- Traditional retail outlets struggled prior to the pandemic as consumers enjoyed the convenience of online shopping.
- The pandemic amplified this trend and technology companies have enjoyed record profits during the health crisis.
- In-store shopping must evolve and innovate to survive, and big changes are being implemented.
The world of retail is currently experiencing labor shortages and high consumer demand, simultaneously. While it is unclear how the industry plans to cope with these matters in the short-term, in the long-term, we can expect big changes that are already being implemented.
The way retail shopping and work is managed is going to change after the pandemic.
But in what ways? Will we regain the pre-pandemic model of the retail industry? Or will things shift completely to online shopping?
The shift began before the pandemic
The pandemic has transferred the general world of work over to the internet.
Remote work is at an all time high, and this is projected to only increase as time goes on. The retail industry – with respect to working and consuming — is no exception in this respect. However, the pandemic didn’t cause this shift to occur: it simply amplified a shift that was already in motion.
Prior to the pandemic, consumers already began to shift from going into stores to shop, to simply shopping online. The pandemic simply made it so –at least initially– online shopping was the only option.
The United Nations’ division on trade and development, UNCTAD, reported “the e-commerce sector saw a ‘dramatic’ rise in its share of all retail sales, from 16 percent to 19 percent in 2020,” boosting global e-commerce to $26.7 trillion because of Covid-19.
Changes in what consumers buy online
The pandemic has changed the types of things people buy online. For instance, shopping for groceries online pre-pandemic was quite uncommon. Now, by contrast, 61 percent more consumers shop online for groceries.
Working in retail during the pandemic initially entailed not working at all. Retail workers –at least in the U.S.– were not considered essential workers, and thus were out of work.
Now that things are beginning to re-open –and in some states, like New York, where things have been virtually back to normal for months– retail workers aren’t necessarily coming back.
In September alone, 685,000 retail workers quit their jobs, according to the U.S. Bureau of Labor Statistics.
Retail workers are leaving their jobs in droves because of the poor conditions and low pay. Nominal pay raises and improved benefits by retailers have failed to entice workers back to the cash registers, stock rooms, and restaurant kitchens.
What new developments are here to stay post-pandemic?
Online shopping will continue to increase
Online shopping is here to stay and comes with benefits.
However, we should not get our hopes up that online shopping will totally replace in-store shopping. 91 percent of shoppers report that they miss being able to shop in-stores. The demand is there, and thus the retail industry will supply.
Nonetheless, in-person shopping will become subordinated to online shopping. According to the U.S. Centre for Retail Research, “rapid online growth will continue for at least another eight to ten years … between one-in-ten and one-in five stores will no longer be needed.”