An EY perspective on the key retailer issues and the resilience strategies that they can build for now, next and beyond.
The COVID-19 pandemic continues to impact most industries at an unprecedented scale globally, including retail that has witnessed significant disruption over the past few months. Amidst widespread health concerns, travel restrictions and local movement limitations, retailers in India, where the crisis has just started playing out, are already feeling the heat.
Impact of COVID-19 on retailers: Now, Next and Beyond phase
Indian retailers are faced with a multitude of challenges – “now”, “next”, and “beyond”. We are currently in the “now” phase where most retailers are coping with a complete pause in business. Even food and grocery players and chemists, that deal with essential commodities, although allowed to operate now, are facing challenges. These challenges include managing consumer demand, ensuring liquidity, supply chain disruptions, management of store operations to ensure social distancing and proper hygiene, governance issues, and ensuring the health and safety of employees. While essentials (personal care, food and beverage, home care) would be the lesser impacted, health and economic concerns would reduce consumer confidence and their spend on non-essential goods (apparel, furniture) and high ticket items (consumer electronics, jewellery). In the medium term, or the “next” phase, where the government starts easing restrictions, retailers will need to focus on bouncing back from the current situation. In the long-term “beyond” phase, they need to focus on transforming to succeed in a new business landscape. The challenges would be to cater to consumers via their preferred channels and to build business resiliency to operate smoothly during any future crises.