Now that the Dust is Settling - The Future of Retail in a Post-Pandemic World
August 19, 2021
Image by Pixabay
The fears from the COVID-19 pandemic and the accompanying government-mandated shutdowns and social distancing measures transformed the way Americans, lived, worked, shopped, ate, exercised, and watched movies. In many ways, the habits formed during the shutdowns have opened up opportunities to radically change many aspects of life.
For the retail industry, the impact of COVID-19 in 2020 was profoundly devasting. For small businesses and restaurants forced to shut down for extended periods of time or quickly modify their business model to accommodate the mandated closures, they were unable to operate and many were forced to close permanently.
On the chain retail front, already struggling from the changing consumer preferences and the forces of e-commerce, the lockdowns and mandated closures by governmental agencies was the final nail in the coffin for many. In 2020 alone, an unprecedented number of retailers declared bankruptcy, and by November of 2020, nearly 49 chain and national retailers had declared bankruptcy. The amount was greater than retail bankruptcies occurring in 2009 during the financial crisis.
Some of the popular retailers and household names of these retailers included: JC Penney, Neiman Marcus, GNC, Brooks Brothers, Sur la Table, Ann Taylor, Lord & Taylor, J Crew, 24 Hour Fitness, Golds Gym, and many others. Many other retailers remain on the brink including movie theaters, gyms, and sit-down restaurants, as well as apparel retailers.
With the cases of COVID-19 beginning to wane, along with a national campaign to vaccinate as many Americans as possible, government authorities are beginning to relax their social distancing restrictions, lockdown measures, and mask mandates. The country finds itself reopening and Americans are awakening to a new and familiar routine as they find themselves "getting back to normal."
While the forces of e-commerce were already present and growing, the COVID-19 crisis expedited and broadened the use of e-commerce by consumers. Amazon's recent sales figures clearly show the uptick in online shopping and Amazon has been the clear winner from the pandemic. The online retailer's sales jumped 37% during the third quarter of 2020 and experienced a 44% increase in the fourth quarter 2020. For the first quarter ending 2021 total retail sales continued to grow 44% and experienced a 224% increase year over year to the same quarter 2020.
Many other retailers like Target and Home Depot benefited as these retailers began integrating in-store and online shopping options in 2017 to take advantage of the shifting tide of online shopping for both delivery and pickup.
It is estimated that in 2021, 17% of all retail purchases for retail will be online. Meanwhile, purchases made through mobile devices reached $434.1 billion in 2019 according to JP Morgan, and are forecast to hit $729 billion by 2023.
Movie Theaters - Streaming or Movie Theaters
After the pandemic is over, viewers will likely return to movie theaters, but many may be content watching new releases on-demand from their homes instead. Historically the studios have been very reliant on box office ticket sales which rose to 26% of total global revenues in 2000 and rose to 46% in 2019.
During the crisis, premium video on demand or "streaming" has emerged as a viable way for studios to reach movie fans. According to a study by Deloitte, in the first few months of COVID-19 stay-at-home orders, 22% of consumers paid to rent or watch on-demand movies, and 90% said they would do so again. By October 2020, according to a second study by Deloitte, 35% said they had watched an on-demand movie release. Although more consumers are now open to the possibility of steaming to watch newly released films, 68% of those surveyed in the same study indicated they would like to watch some movies in movie theaters once the pandemic is over.