The retail sector has been experiencing tough times due to the COVID-19 virus. Sales have been proven to be resilient in the past year and, consumers opted to shop online majorly serving as an acceleration of the preceding trends. The scale of change has been astonishing with the growth rate of online market distribution that could have been achieved in five years being realized in just weeks (Mandal, 2020). The e-commerce sales baseline is expected due to the support from growing investments and increased customer benefits from online purchasing. Intense pressure has been naturally imposed on high streets due to increasing costs and closure of stores. The speed of change has been so much that some high-profile organizations have been unable to bear recording a large number of store shutdowns and layoffs.
Brick and mortar have forever been reformed by the pandemic as it was a big blow to retailers. Stores were forced to close up, and although some have been reopened, the lasting changes caused by it are unavoidable. Some retailers have extended the closing of stores for various reasons. Companies that were previously high-profile have announced their plans of permanently closing down. The adoption of working from home has brought some hope for shopping regions as it normalizes their local shops. Even though some shops may recover after the pandemic, others may opt to still work from home even after the subsiding of the pandemic. More malls are expected to weaken at a faster rate than the expected trend (Abrudan et al., 2020). The first-time level of collaboration between landlords and tenants has been ushered by the troubles caused by the pandemic proving flexibility for retailers so that they serve customers at their respective locations.
Elimination of weak retailers from the market continues more rapidly than expected. Almost all the retailers still in the market have filed for bankruptcy with a determination to restructure. It is the crisis that caused those who dissolved to be currently out of the market. The level of bankruptcy has risen rapidly to higher levels than it had ever been seen. Weak retailers are susceptible to entirely vanishing due to their lack of cash and severe decline in sales. With the prevailing trend, fewer stores are expected to be operational soon.
New owners in the market have become the center of attention. The course of business models may completely be changed by the new retailers brought into the market by the pandemic. These retail owners are focused on buying properties of old retailers who are not able to keep pace. There is a shift of ownership taking place although its impact is not yet seen. Some of the brands may be separated from their operations, while those companies that were for households may end up relying on licensing. Those retailers that focused on specific products may sell their copyright to companies, and definitely, the shopping experience will be greatly impacted.
Non-specialized giants in the marketplace will put to combine their gains. Huge companies like Amazon experienced explosive growth due to the massiveness of their capital resources used in business and capability investments. The culture of these companies made sellers gather there as it has never been experienced. Customers were saved from long trips and exposure to the virus as a result of their extensive offerings (Çakiroğlu & Çengel, 2020). Specialized retailers got exposed to the effects of being abandoned by consumers due to low prices and convenience. What lies ahead now is determining whether small specialists will compete against their rivals or whether the biggest players in the retail market can maintain the customers won during the crisis.
There has been a notable expansion in the circular economy recently. The circular economy was in control in 2019 due to a shift that was experienced from renting to resale services. The distinction between old retailers, resellers, and rentals continues to fade away. Partnerships are being formed, and as consumers become more aware of the environment, adjusting to the circular model may become workable for retailers. Customers may even dedicate themselves to minimize on the amount of waste they generate.
Department stores have been experiencing lots of suspicions and questioning. When there is an unavoidable decline in retail models that used to flourish when the middle class prospered, the department stores may be suspected and questioned regarding the decline. However, it is not clear that consumers are completely handed over to the department stores. The matter in question is whether department stores can grow on their own. They have a great chance of redefining who they are although in most cases they are confusing and uninteresting. They are expected to be good at the idea of staging experiences.
More retailers are getting into the troubled territory since there has been a big increase in retail bankruptcies lately contributing greatly to an overflow of store closures. Retailers with decreasing sales are still existing and are prone to bankruptcy. Those that can dodge restructuring will be needed to close a huge portion of their store base. Even though the rate of closure might slow down, a sudden stop of the same is not expected. Lowering prices by the rivals is still ongoing, and as retailers administer their footprints, new ones keep growing but the equilibrium is still way beyond.
Stores are changing their purposes as selling directly to the consumer has been reevaluated as a means of ensuring their survival. Most of them are being forced to open in Brick-and-mortar places to cut down the cost involved in acquiring customers when they operate solely (Babin et al., 2021). Shrinking of store footprints is deemed necessary even by heavies like malls and the rare of store closure has exceeded that of openings by far according to research. Organizations are now looking out for ways to evolve so that they best attend to the needs of their customers.
Irrespective of the products retailers sell, it is important that they work on personalizing their products, focus on the customer, and create consistent experiences with their customers to survive in this evolving retail world. Retailing has developed to a large scale and needs the information above to find a direction for change and strategize on issues that lead to business expansion. They have to find beforehand solutions to the problems that the change will cause. Retailing continues to change at a rapid pace and retailers must come up with an effective way of competing necessary to guard the interest of their consumers. In addition, they have to come up with ways of adapting to the changing world. Preparation always leads to success and no one knows what may come up in the future so it is good that retailers should always stay prepared. This will help reduce the number of store closures, layoffs, and change of purpose.
References
Abrudan, I. N., Dabija, D. C., & Grant, D. B. (2020). Omni-channel retailing strategy and research Agenda. In Perspectives on consumer behaviour (pp. 261-280). Springer, Cham.
Babin, B. J., Feng, C., & Borges, A. (2021). As the wheel turns toward the future of retailing. Journal of Marketing Theory and Practice, 29(1), 78-91. Web.
Çakiroğlu, K. I., & Çengel, Ö. (2020). Customer experience management in omnichannel retailing. In Managing Customer Experiences in an Omnichannel World: Melody of Online and Offline Environments in the Customer Journey. Emerald Publishing Limited.
Mandal, P. C. (2020). Retailing trends and developments-challenges and opportunities: Retailing trends and developments. International Journal of Business Strategy and Automation (IJBSA), 1(2), 1-11. Web