3 ways the coronavirus will transform retail

by Scott Spivack •

Over the last two months, COVID-19 has upended the way Americans live, work and shop. As consumers continue to follow shelter-in-place guidelines, their spending habits and behaviors are beginning to change dramatically.

Coronavirus may already be the defining issue of the time, but many of its more lasting effects have yet to manifest. Our research indicates three emerging trends caused by the coronavirus that are likely to determine the future of retail.

eCommerce will continue to grow, but won’t be a cure-all

There is no doubt that eCommerce sales have increased since the outbreak of coronavirus. According to a recent Bizrate Insights survey, 47% of consumers are making more purchases online.

Do you make more purchases online as a result of COVID-19?

Source: Bizrate Insights Flash Survey, April 2020.

Unfortunately, many eCommerce companies have also seen a decline in sales as a result of increased spend on essential goods. Another recent survey shows that while consumers are buying groceries, toiletries and medical supplies in larger quantities, they’re less likely to spend on other goods, putting retailers like fashion outlets at risk.

Economic pain and consumer anxiety will limit spending

COVID-19 has undoubtedly sparked a recession, with record unemployment claims and severe stock market losses. This uncertainty has made more consumers reluctant to spend, even among those who maintain steady employment. In our survey, 38% of shoppers responded that they were making fewer impulse purchases than before the outbreak.

How have your shopping habits changed as a result of COVID-19?

Source: Bizrate Insights Flash Survey, April 2020.

After an initial rush of shoppers stocking up on food and other supplies, many retailers will likely see a decline in average order value and overall sales as consumer confidence continues to slip.

Larger retailers will thrive at the expense of smaller specialty stores

Major brands like Wal-Mart, Target and Amazon were already a threat to small, independent retailers, but COVID-19 has exacerbated this.

To prioritize their safety, consumers want to get the items they need in the least amount of time and with as much social distance as possible. Stores who offer a seamless online experience for their essential goods and curbside pickup to limit person-to-person contact will benefit. Specialty goods stores will be especially hard-hit as consumers trend towards only buying what they view as essential.

Retailers must do what they can to adapt their business while recognizing there isn’t one universal fix. To survive, some brands will need to diversify or otherwise adjust their product selection, while some will need to consolidate their operations.

Check back weekly for additional updates and news on the consumer response to the COVID-19 crisis and trends surrounding important omnichannel solutions like in-store and curbside pickup.

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