TECH BUYER Mar 2020 - Tech Buyer Presentation - Doc # AP46132720
COVID-19: Impact on China and Asia/Pacific Retail
This IDC Market Presentation discusses the impact of COVID-19, commonly referred to as the coronavirus, on retailers' business landscape in the Asia/Pacific (AP) market. Key takeaways from the presentation include:
- Substantial reduction in footfalls across stores stocking high-ticket categories resulting from rationalization of consumer spends toward food, grocery, essentials, and home and personal care categories
- With discretionary spending at an all-time low, retail segments of fashion, sports, luxury, and premium products have been hit the most as Chinese consumers hold a sizeable stake in such segments
- Online grocery and food retail scaled rapidly to make for the losses in physical retail
- Short-, medium-, and long-term opportunities with possible scenarios are presented to mitigate risks and build a tactical and strategic action plan to navigate through this uncertain period
China has become the biggest retail market in the world today both from a size and influence perspective. The occurrence of COVID-19 during the traditional Chinese New Year period made a big dent in terms of its collective impact on the retail segment. With increased pressures of significantly reduced footfall generation and increased social isolation, omni-channel commerce for retailers, which retailers wished to have to become the must-have framework for retail of organizations of all sizes as traditional channel of stores have become the biggest casualty, has now gone from being a sophisticated model. COVID-19 has essentially reinforced IDC's take on the need to build partner networks with tactical and strategic ecosystem partnerships to drive revenues, to deliver customer experience (CX) through contextual awareness, and to deliver on the customer moments of search, discovery, and actual purchase through online engagement and facilitation.
Going forward, retailers will have to prioritize mobile engagement, assortment rationalization, and cashier-less checkout building omni-channel commerce, order management, and customer support in the short to medium-term while building efficiencies in areas of robotic workforce, headless commerce, and augmented reality (AR)–based product discovery and customer engagement in the long term.