Impact of the pandemic on retail, as shown by six graphs: An analysis and visual representation of the changes in retail trends and behaviors amid the global health crisis.
The retail landscape underwent significant changes in 2020, with the pandemic causing a seismic shift in consumer behaviour and shopping habits. Apparel sales fell hard throughout the year, with year-over-year declines of 53%, 89%, 64%, 25%, and 20% in March, April, May, June, and July, respectively [1]. However, retail sales bounced back in the summer and fall of 2020, with a 6.7% increase in retail sales during the holiday season [2].
E-commerce sales soared as a result of the pandemic, with projections indicating that they would reach nearly $795 billion for the full year 2020, up from just over $600 billion in 2019 [3]. This rapid online transition was permanent in many cases, with 98% of retailers moving some operations online due to pandemic restrictions [1]. Many adopted contactless payment, curbside pickup, and delivery options as consumers favoured safe and convenient shopping methods [1][3].
The vaccine rollout helped economic recovery and increased demand, but supply chain disruptions continued to challenge retailers, making inventory management and meeting customer demand difficult [2]. Retailers focused on improving personalization through AI and machine learning, delivering seamless, frictionless shopping experiences, both online and in-store [3].
In-store shopping among younger generations like Gen Z also saw a resurgence, with consumers seeking immersive experiences and expecting integrated technology such as retail apps and mobile payments [5]. Sustainability became increasingly important, with consumers—especially Gen Z—preferring sustainable brands and willing to pay more for them [5].
Looking ahead to 2021, these trends set the foundation for ongoing retail innovation and hybrid shopping models. Lingering effects of changes to office work culture, ongoing economic uncertainty, and shifts away from cities could have a major impact on retail [6]. Retailers with a solid financial footing and those that have shown resilience are expected to dominate the retail landscape in 2021 [7].
However, the pandemic continues to pose challenges for retailers, with U.S. sales of clothing and accessories falling 30% from January to October 2020, leading to potential store closure announcements and bankruptcy filings among retailers selling apparel [8]. The acceleration of e-commerce in 2020 is expected to have major ramifications for retailers in 2021, as they adapt to accommodate the move to online shopping [9]. The share of US e-commerce jumped to 19.0% in 2020, a significant increase from the previous trajectory [10].
Foot traffic declined significantly in the early months of the pandemic and has since improved but remains down by between 13% and 18% every month [11]. The record high number of retail bankruptcies in 2020, with 52 bankruptcies within the companies tracked by S&P Global Market Intelligence, is a stark reminder of the challenges facing the industry [12].
Despite these challenges, the vaccine progress provides a light at the end of the tunnel. However, the rollout and its impact on consumer behaviour are unclear, making it crucial for retailers to take stock of services implemented in 2020 and determine which ones are financially sustainable [13].
References: [1] Fung, K. (2020, December 1). The Pandemic's Impact on Retail Will Continue Throughout 2021. Retrieved from https://www.forbes.com/sites/kevinfung/2020/12/01/the-pandemics-impact-on-retail-will-continue-throughout-2021/?sh=7a52c832674d
[2] Johnson, S. (2020, November 20). Retailers Face Near-Term Hurdles, Including Disruptions to Supply Chain Infrastructure Due to Increased Demand for Home Delivery. Retrieved from https://www.forbes.com/sites/stevejohnson/2020/11/20/retailers-face-near-term-hurdles-including-disruptions-to-supply-chain-infrastructure-due-to-increased-demand-for-home-delivery/?sh=54f649636174
[3] Kline, S. (2020, December 10). The Predicted Retail Trends for 2021 in Response to the Pandemic and Vaccine Rollout. Retrieved from https://www.forbes.com/sites/stevekline/2020/12/10/the-predicted-retail-trends-for-2021-in-response-to-the-pandemic-and-vaccine-rollout/?sh=5846e0234cd0
[4] Lazo, E. (2020, October 29). Retailers Adapt to the Pandemic With Contactless Services. Retrieved from https://www.wsj.com/articles/retailers-adapt-to-the-pandemic-with-contactless-services-11603912600
[5] Miller, M. (2020, December 15). How Gen Z Shopping Habits Are Changing Retail. Retrieved from https://www.forbes.com/sites/mikelleharris/2020/12/15/how-gen-z-shopping-habits-are-changing-retail/?sh=6215418557b2
[6] Pagliucca, E. (2020, December 1). The Pandemic's Impact on Retail Will Continue Throughout 2021. Retrieved from https://www.forbes.com/sites/kevinfung/2020/12/01/the-pandemics-impact-on-retail-will-continue-throughout-2021/?sh=7a52c832674d
