See the vXchnge Difference at Our National Colocation Data Centers

Schedule a Tour

How the Retail Industry Will Rebound from COVID-19

By: Ernest Sampera on June 19, 2020

It became quite clear in the early days of the COVID-19 pandemic that the retail industry would experience severe disruption. While many companies had the digital infrastructure in place to adapt quickly, others have been caught completely off-guard. As the retail industry slowly develops a new path forward, investments in technology and innovative customer experiences will become vital for sustainable success.

How COVID-19 Impacted the Retail Industry

April of 2020 provided retailers with the first full month of data on how the COVID-19 crisis would impact the industry as a whole. According to figures provided by the National Retail Federation, that impact was quite severe. Retail sales were down almost nine percent compared to April of 2019, despite the boost in eCommerce sales. The decline hit a broad range of industries, and future projections remain cloudy due to so much uncertainty in the economy.

Forward-thinking retailers, however, are already considering how they can ride out these short term challenges and position their operations to thrive in a post-lockdown environment. States have allowed many businesses to open back up, but companies may quickly discover that they can’t simply return to their pre-COVID-19 way of operating and hope to enjoy the same success. They will need to implement serious changes if they want to remain competitive in both the short-term and the long-term.

5 Changes in Retail We Can Expect to See After COVID-19

1. Touchless Automation

Just because stores are fully reopened doesn’t mean that customers are going to come flocking back. Many people remain justifiably concerned about the ongoing risks of COVID-19, especially in areas of the country that are seeing an increase in cases. Retailers are doing what they can to improve safety and social distancing, but one technology solution that many of them will embrace is touchless automation. Whether it’s point-of-sale technology that allows transactions to be completed without any contact between individuals or improved shipping and receiving processes that eliminate paperwork and other manual processes, many companies will be investing in new tools and procedures that minimize the risk of coronavirus transmission. According to one study, 87 percent of shoppers reported they would prefer to go to stores that offered touchless checkout options. Stores like the recently-opened Amazon Go Grocery could quickly become the new normal in the years to come.

2. Increased Omnichannel Presence

The COVID-19 crisis has already seen an explosive increase in eCommerce sales. According to Adobe’s Digital Economy Index, US eCommerce increased by 49 percent in the month of April, with online grocery stores increasing daily sales by 110 percent. While the reopening of physical stores will surely cut into those impressive numbers, past trends have demonstrated that eCommerce growth tends to be very sticky when it comes to consumer habits. That means online sales are unlikely to fall back to their pre-pandemic numbers. Retailers will need to invest heavily in an omnichannel strategy that allows customers to find them and make purchases in whatever way is most convenient for them. That could mean strengthening website functionality, rolling out new mobile applications, developing innovative Internet of Things (IoT) devices, or integrating augmented reality (AR) into the “brick and mortar” customer experience. With so many options available to customers, providing a truly frictionless experience will become a competitive advantage.

3. Brand Disruption

Building strong brand loyalty is one of the overriding goals of most retailers, but product shortages due to the COVID-19 pandemic have gone a long way toward disrupting those loyalties. According to a study by AlixPartners, 65 percent of consumers have tried new food brands at some point during the crisis, with as many as 45 percent of those people saying they would stick with the new brand. While this may be a major cause for concern when it comes to established brands, it’s also an unprecedented opportunity for many smaller competitors. Product shortages are causing customers to consider alternatives more than ever, so it’s critical for small to medium businesses to have the infrastructure in place to rapidly meet that demand.

4. Unique Store Experiences

With more people buying online and traditional retail experiences unable to meet social distancing guidelines, retailers are under a great deal of pressure to find ways to entice people back to their physical store locations. The enduring advantage of these stores is their ability to offer a shopping experience that simply can’t be matched by an online retailer. Unfortunately, few companies embrace this potential and instead cling to outdated models of what a “brick and mortar” store should be. With exciting new technology like AR, cloud computing, and big data analytics, retailers can provide a much more customized and unique shopping experience that will keep customers coming back. These experiences can also be designed from the ground up with health risks in mind, designing services and environments that minimize the threat of coronavirus while still allowing people to enjoy innovative retail experiences.

5. Supply Chain Resilience

The retail industry was hit hard by supply chain disruption in the early months of the COVID-19 pandemic. While distribution channels have improved in the time since then as more countries have gotten a handle on the public health crisis, many companies will still find it worthwhile to consider how they can strengthen their supply chains to avoid similar problems in the future. That could include locating some production and distribution closer to the end market, or increasing flexibility by identifying alternative suppliers rather than relying solely on a handful of vendors.

How to Prepare Your Retail Business for Success After COVID-19

Most of the solutions available to retailers will require them to make substantial investments in their technology infrastructure. Improved network reliability, stronger data security, and scalable computing power will be essential to their continued success. That’s why colocation data centers will play such an important role in the retail industry. Companies are going to need the efficient power infrastructure and connectivity of these facilities to build the IT systems that can scale to meet growing customer demand. With direct on-ramp cloud availability, data centers can provide companies with the scalability they need to right-size their networks and applications without exceeding their budgets or sacrificing control and visibility.

With multiple data center locations across the US, vXchnge is well-positioned to deliver a variety of colocation services to the retail industry. Our facilities are engineered for perfection and backed by 100% uptime SLAs. And thanks to our award-winning in\site intelligent monitoring platform, customers can manage every aspect of their location without having to set foot within the data center. To learn more about how vXchnge’s innovative colocation services can help your retail company overcome the challenges of COVID-19, talk to one of our data center experts today.

Hi there! Speak to an Expert About Your Company's Specific Data Center Needs