The world is slowly awakening from the disaster that was, and to some extent still is, Covid-19. Around the world, restrictions are gradually being phased out and a semblance of normality is starting to return. People have either adjusted to a “new normal”, or they are delighted to, finally, be able to get back to a “normal” normal.
Whichever way you look at it, a world that was in virtual hibernation is shaking itself out and getting ready to resume. A major part of this awakening is reopening stores that have been at various levels of closure for a significant part of the last 18 months. Reopening stores is a vital step in restoring normality. Retail accounts for around 5% of GDP in some countries and employs 8% of the workforce. The sector is a crucial contributor to any economy and concerted efforts must be made to revive it.
Reopening stores, as many and as quickly as possible, must be made a top priority. The world cannot absorb much more of the economic carnage that we have seen during 2020.
How retailers were influenced by lockdowns
The Covid-19 lockdowns and subsequent ongoing restrictions wreaked havoc in all spheres of commerce around the globe. Many retailers were unprepared for the completely unexpected and immediate closure of outlets. In most countries, only essential shops were allowed to remain open. In practice, this meant grocery shops and pharmacies. In addition to this, there were capacity restrictions and social distancing requirements. This limited the number of people that were permitted inside a store at any given time.
All other retailers, considered non-essential, were prohibited from opening to the public at all. The toll has been dire. Whilst the world is now frantically reopening stores all over, many will not have survived the lockdowns and the resultant total loss of revenues. Stimulus packages and other forms of government aid have been largely ineffective. The economic damage caused by an almost complete shutdown of economies worldwide can simply not be repaired by government subsidies. The numbers are just too vast.
Retail sales in numbers during Covid
In broad terms, retail sales have plummeted since the lockdowns began. According to statista.com, global retail sales contracted by 5.7% in 2020. The contraction was particularly stark in the second quarter when the lockdowns had just come into effect.
Sales recovered somewhat in the second half of the year as the world adjusted to the social distancing and other preventative measures. It’s interesting to note that food and beverage sales increased during the lockdowns while the other sectors lost ground. The biggest loser was the Electronics and Appliances sector which fell by a massive 53% in April 2020.
In some countries, retailers in the non-food sectors were permitted to start reopening stores from around the third quarter of 2020, albeit with capacity restrictions. This certainly helped to contain the damage and probably saved a large number of stores from permanent closure.
Retail stores pivoting to ecommerce
There was a marked swing towards online shopping at the expense of bricks and mortar stores. This has forced many smaller retailers to close down completely while the larger retailers have closed thousands of stores worldwide.
The shift towards online shopping is expected to endure with many customers still wary of contact with others. Some customers have simply been taken in by the convenience and safety of shopping from home. Whatever the motivation, it means that when retailers start reopening stores, it will be a challenge to lure customers back in.
The process of reopening stores
Reopening stores will be no easy task for most retailers.
- The shift to online purchasing will be difficult to quantify in the short term. As mentioned, the expectation is that many converts to online shopping will continue to shop online. In certain areas the decrease in footfall will be a death knell for some stores. Retailers will have to assess which makes more sense; reopening stores or channeling the investment into other growth areas
- Customers have been made acutely aware of how easily bacteria or viruses can spread. Having become accustomed to contactless shopping, most customers would expect this to continue. When retailers are reopening stores, these measures must all be implemented.
- Getting customers back into the stores may require aggressive marketing. Deep discounting and innovative new loyalty initiatives may be required. Retailers, after reopening stores, will want to maximize sales to turn inventory that has been backed up for more than a year. They will also be wanting to leverage a potential wave of “revenge buying” by customers that have, for so long been cooped up. Customers that are now aching to get out and live life again.
- The lockdowns have forced many retailers to terminate or significantly scale down supply and service contracts. Prior to reopening stores, these contracts need to be renegotiated and reinstated, wherever possible. In some cases, suppliers may also have gone out of business, so new sources may have to be found. The supply chain will also need to be managed to ensure that supplies scale up in tandem with the sales volumes of the reopening stores.
Elly can help you with the process
Despite all the challenges that we’re still facing, reopening stores need not be all that bad. As a leading player in the payment processing industry, Elly has solutions that will address some of the difficulties that retailers have to deal with when reopening stores. Elly provides a secure payment solution that offers all the currently available payment methods on a single device.
The underlying asset is a basket of cryptocurrencies. This is true borderless banking. Not only does Elly streamline the processes of payment in-store, but online payments are also made easy. Payment is processed instantly and the funds are delivered to the merchant immediately in any local currency.
Never again lose a sale because of cross-border payment restrictions or currency exchange issues. Never run the risk of losing out on a sudden drop in the cryptocurrency market. Take charge of your payment process with Elly.