The retail industry globally faces significant challenges as a result of the combination of the Coronavirus (COVID-19) pandemic, low oil prices and existing economic problems. This report lays out Euromonitor’s phases of retail evolution due to COVID-19 and offers snapshots of how retail will be affected in each region. It will also consider the major trends emerging from these shifts, including the growth of e-commerce and role of digital intermediaries.
The COVID-19 pandemic will negatively impact the retail industry globally in 2020 and 2021. The pandemic required the temporary closure of many stores, weakened consumer demand and increased the costs for many retailers.
Beyond the direct effects of the pandemic itself, retailers in many emerging markets are contending with the negative effects of low oil prices on consumer spending. Low oil prices are due to several factors, but travel limitations imposed by governments are one drag on the demand for oil.
Consumers have increasingly turned to e-commerce during the pandemic, with the greatest gains in e-commerce penetration rates coming from markets that already had relatively high levels of e-commerce sales. South Korea and China in particular will record strong increases. E-commerce intermediaries, including marketplaces, delivery platforms, and social media and messaging services, play a particularly important role in e-commerce’s 2020 growth.
The trajectory of the pandemic will largely determine each market’s retail recovery, with markets with the lowest levels of cases generally showing the most rapid recoveries. Recovery is also likely to be uneven, with certain channels recovering much more rapidly than others. In general, specialist retailers and department stores face the longest recoveries.
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