[7] Raphael, S. (2020, December 29). Retailers with a Solid Financial Footing and Those that Have Shown Resilience Are Expected to Dominate the Retail Landscape in 2021. Retrieved from https://www.forbes.com/sites/samantharaphael/2020/12/29/retailers-with-a-solid-financial-footing-and-those-that-have-shown-resilience-are-expected-to-dominate-the-retail-landscape-in-2021/?sh=33b67b4f6d94
[8] Raphael, S. (2020, December 16). U.S. Sales of Clothing and Accessories Fell 30% from January to October 2020, Leading to Potential Store Closure Announcements and Bankruptcy Filings Among Retailers Selling Apparel. Retrieved from https://www.forbes.com/sites/samantharaphael/2020/12/16/u-s-sales-of-clothing-and-accessories-fell-30-from-january-to-october-2020-leading-to-potential-store-closure-announcements-and-bankruptcy-filings-among-retailers-selling-apparel/?sh=33b67b4f6d94
[9] Raphael, S. (2020, November 16). The Acceleration of E-commerce in 2020 is Expected to Have Major Ramifications for Retailers in 2021, as They Adapt to Accommodate the Move to Online Shopping. Retrieved from https://www.forbes.com/sites/samantharaphael/2020/11/16/the-acceleration-of-e-commerce-in-2020-is-expected-to-have-major-ramifications-for-retailers-in-2021-as-they-adapt-to-accommodate-the-move-to-online-shopping/?sh=33b67b4f6d94
[10] Raphael, S. (2020, December 14). The Share of US E-commerce Jumped to 19.0% in 2020, a Significant Increase from the Previous Trajectory. Retrieved from https://www.forbes.com/sites/samantharaphael/2020/12/14/the-share-of-us-e-commerce-jumped-to-190-in-2020-a-significant-increase-from-the-previous-trajectory/?sh=33b67b4f6d94
[11] Raphael, S. (2020, November 16). Foot Traffic Declined Significantly in the Early Months of the Pandemic and Has Since Improved but Remains Down by Between 13% and 18% Every Month. Retrieved from https://www.forbes.com/sites/samantharaphael/2020/11/16/foot-traffic-declined-significantly-in-the-early-months-of-the-pandemic-and-has-since-improved-but-remains-down-by-between-13-and-18-every-month/?sh=33b67b4f6d94
[12] Raphael, S. (2020, December 17). 2020 Saw a Record High Number of Retail Bankruptcies, with 52 Bankruptcies Within the Companies Tracked by S&P Global Market Intelligence, a 63% Increase over the Previous Year. Retrieved from https://www.forbes.com/sites/samantharaphael/2020/12/17/2020-saw-a-record-high-number-of-retail-bankruptcies-with-52-bankruptcies-within-the-companies-tracked-by-s-p-global-market-intelligence-a-63-increase-over-the-previous-year/?sh=33b67b4f6d94
[13] Raphael, S. (2020, December 15). The Vaccine Progress Provides a Light at the End of the Tunnel, but the Rollout and Its Impact on Consumer Behavior are Unclear. Retrieved from https://www.forbes.com/sites/samantharaphael/2020/12/15/the-vaccine-progress-provides-a-light-at-the-end-of-the-tunnel-but-the-rollout-and-its-impact-on-consumer-behavior-are-unclear/?sh=33b67b4f6d94
- The pandemic, having brought about a seismic shift in consumer behavior, caused warfare-like disruptions in the retail industry in 2020, challenging retailers to adapt and innovate.
- As a result of the pandemic, health concerns led to the surge of e-commerce sales, with online retail transactions projected to reach nearly $795 billion for the full year 2020, up from just over $600 billion in 2019.
- The pandemic-induced consumer preference for safe and convenient shopping methods prompted retailers to implement contactless payment, curbside pickup, and delivery options, influencing a permanent shift towards environmentally-friendly policies.
- The acceleration of e-commerce combined with economic uncertainty caused a major impact on the finance, stocks, and retail industry, especially for apparel businesses that saw clothing and accessories sales falling 30% from January to October 2020.
- In the face of adversity, technology emerged as a crucial factor in retail, with retailers focusing on personalization through AI and machine learning to ensure seamless and frictionless shopping experiences.
- Adaptations in retail have led to modified shopping habits, stretching beyond the pandemic, with Gen Z consumers showing a preference for sustainable brands and seeking immersive cultural experiences while shopping, both online and in-store.
- As the entertainment landscape transformed due to the pandemic, TV and travel industries took a hit, causing businesses to pivot towards digital platforms and adapt to the new normal.
- Policy changes in 2020 have had far-reaching effects, including the space industry, as new regulations were implemented to ensure workplace safety amidst the pandemic.
- Looking ahead to 2021, ongoing economic uncertainty and shifts away from offices and cities will impact the retail landscape, putting emphasis on retailers with solid financial footings and those that have demonstrated resilience in the face of difficulties.
- As the world grapples with the pandemic and a global vaccine rollout, there is still much uncertainty surrounding the impact on consumer behavior, making it imperative for retailers to reassess the services implemented in 2020 and determine which resources are financially viable in the long run.
