Marketing Research

THE INNOVATION OF RETAIL AS A RESULT OF COVID-19

The Coronavirus pandemic has drastically reshaped the landscape for retailers. As prolonged quarantines and strict social distancing guidelines become the norm, it's evident that the retail industry must adapt to meet new economic and health-related challenges. This transformation extends beyond temporary adjustments, heralding a new era of retail operation that is likely to persist long after the pandemic subsides.

As the pandemic continues to affect global markets, retailers have stepped up their efforts to provide essential goods while protecting the health of the community. According to a McKinsey report, "75 percent of US consumers have tried new shopping behaviors in response to economic pressures, store closings, and changing priorities" (Buck et al., 2020). This significant shift in consumer behavior is forcing retailers to reassess their inventory management and distribution strategies to better align with evolving consumer demands.

To navigate these challenges, many retailers are turning to technology. The integration of the Web of Things (WoT) and Artificial Intelligence (AI) is becoming increasingly prevalent, helping retailers manage supply chains more efficiently and predict future product demands with greater accuracy (Jain, Crespo, & Khari, 2020). For example, smart stores in California are using AI to analyze inventory levels and customer demographics to tailor the shopping experience, enhancing customer engagement and satisfaction (Thomas, 2020).

Furthermore, cloud computing is revolutionizing the retail sector by providing scalable solutions for inventory management and customer service. For instance, Walmart’s collaboration with Microsoft on cloud solutions has shown how these technologies can streamline operations and enhance the consumer experience (Meredith, 2018). Additionally, RFID technology has proven essential in improving inventory accuracy and operational efficiency. Retailers like River Island have experienced a boost in stock accuracy from 70% to 98% after implementing RFID technology, demonstrating its effectiveness in retail operations (Comparesoft, 2020).

As the COVID-19 pandemic continues to drive technological adoption in the retail sector, these innovations are likely to have enduring impacts on consumer behavior and business operations. The integration of advanced technologies will be crucial for retailers aiming to build resilient, efficient, and customer-centric business models in a post-pandemic world.

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Marketing Research

THE EFFECTS OF COVID-19 ON RETAIL DISTRIBUTION CHANNELS

The Coronavirus has altered the playing field for retailers; after months of quarantines and statewide social distancing guidelines, it is clear that standard operating procedures in retail will continue to change as health and economic consequences from the new “normal” evolve. As the Coronavirus outbreak spreads, the immediate response has been significant. In the early days of the pandemic, the number of coronavirus cases continued to grow. States across America had to take desperate measures to enforce social distancing. Many governors put their civilians on a “stay at home” order, forcing restaurants to close their doors to dine-in customers. People were only allowed to get groceries, exercise, and a few other essential products and services. The restaurant industry faced a significant challenge as their central distribution channel had been blocked off.

According to a news article by Mashable, written by Sasha Lekach, delivery quickly became the dominant or only aspect of restaurants' business during this time ("Delivery apps become essential for restaurants to survive during pandemic," 2020). With civilians forced to stay home, many opted for delivery and takeout. To meet this demand, restaurants quickly adopted delivery apps like Postmates, Uber Eats, Grubhub, and Doordash. A survey cited by Mashable found that 92 percent of restaurants used a delivery app after March 15, when the pandemic effectively began in the U.S. ("Delivery apps become essential for restaurants to survive during pandemic," 2020).

Looking ahead, there are numerous unknowns complicating predictions for the future of the restaurant industry. However, it's clear that once the pandemic concludes, significant decisions will need to be made. The panel at PYMNTS shares a prediction that "food choice in general — is becoming a whole new world in front of our eyes" (PYMNTS, 2020). The distribution channels of the restaurant industry have fundamentally changed, giving consumers numerous ways to obtain their preferred meals without dining in. Sahil Rahman, co-founder of Washington, D.C.'s fast-casual Indian restaurant RASA, predicts that people will be less inclined to leave their homes for food once they've experienced the convenience of delivery ("21 Ways Restaurants Could Change Forever, According to Chefs," 2020).

Before the pandemic, the main distribution channel for the restaurant industry was dining in, but now take-out and delivery options have become more popular. An article in QSR mentions that while Gen Z may not sit down for lunch, they will grab food whenever it’s convenient, leading to changes in the distribution channel of the restaurant industry ("How Gen Z Will Change the Restaurant Industry," 2018).

Similarly, nonessential retailers have also had to adapt to the restrictions of COVID-19. Total Retail reports that an increasing number of shoppers have turned to options such as delivery, curbside pickup, and buy online, pick up in-store (BOPIS) to observe social distancing measures ("The Future of Retail After COVID-19," 2020). This shift has accelerated the adoption of BOPIS, with Adobe Insights director Taylor Schreiner stating that online purchasing trends formed during the pandemic may see permanent adoption ("COVID-19 Accelerated E-Commerce Growth '4 to 6 years'," 2020).

The retailing world has seen significant growth in e-commerce orders, as reported by Forbes, with a year-over-year growth of 129% in U.S. & Canadian e-commerce orders as of April 21 ("How Covid-19 Is Transforming E-Commerce," 2020). Department stores have struggled to stay open, with Tech Crunch reporting an expected decline of over 60% in department store sales for the full year, while e-commerce is projected to grow by nearly 20% in 2020 ("COVID-19 Pandemic Accelerated Shift to e-commerce by 5 years, new report says," 2020).

The online e-commerce market is expanding rapidly, with Market Watch projecting 7.4 million new online shoppers in 2020 alone ("Shoppers will pay more for the same item online versus in stores under new COVID-19 conditions, experts say," 2020). As a result, businesses are increasingly focusing on e-commerce to generate revenue.

Overall, the COVID-19 pandemic has accelerated the development of restaurant pick-up/delivery options, BOPIS, and e-commerce, with technology playing a central role in each implemented solution. These changes to distribution channels and their management are likely to have a lasting impact on the retailing world, ushering in a new era of digital retailing.

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