Retail industry struggles to survive during the pandemic

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Daniel Case | Wikimedia Commons

Gabriel Rivera

With non-essential businesses across the country being forced to close to prevent the spread of COVID-19, there has been a massive surge in online shopping. Several retailers that heavily depend on in-person transactions have seen sales plummet in recent weeks and are now utilizing digital channels as a last resort to accrue revenue.

Although this mandated shift has given hope to a multitude of businesses trying to stay afloat in a bleak and tumultuous economy, it has created issues for both them and consumers alike.

For retailers that have traditionally relied on sales at their physical location, the forced transition has not been simple. Automobiles, for example, are both commodities commonly purchased in-person at a showroom or dealership. With these locations forced to close their doors, there has been a sharp decrease in auto sales, according to CNN Business.

Several smaller dealerships and automakers never had a digital platform for customers to purchase their products prior to the outbreak, making the scramble to launch an online presence now more difficult. Some of the leading car manufacturers, however, such as Ford Motor Co., Toyota Motor Corp. and General Motors Co., have had their products available online for their customers to purchase and have witnessed an uptick in digital sales.

“GM’s program, called ‘Shop. Click. Drive.’ has been around since 2013, but has recently experienced two to four times the usual amount of user traffic, according to the automaker,” said Peter Valdes-Depena of CNN Business. “GM’s Cadillac luxury division also recently introduced Cadillac Live, a website where shoppers can watch live presentations of the brand’s cars and SUVs in real time.”

These automakers have also reached out to the smaller dealerships and showrooms in need of a new way to sell their inventory online. Dealerships partnered with the automakers have been given the option to utilize these automakers’ online platform to make sales. Fiat Chrysler and Ford have both announced that nearly all of the smaller dealerships they are partnered with chose to use their platforms to sell.

While this significantly helps many smaller dealerships across the country struggling during the pandemic, all businesses in the auto industry are feeling the negative effects of stay-at-home orders. Without in-person sales, these businesses, like so many others in the retail industry, are helplessly relying on online transactions to survive.

Even for businesses that made a considerable amount of revenue from online sales prior to the pandemic, the deprival of transactions at their physical locations has left them struggling. This profit loss has been felt in the clothing industry. Several brands, including Adidas AG, Nike Inc. and Nordstrom Inc., have marked down many of their products and waived shipping costs in order to increase traffic and sales through their online platforms.

The companies within the clothing industry struggling the most from the pandemic and the shift to e-commerce are smaller businesses that lack financial stability. “Some companies, including New York’s Noah, Standard & Strange in Oakland and Union in Los Angeles, have posted lengthy Instagram appeals about why it’s critical to support a small business in these economically precarious times,” wrote Jacob Gallagher of The Wall Street Journal.

Consumers, however, appear to be reluctant to spend their money on clothing now due to the ongoing COVID-19 virus outbreak. With so much uncertainty around when the pandemic will end and the unemployment rate continuing to grow, many appear to be saving their money to remain financially secure for the unclear future.

For consumers that do have extra funds to spare, deciding where to spend that money through online shopping has been a difficult decision. “Online shopping in a pandemic feels like a constant ethical dilemma,” wrote Shira Ovide in The New York Times. While consumers are being told to support small businesses through these tumultuous times by shopping online, some fear that doing so would be a risky endeavor. Consumers have become wary of purchasing online because they are either concerned about jeopardizing the health of the worker who has to deliver their order or they are worried about contracting the virus from a package.

“The basic idea is to think,” wrote Ovide. “Think about whether the company you’re buying from needs the business, and how many people involved in the purchase might be in harm’s way. Think about whether what you’re buying can wait for more normal times. And keep thinking about our personal responsibility as shoppers when this crisis subsides.”

Although these struggles will linger while non-essential businesses remain closed, companies are hopeful that consumers will continue to support them and provide hope for a future after the pandemic.