Two types of retailers who will thrive post-COVID-19

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Two types of retailers who will thrive post-COVID-19

By Dan Berthiaume - 05/01/2020

We are watching the COVID-19 pandemic throw retail into disarray, but who might come out ahead?

Inevitably, COVID-19 will fade and life (and business) will resume. However, experts generally agree there will be a “new normal” where things won’t quite be the same as they were pre-outbreak. 

Nobody can say for certain exactly how the new normal will affect retail. However, I expect two broad classifications of retailer – mass merchandisers and targeted niche operators – to find themselves especially well-suited for the post-pandemic shopping landscape.

The mass and the niche
Many mass merchandise retailers – such as Walmart, Amazon, Target, and Costco – have seen sales continue to surge during the pandemic. Meanwhile, a number of other retailers – especially in the department store, apparel, and luxury sectors - have struggled. 

Large grocers, drug and convenience retailers and home improvement retailers, as well as a few specialty big-box chains, should also fare well post-pandemic based on their performance during the outbreak. However, retailers that sell products such as clothing, accessories, jewelry, home goods, kitchen appliances, and furniture may discover their customers will continue to visit the omnichannel mass merchandisers who have been dominating these categories during the pandemic once it has passed.

This potential retail homogenization and consolidation will leave a gap for consumers seeking niche products. These could include goods with a specific ethnic or cultural significance, craft items only available from independent suppliers, professional products, rare imports, collectibles, and products requiring a high degree of customization. 

Basically, retailers who please everyone and retailers who only please a select few will find a lot to like in the new normal. There will also be an ancillary group of retail industry participants who benefit from the post-virus paradigm shift – with an important caveat.

E-commerce marketplaces and platforms (who aren’t Amazon and Walmart)
Amazon and Walmart’s third-party online marketplaces are doing and will continue to do just fine, thank you. But niche retailers capitalizing on the new normal may find these platforms’ emphasis on high-volume products and dominance by established brands, as well as possible competitive issues with Amazon, dissuading.

Google, which recently started opening its Google Shopping online marketplace to free product listings, will probably hold some appeal for niche retailers, who are often smaller enterprises. E-commerce platforms like Shopify and BigCommerce, which enable retailers of all sizes to quickly launch online stores, should also pick up business from retailers selling highly specialized products. And of course, eBay and Etsy will continue serving as popular online retail forums for these retailers.
 

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