The impact of the coronavirus (Covid-19) on the retail industry is being widely felt. Retailers which rely on customer footfall, such as traditional brick-and-mortar department stores, have been significantly affected.
Conversely, the coronavirus outbreak may introduce new opportunities to the retail industry, and online retailers are increasing trading volumes and attracting new customers. However, all firms face supply chain challenges due to traffic restrictions, limitations on cross provincial procurements and a lack of delivery capacity.
- Companies must keep a tight control on costs. A flexible management approach will be essential to control labour costs, rental costs and non revenue-generating areas
- Firms should urgently prepare supply chain operations for the economic recovery. We recommend that retail enterprises proactively align with suppliers regarding production and supply to prepare for the rebound in consumption
- To build greater resilience, it is necessary for retail companies to establish crisis prevention and risk mitigation mechanisms
- Focus on long-term business development by strengthening internal capabilities in the following areas:
- Build "omni-channel" marketing and digital retail capabilities, innovate business models, and upskill employees for the technological revolution
- Companies should plan for the future of their brick-and-mortar stores by using big data on footfall, customer profiles and shopping preferences to judge which locations have the best long-term value
- Accelerate the integration of different formats and categories
- Improve the supply chain network and ensure all products have more than two suppliers
- Invest in digitalisation and functionalisation and increase efficiency.