Disruption caused by Covid-19 has affected the entire world’s economy. Each sector is fighting a battle of survival from the impact of this pandemic. To prevent the spread of this deadly virus, government of various countries implemented lockdown, which punched the retail industry very hard. Retail stores including garments, mobile phones, hardware, electronics and so on has been shut across the globe except essential food, grocery, and medical stores. Food, grocery, and medical retailers who deals with essential commodities are facing various challenges such as ensuring liquidity, supply chain disruption, management of social operations such as social distancing, managing consumers demand, governance issues, ensuring the safety of employees, personal hygiene etc. Non-food retailers witnessed a reduction of 80-100% in their sales in India. Even essential food and grocery retailers are facing losses as they are not permitted to sell non-essential commodities which usually generates higher margin.
With the lockdown prevailing in most of the countries, the retail industry has almost come to a grinding halt and traders are observing a downfall in their revenues. For example, in South Korea, as per figures released by Korea’s Ministry of Trade, retailers witnessed a drop in retail sales by approx. 5.5% during April 2020 as compared to last year’s results. In Japan, retail sales declined by 13.7% in April 2020 as compared to previous year, owing to decrease in demand for general clothing, vehicles, merchandise, and so on. In India, as per the statement from Confederation of All India Traders (CAIT) retail Industry comprising of approx. 7 crore traders has experienced a loss of $72,764.3 million (RS. 5.50 lakh crore) in March 2020 due to lockdown imposed to prevent the spread of coronavirus. This results in shut down of 1.5 crore retail stores permanently as traders fail to cover their average cost and a further 75 lakh traders will fold up in medium term who are dependent on these 1.5 crore traders.
Due to prevailing lockdown, more than 95% of non-food retailers closed their shops and generating zero revenue till this lockdown exists. As per Retailers Association of India (RAI), the non-food retailers expect to earn approx. 40% revenue in coming months as compared to last year’s revenues and food retailers expect to earn approx. 56% of revenue in coming 6 months as compared to last year’s revenues. Considering the global retail industry, usage of digital technologies in the retail sector may curb the losses that may incur due to over or limited stocking of items in stores through adoption of sales intelligence and usage of Augmented Reality in Retail.
To meet the increasing demand for essential food and groceries items various offline retailers and wholesalers shift to digital retail marketing by adopting appropriate digital technology enabler such as location analytics tools, business analytics software, consumer analytics tools, and vendor management software to serve their customers online. Online platforms are emerging as facilitators to ease the transition and growth for various offline retail shops. This will enable seller to simply list their product on online platforms and sell them after striking a deal with customer in exchange of contactless payment by avoiding face-to-face contact with customers.
Retail industry is experiencing a drastic liquidity challenges as cash inflow has come to standstill and fixed operating cost remains unscathed. This leads to a large scale of unemployment across all over the globe.