How is the Indian Retail Industry coping up with COVID-19? | Tips for the Retail Industry during and post COVID

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How is the Indian Retail Industry coping up with COVID-19? | Tips for the Retail Industry during and post COVID

 

During the countrywide lockdown, how often did you step out? And was it majorly a short walk down to the nearby essential goods providing retail shop, a small supermarket, or the medical store.

Reading this, you must be feeling that these retail stores were at the leading edge with a stable business up and running. But the story was a bit different for the other side of the retail industry.

As we know, the retail industry is the second-largest employer in the country and contributes a large division of the population. To put things in perspective, small and medium-sized firms alone employ about 400-450 million people and engage a monthly business of about $70 billion. Keeping in mind the high number of expenses at this point with near to zero inflow of cash, the question stands; will retail companies be able to survive this shutdown?For instance:

Let’s get into the insights to know how the rest of the inter-related industries or the non-essential service providing industries suffered. Fifty million retailers in India generate a business of almost 4.74 lakh crores. Retailers employ around 46 million people, which sustains the livelihood of 250 million Indians. Apparel business owners witnessed a loss of 40%. Modern food retail has also seen 30%-40% losses due to supply chain problems like shortage of human resources. Nonfood retail to witness a significant impact in the next six months.

Nonfood retailers were struck as they had their shops closed, resulting in no revenue generation. The impact on apparel and textile from a manufacturing perspective will impact employment going to a limited demand going to a domestic and international market. The retail industry is expected to take a hit of 1 lakh crore due to the Lockdown. In the next 4-month food retailers are expected to earn 55% compared to the last year’s revenue.

The closure of non-essential shops could cause 20-25% employees, that is, 125 million people working in non-essential retail, excluding the other supply chain employees from the manufacturing, logistics, warehouse, and retail industry. The non-opening of the retail sectors has had a severe impact on production, entertainment, and artisans.

Looking at some positive hope for retailers, it is believed that there will be fewer footfalls but higher consumption in the next 4-5 months. But again, consumers will avoid crowded stores and prefer contactless shopping, new big players like JioMart have come into the business. Many other big hypermarkets are opting to make delivery easier for customers.

COVID-19 and the evolution of consumer behavior: E-commerce will become a New Normal Now 

The latest trends developed during lockdown have pushed the consumers to shop more through online platforms.

According to a data analytics firm GlobalData, India’s e-commerce market tends to grow at a compound annual growth rate (CAGR) of 19.6 percent between 2019 and 2023. As users are increasingly downshifting from retail shopping to online purchases due to fear of getting exposed to virus vectors such as POINT-OF-SALE (POS) terminals and cash, e-commerce payments are set to register a steep increase of 25.9 percent in 2020 itself.

The latest market research by Ipsos states that consumers are buying through online platforms more frequently now. Globally, Vietnam has witnessed the most significant increase in e-commerce shopping, with 57 percent of consumers shifting their purchase online. In addition to this, 55 percent of Indian consumers have shifted their purchases online. China (50 percent) and Italy (31 percent) are also witnessing an increase.

With stores and various malls opened this month, it remains to be seen whether customers are ready for retail therapy or will continue to be the dominant theme in retail.

How can Retailers Re-invent?

Experts acknowledge that retail businesses across India will take a significant time to recover from the impact of the COVID-19 lockdown. They also believe that it can pave the way to find new opportunities and stay positive. Retailers also consider that the pandemic has presented several opportunities for the trading community, irrespective of their scale or category. This opportunity could mean a product extension, trying out a different line of business, or innovative marketing methods. A possibility could also be in the form of new collaborations and partnerships.

One of the opportunities is going omnichannel to give consumers seamless and comprehensive shopping experience across all platforms.

Supporting the omnichannel strategy, one needs to be aware of what retailers can change to ensure high turnouts in this crisis.

Firstly, all the retailers will need to ensure a safer environment for customers.

Secondly, to redeploy or repurpose the workforce (such as chats, live, or phone conversations), conducting workshops on digital marketing could help. This step will pave the way for associates to capitalize on opportunities in case of potential customers. Another aspect is where retailers can work to make the customer experience better.

Lastly, retailers can leverage e-commerce platforms by converting offline presence online.

Summary

The tangible impact of COVID-19 and the rebound of the retail sector will depend on the duration of the crisis and the resulting range of behavior change. But what is evident is that it will test all retailers, and the ones who will be financially stable, agile in response, and active collaborators will emerge as winners.

It is important for Indian retailers to fight back during and after the Lockdown. Point Of Sale installation for Retail small to the large retail sector is very important. It is needed to provide smooth customer check out experience and ease of billing for the owners. CONTACT US for more information regarding your billing solutions.

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