Retail in APAC during COVID-19
As I sit writing this, the retail community across APAC is facing one of the biggest challenges in recent memory, COVID-19. The virus that emerged at the end of 2019 in China has now spread across the world causing huge damage to communities and economies along the way. With countries across APAC now in lockdown, foot-traffic at most physical retail locations has ground to a standstill and retailers are facing an uncertain future.
In my time working in the retail industry in APAC, we’ve never seen anything on the same scale as the impact the coronavirus is having on retail across Asia and ANZ. Retailers of non-essential goods have seen demand fall by as much as 60% as consumers rein in their spending based on their needs vs. their wants. However, some industries including grocery and pharmaceutical have seen an increase in sales as consumers look to stock up on essentials.
As in previous epidemics, like the SARS outbreak in 2003, retailers have to change their ways of working to cope and meet the increased demand. After all Alibaba and JD.com, both grew significantly during this period.
Online retail, that was already growing quickly will benefit as consumers who are unable to visit physical retail stores become reliant on online shopping. In Singapore for example, the demand for online grocery and food delivery currently sits at about four to ten times higher than the pre-outbreak period. Similarly, in Australia eCommerce has soared with online grocery sales increasing as much as 45% during the past month. However, if the global lockdown intensifies and continues even they will suffer as they struggle to maintain their supply chains and workforce.
Industries such as food delivery, eGrocery and flexible labour are innovating to overcome barriers caused by the crisis. Fashion and apparel brands, for example, are shifting to selling on social platforms such as TikTok and Instagram and are experimenting with AR technology that allow consumers to try on clothes without being in the physical store.
Retailers who were advanced in their eCommerce journey now have an advantage over their competition who were not. For less mature companies the next few months could be make or break as retailers battle to meet the shift in consumer behavior and the increased online demand.
Companies will need to put in place achievable eCommerce targets, boost product discovery, overcome channel conflict, constantly test and optimize and implement fast and reliable delivery to improve conversions and foster loyalty. Those that do will come out of this well equipped to prosper when the crisis ends.
The short to medium term will see many consumers shopping online for the first time and previously moderate users increasing their activity. There is now a big opportunity for retailers to bring consumers over to their brand for the first time and keep them coming back. Retailers that optimize their eCommerce strategy now will come out of this crisis stronger and better prepared to take on future challenges.