The COVID-19 pandemic has made the entire world recalibrate itself in all aspects of life. While businesses are re-strategizing and have shifted their ways of doing things, consumer behaviour has largely changed as well. It is now critical for businesses to adjust their functions to meet the new demands.
As buyers adjust to changed economic circumstances with a greater focus on healthcare, their spending behaviour is expected to be polarized – on one end will be those who have been minimally affected by the corona virus economically; whereas, the other end will be those who have faced the brunt of unemployment. This polarization of spending is expected to drive new considerations for retailers and brands as they urgently re-examine the range of products being offered and the pricing dynamics within.
Retailers across the world are finding new ways to manage and meeting the increase in demand by shifting to e-commerce. The global retail industry has been the least hit with online retail picking up pace now as we move towards the rebound stage of the global lockdown days. In the UK, for example, online retail increased by 22% in April; while the U.S. retailers' online year-over-year (YoY) revenue growth grew as much as 68% as of mid-April. In Thailand, the growth of online orders is up by 40% as compared to last year same month, while the number of orders coming from pure play e-commerce also show an increase by 35%. Globally, online retail orders have depicted an impressive 146% YoY growth rate with online conversion rates showing an increase of 8.8%.
While these figures suggest a promising picture for online retail, it’s likely that the rise is down to a select few categories. The world’s largest retailer, Amazon has announced its constrain in handling consumer demand and therefore, will be delaying the delivery of non-essential items, or in some cases not taking orders for non-essentials at all.
This is just one example of what is to be expected from online retailing not just in the West but in Pakistan too. COVID-19 has changed the dynamics of retailing such that the manufacturing sector is presented with a double-edged sword. While this shift in consumer dynamics is bringing some retailers and manufacturers exceptional demand, at the same it is also bringing an untimely end for others.
The question remains, will this drastic change in consumer behaviour stabilize once the COVID-19 curve is flattened, or is this our new normal? How are businesses strategizing for the rebound, reboot and reinvent phases of post-lockdown era?