Is the Retail Industry ready for Post-Pandemic Boom?
Pandemic is a synonym for Disruption, and we think that the majority of you would agree with us here. It has led to disrupting the very taken-for-granted life we have had and it would continue to do so for a little longer but, sooner or later the human race will rise above it and a NEW normal would be adopted by all.
It has become an existential question for the human race as the pandemic has led to widespread loss of life, livelihood, and closure of businesses especially the social interaction dependent retail stores. At some point, retail stores will reopen (and they did before the tsunami of the second wave hit us)—but unless retailers redefine the role of the store and revamp store operations, they will be ill-prepared for the WITH-COVID-19 future.
On the other side of it, consumer behavior has shifted from spending to discretionary spending, in other words, saving propensity has gone up. Fatigue is setting in, of lockdowns, of restrictions, of movement, of socialising, of traveling, of being human; in other words, the very framework which differentiates the human species from other species on this Mother Earth, we are after all social animals. Even our prehistoric cousins couldn't, after all, stay bound to one place, they were happily moving around spreading the footprints, having various settlements, exchanging genome (and giving chance to formulate the Darwinian theory)
The current situation is so unfamiliar that the intellectuals are turning to history for a sense of what to expect. The records suggest that whenever events of such epic proportions have led to massive non-financial disruption (such as wars and pandemics), the GDP does bounce back.
But the quintessential question remains, Why???
Well, history offers us Three lessons.
First, the people want to shun their fatigue and want to step out, to spend, to meet, to greet, to travel but are fearful due to the uncertainty of the situation. Second, tough times or challenges lead people to innovate, try new ideas, find new ways of doing things that seemed so easy pre-crisis, all the while upending the structure of the economy. Third, as “Les Misérables” (it is a novel by Victor Hugo) shows, this upheaval of life on every possible front doesn't leave out political upheaval too (France was under a prolonged political uncertainty post the Spanish flu), with of course economic consequences.
Now let's dive just a little deeper into the Three lessons:
Take consumer behavior First.
According to a study by The Economist (Source:https://www.economist.com/finance-and-economics/2021/04/29/what-history-tells-you-about-post-pandemic-booms)
During the pandemic period, the consumers tend to save for the rainy day (The spending opportunities too, are diminished of course) as the uncertainty looms large in their lives. Well, the only difference in current pandemic being, post-COVID-19, it's not as much as the history provides evidence for. The reason, spends shifting to Online.
Second, The push towards online, digital transformation, adoption of new technologies, automation, has accelerated in the last year across life spheres and industries. Whether all adoption of technology and automation will lead to faster economic recovery or further loss of livelihoods or bottom lines, is a debatable topic so let's not go there in detail. But, for the retail industry, this is the time to adopt new ways of connecting with customers, engage them and provide a NEW experience of shopping. There is another compelling reason for retailers to do so, switching online is bad for the bottom line. According to a study by McKinsey (Source:https://www.mckinsey.com/industries/retail/our-insights/reimagining-stores-for-retails-next-normal)
If even 10% of retail store sales moves online it leads to a downward impact of 5% in operating profit. Making many stores and brands unviable to sustain. They further articulate the ways a retailer should go about adapting to the change in status quo, most categorically being adding a personalized touch to the service and communication, with the retail customer. A One-to-One engagement channel, which nudges the consumer to engage with retailers repeatedly and in different ways, like SMART RECEIPTS.
As for the Third lesson, well, let's park it aside for other forums to discuss.
So are we really waiting for Batman to bring the boom, Buzzinga!!! Nope, there are well established and innovative ways to build a sustainable brand, stay hungry for more as we would be posting soon.Refer your friends and family to this rewarding journey of Karnival.