With most stores and restaurants closed and trips canceled, the food, retail, and airline industry have almost come to a complete halt. Other industries like hospitality and fashion are also suffering. All of this is a result of the coronavirus.
Retail
No one knows when the economy will be back and running. A terrifying thought, but a realistic one. According to the Nation Retail Federation, retail makes up $2.6 trillion of the U.S. economy, approximately 25%. Retail is also responsible for providing 52 million jobs, as well.
Several popular retailers like Macy’s Nordstrom, Nike, and Apple have closed their businesses. The country’s largest mall operator, Simon, closed over 200 shopping centers. Such retailers like apparel merchants and department stores are taking the biggest hit.
To try to predict a post-pandemic retail world, we can compare it to other big impacts that affected the economy. After 9/11, it took consumers six weeks to shop. After the 2008 crash, it took six months. Coronavirus is the first of its kind to have this effect so it’s hard to predict a possible outcome. A comeback is dependent on the government and what they’re doing to flatten the curve.
Even once life resumes to normal, retailers will still have problems with paying loans and rents. The supply chain will also be impacted. If there is an excess of product, it’s expected the retailer will cancel orders with manufacturers. The cycle will continue to affect the supply chain.
A possible solution is online shopping, as there’s been an increase. Online shopping has increased by 58% as reported by Red Points. This could have a long-lasting impact on e-commerce and could be the new norm in a post-pandemic world.
Hospitality
The hotel industry has already lost $1.4 billion a week. And it’s not predicted to recover so quickly in a post-pandemic world. There will be a constant fear due to coronavirus and regulations that prevent public gatherings. This could be worse than after 9/11. Then, people still traveled as long as they were close to home. But with coronavirus and social distancing orders, the impact could be far greater.
Hotels seem to understand this because on March 17th they asked the Trump Administration for $150 billion in aid. Hyatt reported an increase in cancellations and slower business travel. Marriott has furlough thousands of its workers.
After 9/11, the hospitality industry recovered quite quickly. But when compared to the SARS breakout in Toronto and the Zika outbreak in Miami, it took 14 to 25 months for recovery. But Chinese hotels had fully recovered from the SARS outbreak in March 2003 and recovered by later that summer in July. It may be dim, but there is hope at the end of the tunnel.
Food Industry
For most of the food industry, changed happened overnight. While grocery stores struggle to meet demand, other food providers transformed their business into a drive-thru or pick up. But not all have that ability.
With governments requiring sit down restaurants to close, local restaurants and diners will suffer. With rent and labor cost still in demand and no income, they will struggle. This impact will determine how local restaurants will survive across our nation.
This gives online grocery shopping the spotlight. There was an explosion in downloads for applications like Instacart, Walmart’s grocery app, and Shipit. This is how consumers adapted in order to obtain their groceries.
Another outcome hits national service chains. They have the funds and resources to outlast the pandemic for a bit. This could lead to evaluations of what locations are most successful and which ones need to be shutdown.
Fashion
Retailers being shut down directly affects the fashion industry. Many are resorting to online shopping. And this will still have a severe impact on their supply chains.
According to the World Trade Organization, over 37% of the world’s textile exports originate from China. Italy is a global center of luxury manufacturing. Both of these countries have shutdown which means little to no production.
Fashion is dependent on interaction and collaboration. With social distancing measures in place, this makes it nearly impossible. And with social gatherings canceled and communication turning online now, there is no need for a new spring wardrobe.
But there is hope that people will desire to wear other something than loungewear and pajamas. Once that desire hits, it could trigger production. This could benefit local manufacturers since there will be a need to diversify and avoid international trade wars.
As the saying goes, “When there’s life, there will be fashion.”
Coronavirus is making a negative impact now and could be in a future post-pandemic world, but there is hope. Hope for recovery. Hope for change. Hope for stability. If you can’t see that light at the end of the tunnel, let us shine a light for you! Contact us here for all your social media digital marketing needs.
