Coronavirus is creating an entirely new retail ecosystem

For years the retail sector depended heavily on footfall, but the public health-driven lockdown means that thousands of stores just aren’t seeing the same volume of customers that they once did. And many aren’t allowed to welcome customers to their bricks and mortar premises at all. 

Times of crisis are traumatic for all involved, but they also tend to foster the most innovative responses. When businesses are on the line, people are prepared to take risks they wouldn’t ordinarily. And some of them pay off. 

Those who were tracking the progress of the virus in China back in January saw disruptions coming to the retail industry. From the reproduction number and the open border policy, it was clear that the virus would eventually make its way here. It was just a matter of time. 

In those precious few weeks, there were already preparations underway in some sectors of the economy. Amazon’s Jeff Bezos sold $4 billion worth of company stock, perhaps in anticipation of the carnage in the stock market to come. And other sectors of the economy met behind closed doors to discuss what the likely outcome would be. 

It wasn’t until the official announcement of the lockdown, however, that it became clear to retailers how they would need to adapt. Some non-essential stores would have to move online entirely. In contrast, grocery stores remain open to keep the house-bound population well-fed. 

A new style of retail

In the last few weeks, we’ve seen companies serving the retail industry dramatically shift their production processes to contend with this new coronavirus-dominated world. Printing houses, for instance, now supply retailers with a host of social distancing floor graphics to ensure that their customers remain two meters apart.

Vodka producers are using their abundance of alcohol to provide hand sanitizers. And delivery companies are massively expanding their operations, allowing sellers to outsource deliveries and prevent people from having to go to the shops. 

Things are also changing significantly in the restaurant industry. We’re seeing the emergence of so-called “dark kitchens” where chefs silently beaver away, producing meals for Deliveroo riders. We’re also seeing a big difference in consumer desires.

The current shutdown isn’t just public policy run amok - it’s also something that threatens individuals. People are going to require a lot of encouragement to leave their homes in the future and go for a restaurant meal with their family. 

Will bricks and mortar stores return? 

Footfall, though, remains the main reason for the change in the ecosystem. Data suggests that a week into the lockdown, high street traffic was down a whopping 94 percent. Central locations were even more affected than outlying retail areas, many of which remained stubbornly open to residents throughout the crisis.

The question now is whether the traditional retail unit model is still viable. Is closing stores forever and moving online a knee jerk reaction to a crisis that will blow over? Or will this experience change the way that people shop forever? We just don’t know yet. Whatever you think, though, we’re in for a wild ride.