Syracuse University’s Martin J. Whitman School of Management hosted a virtual panel concerning the retail industry in June. The webinar, Perspectives on Retail in the Wake of COVID-19, covered various aspects of retail, including how the industry has been affected by the pandemic and what it may look like moving forward.
The panel was moderated by Associate Professor of Supply Chain Management Julie Niederhoff. Among the panelists were Professor of Retail Practice Ray Wimer; CEO of Talbots and Whitman Advisory Council (WAC) member Lizanne Kindler; and Associate Professor of Marketing Guiyang Xiong.
With the current state of the retail industry, the future looks vastly different as a result of the changes from COVID-19. Current supply chain challenges include manufacturers not being able to get the supplies or parts needed to produce products. Niederhoff says, “Our manufacturers are seeing big upheavals in terms of what they’re being asked to do.”
Wimer notes that in May retail sales jumped up 17.7%. “When we really think retail, taking out gas and automotive sales, we see that jump to be 12.4%, which is much higher than anticipated,” he explains. He acknowledges that while some credit may be due to stores physically reopening during May, some of the increase may be due to stimulus check spending, which is not a sustainable event.
He also explains that he believes the pandemic has accelerated trends that were already present in the retail industry, like the rise of online shopping and the decline in popularity of traditional department stores.
A recent Forbes article, “7 Predictions For How COVID-19 Will Change Retail in the Future,” echoes this sentiment and shares that an acceleration of e-commerce is one of the major trends that has emerged because of the pandemic. “The coronavirus pandemic will accelerate e-commerce adoption, as many experiment with, and even become reliant on, the online channel while in isolation,” according to the Forbes article, with online grocery shopping showing similarities, as well. “Many customers will permanently shift to e-commerce, following in the footsteps of South Korea after the MERS outbreak in 2015.”
While some trends and innovations may be fleeting, others have the potential to stick around. For example, as COVID-19 has halted people’s ability to go into physical stores, let alone try clothing on, there may be a need for new technology in retail, such as virtual fitting rooms. The question becomes: Will virtual reality help retailers increase sales? “Perhaps yes,” says Xiong. “Maybe it would because it will make the online shopping experience more real, more enjoyable, and it would reduce uncertainty because consumers can have a better idea of how the clothes actually fit them.”
The discussion surrounding trying things on virtually goes beyond just a new shirt or pair of jeans. Other industries are testing the waters, as well, with companies like Kendra Scott and Sephora offering virtual try-on sessions for jewelry or makeup, respectively. However, there is some controversy over this kind of innovations, mainly because of privacy concerns. The Washington Post highlights this debate in a recent article entitled “Virtual Try-Ons are Replacing Fitting Rooms During the Pandemic.” The article says, “Privacy experts say there are inherent risks. Testing a lipstick by webcam leaves a trail of personal and biometric data, valuable real-time insights into consumers’ wants and lifestyles.”
As for looking towards the next few years in the retail industry, Kindler says that there are three main areas she has been considering since the time of initial shutdown in mid-March. First is wondering how the company will survive this uncertain period. Secondly, is the challenge of continuing to engage with consumers despite not having physical stores open. “I think transparency, communication, mindset and engagement with our customers is important,” Kindler says. Third, is how companies must pivot and start looking towards the future. “I think this is a pivot moment for retail. I think we’re really going to have to try and be innovative — but in an exciting way,” she says.
With the rapid changes in the retail industry, companies need to readjust their plans to adapt to consumer purchasing. What those adjustments may be remains to be seen. However, one thing is certain — retail will need to take a hard look at the way it does business if it hopes to succeed in a post-COVID world.
Learn more from retail industry experts about their perspectives on retail in the wake of COVID-19.