The COVID-19 pandemic has caused uncertainty, complexity and change in retail as it has in all industries. The disease will have significant influence in deciding which companies survive and which fail.
The accounting firm KPMG reports on four fundamental retail trends it says have been accelerated by the pandemic.
- The evolution of business models. Analysts expect that driving income growth through physical stores has passed its zenith. Many companies are turning to online companies and divisions to drive future growth.
- Companies are putting people ahead of profits. According to a study by Edelman two years ago, nearly two-thirds of consumers around the world said they would decide to either buy or boycott a brand based solely on its position on a social or political issue.
- Cost cutting will continue. Most retailers recognize that conventional forms of cost cutting are no longer enough to shore up margins and rebuild the business, the firm reports. Most retailers recognize they will need to go further than current cost-cutting to return their business to profitable growth in the years ahead. Expect to see a flurry of investments focused on improving the value of existing assets over the coming year.
- Supply of merchandise is critical. In today’s environment, customers care less about breadth of assortment and more about availability. That could change the way many retailers operate. As different countries moved into lockdown status and “non-essential” retail stores closed their doors and grocery store shelves emptied, those retailers who knew their customers had a clear advantage.