Surviving the Retail Apocalypse
Online shopping and a global pandemic have reduced several retail store chains to empty storefronts. But there are still ways for the last stores standing to survive.
COVID-19 And The Economic Slowdown
The World Economic Forum noted that COVID-19 was spreading as early as December of 2019. When it exploded onto the news in early 2020, economic pundits weren't paying it much notice. It was, after all, another virus. Many businesses that had survived the retail apocalypse were now operating sustainably, and it looked like the danger was over. Unfortunately, because of the ease of transmission and how much the sickness's impact was unknown, governments around the world started instituting shutdowns on their populations. In some areas of the globe where the virus mutated into a more deadly strain, people were afraid to even set foot outside for fear of contracting the sickness.
Physical retail outlets that had survived the initial retail apocalypse now struggled to deal with the new limitations imposed upon them by health and government officials. The lockdowns resulted in thousands of businesses having to close their doors, unable to pay staff or meet their obligations. Thousands were left unemployed because of staff cutbacks. Many retail companies operated on thin margins before the pandemic, and the disruption in the supply chain and income rendered them untenable. The damage isn't limited to any geographical region either. The Center for Retail Research in the UK predicts that sales won't regain the same level they were last year until 2022. This lengthy recovery time could spell disaster for many businesses that depend on retail sales to stay afloat.
Evolution of Sales Practices
An old saying notes that necessity is the mother of invention. Retail locations, unable to cope with uncertain lockdown procedures and unsure about the future, found themselves having to adapt in any way they could. As a result, many storefronts moved their business models online. ECommerce is not a brand new field, and it's been around in one form or another since the early 2000s. However, with so few real-world patrons to buy their products, many businesses have shifted their focus to attracting online clientele. Luckily, the infrastructure they need to reach out to consumers already exists in the form of social media. Recent insights have noted that online spending has increased dramatically since the only way some consumers could get goods was via the internet.
The Retail Apocalypse's Impact on Real Estate
The sales apocalypse doesn't only affect businesses. These companies hire workers who, unable to pay their rent, are now facing a grim situation. Some of the most populous commercial hubs in the world are seeing the result of the retail apocalypse through a reduction in real estate values as workers migrate to less expensive areas. Bloomberg notes that 1.4 million people have left New York City between 2010 and 2019. This departure has had a negative impact on the city's rent and property values. Based on the numbers, it may take years, potentially even a decade, for the city to recover from this situation if it even does.
Surviving the Retail Apocalypse
It's not all gloom and doom. Small businesses are in the best position to survive since they don't have to deal with a massive corporate structure. Staying afloat during the retail apocalypse means adapting to a new method of doing business. For businesses that want to weather the storm, several options are immediately apparent to avoid going under along with the other companies that have run afoul of the slowed economy.
When you reopen, a lot of consumers will look at handing over cash as an unsanitary practice. Similarly, credit cards are also carriers for viruses, and consumers aren't so keen on handing them over and getting them back anymore. Contactless payments are a method of transferring money that's quick and easy. Setting up a contactless payment system can make your business more attractive to shoppers once the lockdown is over.
Blend Shopping Experiences
While 2-day shipping is a fantastic innovation, it can't compete with same-day store pickup. If you don't have an online presence just yet, you should try to get one up and running as soon as possible. It's not a challenging prospect to set up a storefront using website design tools. You don't even need to have much. Beginner eCommerce stores typically rely on a few critical pages like a shopping cart and a list of items. Online shopping is the future, and not capitalizing on it could leave your business on the back foot.
Forge Partnerships With Other Entrepreneurs
People, not boards, run small businesses. You can interact with other companies and build partnerships that both companies can take advantage of to market their brand. Building a partnership with another company affords you the chance to reach out to their customers. Maybe their store can serve as a pickup point for your new blended shopping experience and vice versa. Having a bricks-and-mortar business can be expensive considering the additional real estate and land trust costs. But by looking at the positive aspects that can benefit both your online business and their bricks-and-mortar business, you might even be able to grow alongside a former competitor. It's only by banding together can companies truly avoid the looming specter of the retail apocalypse.
Not The End Of The World
Retail isn't dead yet, and it won't be for quite some time. History has shown us that businesses adapt when times get rough. The ones that survive the worst economic times evolve and become stronger because of their hardships. Thanks to technology, there's a much more convenient way to approach a post-COVID world. Contactless payments offer hope for businesses who still want to operate within the real world, and eCommerce provides the infrastructure for those who want to explore remote selling. It may be a while before the world gets back to the old days of retail, but it's not the end of the world just yet. There are ways out for businesses smart enough to seize the opportunities presented to them.
Entrepreneur Leadership Network Contributor