Challenges Faced By the Retail Industry Amid Covid-19 in 2021
With the spread of the Coronavirus throughout the entire globe, the retail commerce as we know it is not the same anymore. Human lives have undergone changes, changes that will stay in practice indefinitely and signs of reverting back to the old ways are non-existent like the innumerable things that have become obsolete with the pandemic. Likewise, the retail industry during covid in the year 2021 has faced similar consequences. For the better part of last year and almost the entirety of this annum so far, the challenges faced by the retail based industries, large distributors, retail trade in most parts of the world have forced it to go on an indefinite hiatus or adopt strict measures in store regulation. This transitional phase is a process in motion and it is yet to reach its equilibrium. Still unsure of what the future holds for this sector, one thing is certain – this phase has serious implications and very little time to come up with a solution. Utmost vigilance and advanced research among many other things can turn this situation around. Therefore, we must act reminding ourselves that time is of the essence.
Here, we will talk about the impacts the pandemic has had on the industry and chart out the ways we can prevent further dissolution.
Aftermath of the Pandemic
Countries gravely stricken by the outbreak of covid have seen a total decline in the operations of their retail industry. All kinds of stores apart from the ones selling the bare necessities like grocery and medicine have shut their doors and stopped all of their operations. Due to the inaccessibility of the market, production have gradually decreased until it was completely stopped. If there is no one to buy goods, what use is there in making them?
This didn’t happen overnight. It started with the awareness of the virus and its mechanism. People started becoming scared of going outside. Then with the restrictions and regulations imposed by the governments to prevent outbreaks, the markets came to a standstill. These restrictions severely hurt the economy, and with each passing day, rate of losses started rising exponentially. To save the economy, governments tried out drastic measures like allowing stores to open up for business in a controlled manner. However, by this time the fear had spread and alternative means started popping up. A vacuum had formed in the wake of the pandemic and it needed to be filled. In came the e-commerce firms who were selling convenience along with its promise of reducing contamination. Simultaneously, sensing the adverse situation the retail stores were in, people started to take advantage by forcing retail stores to reduce their price. The stores had no other way to compete with the growing number of e-commerce sites but to abide by the demands of the customers.
Financing Retail businesses amid the pandemic
With the depletion of cash reserves, the businessmen needed to find preventive measures and or ways to tackle this wave of economic downfall. The necessity of fiat money was now more than ever and businesses were required to look ahead and measure every step to survive. Either this, or they had to file for bankruptcy. With the stock market undergoing turbulent weather, retail store owners were losing faith and they started opting for government assistance and/or shadow banking services to stay afloat. This created a huge shift in the economic spectrum, and much worse than the magnitude of the shift is its unpredictability.
Long-Term Implications in the Supply Chain
With nations closing their borders to other countries, the ancient system of international trade seemed to face impending catastrophe. On top of that, we have to remember that production in the respective countries were already at a major decline. Subsequently, this created severe shortages throughout the world. The countries that tried to deal with both the pandemic and the economy together were by this point seeing red. Shortages of medical supply and equipment were also high and the world started to suffer irreparable loss not only in terms of finance but now in terms of human lives. Manpower to drive production or supply wasn’t sufficient anymore.
Grocery stores and pharmacies started to see stock outs as panic-buying hit an all time high. The rich planned to hoard as much goods as possible to stay cooped up in their houses which disrupted the system of inventory warehousing as well. The green zones by this point had recovered and they got to enjoy a little freedom outside the houses, which meant businesses could now be revived. The yellow zones also saw activity in their markets albeit in a controlled manner compared to the green and the red zones were all over the place. To save the economy, they were losing valuable lives, and to save lives they were losing the economy, which in turn, was claiming more lives. All this was directly hampering the retail stores and their sustainability, which led to a wide scale of dissolution of businesses.
Potential Ways to revive the retail economy
To save the drowning ship that is the global economy, drastic measures need to be adopted. A unified endeavor is the only way to resuscitate the financial predicament. The countries that are currently solvent can come forward to help the ones lagging behind. With the distribution of large amounts of foreign aid to the countries in dire straits, the economy will get the chance to take in some sustenance which can fuel the recovery and speed up the process. Some countries have tried the method of injecting monies into its economy taking up large portions from their foreign reserves. Then there is the option of requesting the services of shadow banking corporations, which normally assist in securing and managing capital. Retail store businesses can also deal in equity by the ancient method of exchange.
There is scope for wide-scale research on the retail industry and how it can be saved from the ongoing surge of economic chaos. Not only is research an option, but it is probably the only way out for retail stores all across the world that have suffered in these most precarious times.