The year 2020 started with the global pandemic created by COVID – 19 virus which apart from being a global health crisis also emerged as a global economic threat. While the virus is still spreading widely, with the start of Unlock 1.0 in India from June 1 2020, the retail industry is trying to combat the situation by opening up amongst uncertainty.
With heavy reliance on imports for electronic goods from China which were impacted because of the lockdown the electronics sector is due to be under pressure for some time till end of 2020. Certain categories that are import-dependent such as laptops and dishwashers are witnessing a huge rush in sales and companies have stretched imports two-four times in the past few weeks. The main reasons are manufacturing in local plants has taken a hit because of non-availability of migrant labour, closure of plants due to corona virus infections and the inability to scale up production due to distancing norms within plants.
The fashion retailers have decided to continue with their Spring Summer collection that will be taken to Fall Winter season. This will help in clearing the piled stock and delaying the order cycle for next season. Contrary to the expectation the fashion retailers continue to operate at full price. There is a change in the consumer behavior as in the present that may impact the behavior in future as well. People are doing most of their shopping online. Offline retailers which were already facing the heat before the lockdown because of online sales now need to think of a different business model, faster, that would help them recover the impact of lockdown and sustain as well. But it is not that e retail is not facing any challenge.
Sellers have come online because for them this is the only channel that is working in the present, but the availability of products is very low leading to gap in fulfilling of demand. Logistics and operations are concerns where sellers are facing problems. It is expected that operations would resume in a staggered manner over the next few months. Restaurants and malls that were to open from June 8, 2020 are renegotiating their contracts with landlords. Less than 20% of restaurants opened on June 8 because of lack of preparation. For more than two months there has been no revenue for them and gracefully both restaurants and malls would have to hold hands to resume business. The health and beauty segment especially segments such as salons may only be able to recover in the last quarter of the fiscal year.
The operations are being redesigned by both organized players such as Lakme as well as unorganized players being high touch industry hygiene standards would become essential. The décor industry realized that the future belongs to trends such as multifunctional and customized furniture. Apart from these characteristics, eco-friendly, customer friendly and easy to handle furniture is going to be preferred. Coming to books and stationery as a category with no counter sales and orders, bookstores have been using social media to engage customers. Audio books and kindle editions have become new trends. Stores have been keeping track of each order and have started doing home delivery immediately when allowed.
Thus it can be seen that all segments of retail industry have been impacted and will take almost this complete year to recover. Business models are bound to change and new models would definitely evolve. Still struggling with the virus, COVID - 19 has become the latest disruptor that has impacted both sides of business transactions that is the supply and the demand. Moving ahead, the shape of Indian retail curve can only be decided once the spread of the virus starts declining.