapidly began efforts toward finding a vaccine, the World Health Organization declared the outbreak a global pandemic.
This introduced an unprecedented time of uncertainty and concern for the businesses across the United States as those considered 'non-essential' were asked to close their doors for an unforeseen amount of time, with promises of regular communications, reviews and adjustments to re-opening timelines from state and local authorities, and government-backed loans to help with cash flow in the short term.
For nearly two months, the majority of non-essential businesses in the United States have been faced with perhaps the most difficult economic battle of the last century. Needless to say, April was a difficult month as companies tried to stay solvent by allowing their employees to work from home. However, due to limited cash flow and extreme limitations on the ability to sustain business, companies began to furlough employees and many found themselves filing for bankruptcy. According to Marketwatch, the unemployment rate outlook as a result of COVID-19 could end up 'surpassing 25% and breaking the all time record set during the great depression'.
Yet for a number of companies, and in particular those interacting with the consumer directly, this can be a time of growth and change as we battle back with safe, prudent, and strategic approaches. There will be new learnings, new processes to be implemented, and even growth in revenue as states start to open back up. And while it will likely be some time before we return to normality, the rate at which the world bounces back will be based on how committed companies are to moving forward to open, execute, and meet customer and employee expectations with the right technologies and processes in place. In other words, the success of retailers over the next 3-6 months will be directly tied to how frictionless they can make the consumer experience. In consideration of this, we'd like to offer a few strategies that every retailer should consider.
The outbreak of COVID-19 has had an indelible impact on our culture and resulting behavior. How we work, travel, socialize, and shop have all changed – and we are all questioning what the new normal will be as states and businesses reacclimate and reopen for business. In the specialty and department store retail business shoppers have become accustomed to shopping online, however, the percentage of online business – although increasing year over year – still pales in comparison to brick and mortar sales; by NRF statistics, they are only 10% industry wide.
The inventory purchased months prior to the COVID-19 pandemic was meant to support store sales as well as online. Some of this inventory could be delayed in customs, some may not have left the manufacturer, and some could be sitting in the DC meant to be shipped to stores. Much of this merchandise is seasonal. Typically, 80% of merchandise is fashion. By the time the stores open, it will be obsolete.