The world economy and markets from across the globe are experiencing an unprecedented transformational period brought about by the pandemic, and for better or for worse, the business climate across industries are doing their best adapting to the new normal. On the one hand, Q1 earnings reports from JP Morgan and Goldman Sachs were much better than expected, leading many to believe that we’re about to see a new uptrend enter the markets. And, on the opposite end, we can’t forget to acknowledge that most essential frontline workers are still working day and night, with social distancing measures getting stricter each day.
Undoubtedly, there’s a large feeling of uncertainty and nothing but speculation and analysis to trust, and among the industries evidently affected by the pandemic, the retail store industry is being cast with equal amounts of doubt and promise. In a nutshell, there are two leading views; one that believes we are entering the dark ages for brick and mortar stores with a retail apocalypse, and the other that believes there’s a significant chance of retail resurgence. So, today we’ll be going over both sides and take a quick rundown of the retail industry’s future beyond the pandemic.
The Global Pandemic Sped Up The Transition To Online Retail
From the viewpoint of a retail apocalypse, the cornerstone that drove this perspective into the limelight is how the global pandemic managed to speed up the transition to online retail and stores. In fact, even before the pandemic grew to a global issue, we already bore witness to people’s growing preference for ordering online as opposed to making a quick trip to their local Target or shopping center. There were already signs and charts that pointed to its slow and steady demise, and when everyone was stuck on lockdown throughout the previous year, this event introduced more people to the idea of online shopping.
- Convenience Of Ordering Online: Convenience and accessibility were always the names of the game, and ordering online gave everyone a platform to quickly scroll through all the available products, items, and services from the comfort of their home. Over time, more and more people grew to love the ease of their shopping experience, and numbers continued to surge as physical branches were closed.
- Store Closures Speculation: A UBS report predicts that over 80,000 stores will close in the US, and these speculations were backed by the rise of e-commerce and the aftermath of the pandemic once unique government support measures are over. The report states that while we are experiencing a current uptrend with retail sales, these numbers and opportunities are short-lived, especially those in clothing and accessories.
- Cryptocurrency Boom And Widespread Adoption: Last but not least, cryptocurrency has seen a major boom marking its all-time high of $63,000 and is rallying at values never seen before. And, with prominent companies such as Tesla and PayPal adopting cryptocurrency onto their platform, this will only further encourage consumers to go all-digital with their purchases.
The World Is Slowly Opening Up And Opening Opportunities
From the viewpoint of retail resurgence, we see the world slowly open up and rise from the ashes of strict lockdown measures. And, while we’re far from where we were pre-pandemic, with stores opening up and the government doubling down to support businesses during these trying times, this will encourage more entrepreneurs to catch the next wave going up for the retail industry. Furthermore, as the vaccine rollout continues and more states put a serious effort into vaccinating the people, in due time, we’ll see these efforts pay off as fewer people contract the virus.
- Covid-19 Vaccination Programs: The USA has been on top of its Covid-19 vaccination programs, and this is direct proof of a brighter future lying in wait once the majority of the population is vaccinated and safe from the virus. As more and more people go through the process and manage their incubation period, this will allow consumers to get out of their homes and go back to their normal lifestyles.
- Essential Businesses Are Operational: While most people only look at the store closures, several essential businesses are already operational and open for business, and while this number may be limited as of the moment, it will only increase as time passes. Through the observance of social distancing guidelines, it’s not a stretch to see more businesses open their doors once everybody settles into the new normal appropriately.
- Accessibility Of Physical Branches: Lastly, the appeal of physical branches still exists, and while it fails in comparison with the convenience of online shopping, it still goes head-to-head in terms of accessibility. A large majority of people still prefer physical branches, and whether it’s purchasing a mattress or budgeting for new appliances, nothing beats being the presence of the product itself and having someone guide you.
Verdict: A Looming Uncertainty With Potential For Success
In conclusion, there’s no telling which way it will go because we are facing a large amount of uncertainty when speculating these equally reasonable predictions. What we do know is that the retail industry won’t go without a fight, and we might even see a breakeven as retail stores adopt a fully integrated online platform as well.