It’s a good day to look at what’s in store for retail (pun unintentional).
COVID-19 has given the retail sector quite the drubbing, although it hasn’t meted that out equally. The virus has been a gift to the grocery sector, where panic buying and online shopping took food retail to new heights. Hardware e-commerce has fared well – particularly for stores that already had an online shopping model that could easily accommodate curbside pick-up.
Fashion retail, however, is not having a good time of it.
This isn’t a new turn of events – fast fashion has been suffering for some time now, and 2019’s year-end lists included a long obituary for a number of once-prominent retailers. Sadly, that trend will continue for 2020. As per Scott Galloway, Pivot Co-host and NYU professor, “stores with escalators will fail” – meaning that department stores and retailers like GAP and Anne Taylor might never re-open. However, those that already have a strong digital footprint (think Sephora and Warby Parker) have a good chance of surviving – and thriving – in this ‘retailpocalypse’.
So, what will future retail look like?
Well, it’s a given that e-commerce will definitely be more accepted. An April survey commissioned by Dalhousie University’s Agri-Food Analytics Lab found that 22 per cent of Canadians intend to buy food online post-COVID-19, compared to barely 4 per cent who bought online before the pandemic. Some also predict a ‘democratization of the supply chain‘ – shoppers sourcing foods from regional suppliers before the items ever make it to the large retailers.
As for fashion, it’s expected that second-hand and clothing rentals (also known as ‘recommerce’) will continue to gain popularity. In fact, the clothing rental business is expected to be worth USD $2.5 billion by 2023.
Although COVID-19 has exposed longer-term problems for brick-and-mortar retail and supply chain weaknesses, it is safe to assume that a robust digital sales strategy will be a good base for merchants in 2020, and beyond.
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