A Year in Review: How Retailers are Adapting to Pandemic-Driven Changes in 2021

year-in-review-retailers-pandemic-driven-changes-2021 - IMA

By Tompkins Solutions

It’s no secret that the retail industry was already suffering before COVID-19 swept across America, but government restrictions including stay-at-home orders and the closing of nonessential businesses pushed many retailers to their limits. More than 12,000 retail stores in the U.S. closed in 2020, up from 10,000 in 2019, according to commercial real estate firm CoStar Group. As more brick-and-mortar stores closed their doors, more consumers were shopping online, with U.S. e-commerce sales totaling $791.7 billion in 2020, a 32.4% increase over 2019, according to the U.S. Census Bureau.

Now that one year has passed since COVID-19 restrictions hit most of America, how have retailers adapted to the shift in shopping habits and record-breaking store closures? Here are just a few of the major changes retailers faced over the last year:

Transforming distribution operations for direct-to-consumer shipping 

As more customers began shopping online, retailers had to quickly modify their distribution operations to support the change in order profile and volume. Instead of shipping pallets of products to a network of stores, retailers were now having to deliver individual orders directly to customers.

Overcoming additional obstacles during the holidays 

One thing COVID-19 didn’t deter was holiday spending, with U.S. online sales during the holiday season up 32% over the same period the previous year, according to Adobe Analytics. To avoid putting more pressure on already strained warehouses, many retailers started holiday sales as early as October last year. Retailers also hit shipping roadblocks when carriers began instituting peak surcharges and volume caps, prompting many retailers to explore other last-mile delivery services and offer free in-store and curbside pickup to avoid delays and keep customers happy. 

Utilizing brick-and-mortar footprint for micro-fulfillment

In addition to offering in-store pickup services such as buy online pick up in store (BOPIS) and curbside pickup, retailers also leveraged their existing brick-and-mortar infrastructure to implement ship-from-store fulfillment. Utilizing these locations to fulfill online orders enabled retailers to reduce delivery times and costs and ensure an optimal customer experience.

Check out our other resources to learn more about how retailers are shifting operations in the face of disruption.