How Retailers Can Prepare for a Rebound Amid COVID-19


The disruption caused by COVID-19 comes at a time of intense change for the retail industry. Retail stores worldwide are facing closures and serious decline in their sales. Managing these evolving complications is more than a full-time job, but at the same time retailers cannot lose sight of their day-to-day operations. It is still unclear how the outbreak might reshape the industry. However, examining the paths of retail’s recovery in three previous crises can point to what might lie ahead for the industry.

Retail Recovery in Previous Asian Crises

Taking reference to the SARS outbreak in 2003, Fukushima tsunami disaster in 2011 and the MERS epidemic in 2015, there were three phases: shock, recovery and stabilization.

Source: China National Bureau of Statistics; Japan Ministry of Economy, Trade and Industry; South Korea government statistics

A month after the spread of SARS ended in May 2003, Chinese sales had bounced back to their pre-epidemic levels and they stabilized by July. The retail sales dip was much more pronounced in Japan in 2011, so as the subsequent recovery; the stabilization period was also longer than in China after SARS. In South Korea, though, the rapid recovery from MERS in 2015 took retail sales level beyond its pre-crisis trend, as it coincided with the Mid-Autumn Festival. The market then eventually returned to a stabilized level.

Although the timing and recovery pattern of each case differ, retail markets eventually stabilized after the crisis. Retailers therefore can expect the industry to rebound after the pandemic subsides. A survey commissioned by MomentFeed and Zogby Analytics shows that consumers are indeed willing to support local retail businesses once the disease subsides.

Source: MomentFeed Commissioned survey with Zogby Analytics, Question: Once you no longer feel concerned about COVID-19 how often do you plan to visit the following types of local businesses (compared to your pre-COVID-19 routines)?

  • 91 percent of consumers indicate they will visit restaurants, movie theaters, gyms, salons, stores, and banks, once concerns about contracting the disease subside, and 32 percent indicate they will visit more frequently than before COVID-19.

  • Dine-in restaurants will likely see a quick resurgence of traffic, with 39 percent of respondents saying they plan to visit restaurants more than before COVID-19.

  • Grocery stores will also see a resurgence, with 35 percent of respondents reporting they will visit more frequently than before COVID-19.

  • Entertainment (theaters, arcades, etc.) and retailers should also see strong support, with one-third of respondents indicating they will visit more than before pre-COVID-19.

  • Gyms on the other hand, might see fewer one-time visitors than before COVID-19, but survey respondents were more likely to say they will visit “more often than ever before” when compared to other industries.

Strategic Implications for Different Types of Retailers

Different types of retailers then can learn from the past emergencies in Asia to help them plan for an eventual recovery in demand.


Ecosystem players are unlikely to suffer long-term damage from the coronavirus outbreak. These are digital natives that have built one-stop online shops including retailing, chat, entertainment, payments and a host of other services. Ecosystem players have also suffered substantial short-term disruption to trading. However, the inevitable shift to online means the strategic challenge for ecosystem players is likely to remain manageable: maintaining service levels results in continuous business growth.


Dynamic traditional retailers with a significant national or international presence (scale fighters) are financially well placed to withstand the short-term coronavirus disruption. The breadth of their supplier network is likely to emerge as a strength, enabling them to get around some of the emerging bottlenecks, and they tend to have a significant enough online presence to withstand the temporary drop in brick-and-mortar sales. Yet their scale can also be a source of weakness; the long supply chain makes the change management much harder, whether that be the logistical challenge posed by a crisis or a shift in consumer tastes after a crisis.


Regional retail chains do not have the same capacity to absorb financial shocks as scale fighters. If they do not have an exceptionally good regional supplier base, they could also be more prone to supply bottlenecks. Yet, the local presence and relationships built up by the sector’s strongest regional players also has the potential to be an asset, particularly if they show empathy and social engagement with their communities.


The challenges posed by the outbreak are even more pronounced for retail laggards: stores that have struggled to adapt to the rise of digital transformations and other market changes over recent years. Laggards have a high focus on physical store traffic, and are often financially fragile, making them prone to cash flow volatility. Even so, they can make use of their physical stores to reconnect with old customers who might have been taking their continued presence for granted.


For all types of retailers, trust will be vital now and for the foreseeable future. As customers struggle with the aftermath of COVID-19, they’ll put their faith in retailers to keep them safe and hold up their side of the bargain: having the items they need in stock, setting reasonable prices (resisting the temptation to increase your margins on in-demand goods), and providing a consistent level of service. It will be easier to recover if retailers can act more quickly on market insights, which means creating a faster feedback loop. More immediate, actionable demand signals will enable retailers to see at a local level how specific customer segments are behaving and how their attitudes and behaviors are evolving.

Cyclops is a retail analytics system that can help retailers generate insights into how their customers shop inside their stores. To understand more about how Cyclops can help retailers digitally transform their stores amid the COVID-19 pandemic, visit our website: https://dayta.ai

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