We all know some of the major ways COVID-19 has affected not just the retail space, but the world. But what about all of the behind-the-scenes functions that were affected as well? What does it mean for the future of manufactures, industrial suppliers, logistics companies and so many other functions that make up the whole retail industry? Today we’re going to focus on 4 of the less-known ways that COVID-19 has impacted the retail landscape forever.
There’s a Wider Gap Between Big Spenders and Penny Pinchers
Between a fluctuating unemployment rate, irregular spending patterns and a cultural shift from COVID-19, we’ve seen a much wider gap form between heavy spenders and those looking to save. This is largely attributed to the unexpected nature of COVID-19 and all the events that followed it, leading many consumers to reflect on their spending habits.
Prior to the pandemic, there was a larger pool of those looking to spend, but since, some have had to make adjustments. This wealth disparity has led to a need for further segmentation of retail audiences, forcing retailers to adapt accordingly.
Retail Supply Chain
From face masks to paper towels and disinfectant wipes – you can’t argue that we saw a massive surge in demand for certain products. With this, most only considered the impact this may have on the manufacturing side of things, but few looked at the logistics of it all.
Professional freight carriers had to rethink their supply chain to accommodate this almost-sudden rise in demand for just certain products. The process of coordinating with manufactures, to finding more efficient routes to match the rises in cost. Just as they did with the rise in the frozen supply chain, freight companies had to leverage new tech to project and plan given outcomes that yielded maximum results.
Huge Threats to Luxury Brands
With a sharp decrease in buying power among the average consumer, fewer people have the resources to splurge on the ‘unnecessary’. As a result, lower-tier luxury brands have made the switch to a more inclusive position to accommodate this dip in buying power, whereas top-tier luxury brands are doubling down. In time, this could mean gradual price increases to supplement the lack of volume in sales they’re seeing.
However, this could create a new opportunity for smaller brands to break into the low-tier luxury space. Only time will tell how the world adapts to the economical ramifications of COVID-19.
Brands Are Still Focusing on Customers Experience… From A Distance
For retail brands, the products they offer only make up so much of their true value. In fact, it’s a lot less than most people realize. People shop from retailers for the experience – and if they can’t capture that essence in person, brands have decided to shift to more socially distanced measures.
Live Video is allowing brands to take their customers ‘behind the scenes’ for a more intimate experience. Augmented Reality is allowing brands to improve engagement, taking customer loyalty to the next level. More emphasis on eCommerce to compensate for their lack of in-store foot traffic.