The Biggest Issues for Retailers in the Current Landscape

Power Retail By Power Retail | 31 Mar 2020

It’s no secret that Australian retail is experiencing a series of changes. As each day passes, more closures are announced and further confusion ensues. We sat down with Mark Lewis, CEO of Netalico Commerce, to discuss maintaining a healthy business structure during the challenging times ahead. 

There are constant changes throughout the year for retailers. From Christmas to Easter, there are a series of categories that reach a peak and nadir across the seasonal trends. However, these trends have been thrown out the window with the outbreak of COVID-19.

There have been significant shifts in consumer behaviour in the last few weeks, which has severely impacted specific retail categories. “We’ve seen huge shifts in revenue, with sales both increasing and decreasing, to no change at all for our e-commerce clients,” Lewis tells Power Retail.

During the outbreak, there have been significant peaks and troughs in particular categories. “Industries that tend to support more people staying home, such as home workout gear, cooking tools, and work-from-home software tools are seeing sales increase up to 3x,” Lewis explains. “Bidets are also incredibly popular, crazily enough, due to the man-made shortage of toilet paper. Industries like apparel and luggage that do well when people are out and travelling are down up to 60 percent.”

While these categories continue to dominate, there are obvious issues for distributors and trade partners. Due to shortages of staff, international warehouses shutting down and restrictions on logistics, retailers may experience problems in the long term, despite the ramping up of sales. “On the operations side, e-commerce merchants may be struggling with fulfilment as their warehouse staff call in sick, or find themselves needing to have a sale to move inventory, or see a surge of sales with fewer staff members and as many people as possible working from home,” Lewis says.

So, if there are more Australian staying home and relying on e-commerce for their everyday essentials, does this mean that online retail will experience an increase in popularity? “I definitely hope so!” says Lewis. “The effects of COVID-19 are twofold on e-commerce: first, more people are staying home and shopping online, which is definitely a positive for e-commerce and shows retailers the importance of selling through multiple channels.”

“But people are also losing their jobs, uncertain about the future, shopping less impulsively, and overall spending less,” Lewis says. “Essential products like milk may never be sold direct-to-consumer online (at least that we can foresee now!), but if this cultural change we’ve seen of moving more online holds steady, e-commerce will absolutely continue to grow.”

How about those businesses that are saying they’re running ‘business as usual’? As with everything, it’s not always that simple. “It may seem like business as usual on the face of a website, but there are still people running the website, implementing a marketing strategy, fulfilling orders, and making deliveries,” Lewis tells Power Retail. Ultimately, there are restrictions for the retailers who continue to run the online businesses – this isn’t just for those who work in the office. “As work shifts online, e-commerce stores may be working with an all-remote office team and not see much change, but many are having to get used to working fully remote while dealing with changes that have completely derailed their business strategy. Warehouse workers will call in sick, deliveries may be delayed, supply chains may be disrupted, and budgets will change.”

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