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As the number of coronavirus-infected cases increased globally, many problems for the retail industry have sprung up. Let us have a look on the overall impact of COVID-19 outbreak on Retail
Fremont, CA: With the global coronavirus outbreak in recent weeks, retailers’ top most priority has been the health and safety of their customers and workers. Over several weeks, the virus has arrived in the U.S. as well as in other countries besides China, with 93,000 cases reported worldwide as of March 4, as per the World Health Organization. While many details about the flu-like disease, caused by COVID-19, remain undiscovered, health professionals are still working out to which extend and for how long it might spread.
Let us have a brief look at the adverse effects of Corona outbreak on Retail Industry.
Disruption in Supply Chain
As the virus continued to spread across China, the impact of it has been vivid on supply chains. Many concerns have been mounted in retail industry. Sellers on Amazon marketplace are reportedly facing difficulties to bring goods into the country. Berkley Research group reported that COVID-19 caused multiple factory shutdowns and house-arrested many workers in China, along with hindering travel, reducing both production and product shipment. According to Alphaliner, the virus has left almost 9 percent of container shipping fleets inactive.
The impact of coronavirus in the toy industry, having been accounted for over 80 percent of imports, can be pronounced. S&P Global analysts have reported that the uncertainty of the virus’ effect is beyond for toy companies Mattel and Hasbro, which can disrupt the supply chain.
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Threats to Luxury Market
The luxury market is also reacting to the mass outbreak similarly as the rest of the world- by retreating and shutting things down. The industry’s response to various fashion weeks has marked the impact of this outbreak. Several designers stepped back from Paris Fashion Week, including Chinese brands Calvin Luo, Masha Ma, Shiatzy Chen, Maison Mai, and Uma Wang. In addition to this, many luxury brands have closed store locations in China, including Tapestry, Burberry, Capri, and LVMH, as reported by Coresight Research.
Considering the infectious nature of the virus, people are hesitant about stepping into crowded public spaces. This has been hampering traffic to physical retailers, especially at shopping malls.
Stockpiling of Essential Goods
Mass merchants like Walmart and Target are witnessing rather countervailing effects of the outbreak. While facing supply chain disruption and reduction in casual shopping like other retailers, they are experiencing an increase in grocery and disease-fighting necessities shopping due to consumers’ aggressive stockpiling.
According to Cowen & Co report, Walmart imports 15 percent of its goods from China and Target 30 percent. Being mass merchants, Walmart and Target stores can also be potential vectors of the COVID-19. Walmart addressed the situation by issuing memo to employees enlisting best practices for avoiding the infectious disease.
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