The Motion Agency

The COVID-19 Impact on Retail


There’s no doubt that the COVID-19 pandemic is immensely impacting the retail climate. The implications are far reaching – disrupting supply chains, cancelling or postponing global and cultural events and businesses are shuttering both temporarily and permanently. As a result, consumer purchasing behavior continues to drastically change, with online retail at the forefront.

E-commerce has firmly been on the rise but now, more than ever, online buying is soaring due to the billions of people under stay-at-home-directives. Businesses are contending with the surge in online orders, and those retailers once thought to be successful only by brick-and-mortar standards have shifted their strategies to become true players in this new landscape. It’s safe to say the retail environment will forever be changed due to this worldwide health crisis, but what exactly does this mean for businesses moving forward? And how can online retailers, be it traditional or these new players, differentiate themselves during this time of unprecedented demand and in turn, set themselves up for success when things return to “normal?”

Following are key trends and industry insights we’ve observed in the wake of COVID-19, and thoughts on what this could mean for online retailers moving forward.

Grocery Stores Go Modern with a Hint of Nostalgia

As society continues to confront COVID-19 and comply with social distancing guidelines, more and more retailers are implementing curbside or pickup options like Tractor Supply Company and even high-end Chicago restaurants Alinea and Gibson’s. Those deemed essential retailers, like grocery stores, hardware stores, restaurants and pharmacies that don’t traditionally operate in an e-commerce capacity, have shifted to doing just that.

  • Looking to the Future: This too shall pass. The COVID-19 crisis will end, but the reluctancy of congregating in large groups could remain – at least for some time. This uncertainty will undoubtedly continue to benefit online retailers. And for those conventional, brick-and-mortar businesses wanting to survive, they seemingly will have to adopt new, omnichannel retail strategies to meet customer demand. Additionally, several of these modernization techniques are reminiscent of that old-school neighborhood delivery milkman. Well, with many now hunkering down in their homes, perhaps those old school techniques will come back in a unique way – fostering face-to-face relationships with delivery people

The Retail Hail Mary, Slashing Prices and Steep Discounts

If you’ve spent any time checking your email inbox or scrolling through social media, you’ll have noticed that retailers from fashion to beauty to home décor are slashing prices and offering steep discounts, during a seasonal period  of  time not known for big bargains. After quickly deemed “non-essential”, your favorite stores are only operating online. To keep businesses afloat, these discounts are acting as a short-term stimulus and opportunity to sell off time sensitive inventory.

  • Looking to the Future:  In theory, brands are hoping to entice shoppers who are feeling semi-financially stable to use this time to stock up on seasonal items offered at an incredible value. Unsold inventory can make or break a business. The issue with this approach is rooted in consumers exercising responsible and essential spending habits. Many recall the 2008 financial crisis and are hesitant to make any nonessential purchases. Brands will need to prepare to reinvent or provide new offerings, in addition to short term discounts, to entice the shoppers who are tightening their purse strings.

Brands Giving Back

We’ve seen it across the news, brands are touting big donations and offerings to give back to those affected by COVID-19. Shoe titans like Crocs and Allbirds donated huge numbers of product to health care workers and first responders. Whereas others like Summersalt or Caraa offered a percentage of sales to benefit a range of charitable organizations.

  • Looking to the Future: On a marketing and communications level, these donations offer a two-pronged benefit. On the one hand, brands are securing organic, positive media coverage that helps showcase their company values, in a time when media relations opportunities are limited. The other advantage is retailers have the opportunity to further establish and strengthen brand loyalty and affinity. When the COVID-19 dust settles, whenever that may be, consumers are projected to continue making selective purchases and this is where brand loyalty becomes crucial.

Retailers Get Creative

In light of mass stores closures, specifically those with a physical presence, businesses are grappling with how to engage with their traditional in-store customers. Modern furniture and home décor retailer West Elm already had an online presence but now, they’re offering new, virtual design services and online product offerings tailored to the work-from-home professional and typical e-commerce shoppers alike. These solutions are helping West Elm to, “pivot from its traditional retail approach by interweaving new mediums aimed at facilitating online shopping,” according to Home Textiles Today.

  • Looking to the Future: What West Elm is doing is offering a new option for customers during a time when in-person shopping is simply not possible. Capitalizing on creative, online approaches to reach new and existing clientele is the way to go right now and, presumably, in the future. It’s those businesses that know how to strategically pivot when necessary are the ones that will likely succeed in the long term.

Collectively, we are navigating through a time not any one person has ever experienced. As COVID-19 spreads, so, too, does the widespread concern about how this will affect the retail landscape as we know it. It is apparent, however, that the longer Shelter-in-Place remains, the larger the impact on how retailers will undeniably have to continue to pivot, as consumers will be forced to alter their shopping behavior. Retailers who remain true to their products, services and values, in this ever-evolving climate, through engaging customers with humility and integrity, have an opportunity to succeed and prevail.

The blog was co-written with Brianna Sachs and Erin McGraw.