Amid the gloom that’s been prevailing across segments of the economy due to Coronavirus pandemic, there is good news. A report by Capillary Technologies, a SaaS Company, states that while the short-term impact on retailers will be severe; however, India's retail sales recovery might kick into gear from the first week of May, if the current lockdown is not extended further.
According to the report, undertaken on the impact of COVID-19 in the retail ecosystems of India, Middle East, China, and Singapore, consumer retail sales and walk-ins did not see much dip until 16 March; however from 17 - 25 March, India’s consumer retail witnessed a big drop in sales by 46% and 55% fall in the number of customers per store. Single brand outlets noticed larger drop in sales as compared to mutli-brand outlets primarily due to customers preferring to minimise travel by shopping at a single shop for multiple products or brands. The ongoing 21-day nation-wide lockdown, to contain the spread of Coronavirus infection, is further expected to add to the plight.
"This is a very trying period for retailers across the globe. Reports suggest that it will take 5 or 6 months for the world to recover completely from the impact of this pandemic. In India, we are still in the critical phase of a national lockdown," said, Aneesh Reddy, CEO, Capillary Technologies, said. He added that while the Indian government is doing everything in its power to battle the virus from their end, retailers can also look up to their peers in China and Singapore to save their businesses and chart a quick road to recovery. The report makes it clear that it is the omni-channel retailers who are providing personalised shopping experience that are surviving the pandemic.
At company level, offline teams should coordinate with the online team to divert the traffic to their ecommerce website/app and clear out the inventory.
Reddy is of the opinion that after the pandemic Indian retailers across sizes will understand the power of omni-channel digital transformation. “In the long run, consumer brands particularly should increase the percentage of their e-commerce business and deploy O2O (Online-to-Offline model) strategy of reaching consumers across touch-points to prevent businesses from closing down," said, Reddy. As a matter of fact, the O2O strategy concerns bringing physical store customers to online stores, and is considered a necessary ingredient to omni-channel retail, which is about creating a consistent experience for customers in retail stores and different online channels.
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In India, the study notes, lifestyle and fashion retailers are likely to be impacted most due to the restrictions and lockdowns, resulting in a demand squeeze. However, the combination of young demographics, rising disposable income and the positive headroom growth for organised retail in India could mitigate many of the challenges in the long term. It adds that live commerce has become an emerging trend to bank upon amidst the COVID-19 sales slump, a lesson that needs to be learnt by Indian retailers.