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Emerging from COVID-19

COVID-19 is likely to result in a delayed “rebound” following a relaxation of restrictions. Retailers need to make preparations for this eventuality across several areas including staff training, ecommerce infrastructure, and in store activities such as cleaning.

As COVID-19 continues to disrupt businesses and economies around the world, many countries are several months into their various levels of physical and economic lockdown. Retailers are now grappling with the uncertainty around economies reopening for business, and how best to navigate those waters when they do. Many executives and economic pundits are looking to China as a way of peering into the future to understand what life might be like as cities and countries do relax social distancing restrictions, and the data is suggesting a delayed rebound. This blog lays out the case for a delayed retail rebound, and how businesses can position themselves to respond if this is the case.

Delayed Retail Rebound in China

China began relaxing its restrictions in April 2020, with people heading back to work in an effort to restart the economy following an apparent flattening of the COVID-19 curve. The figure below provided by TomTom gives an indication of traffic congestion in the last 7 days (red line) compared with the average congestion for the same time in 2019 (dotted blue line). There is no doubt that activity has restarted during the week, and it is fascinating to note that the activity at the weekends and public holidays (Monday and Tuesday of the week shown fall on labour day holidays in China) is still significantly down on 2019.

What does the above tell us about the activities of consumers upon restrictions being lifted? It appears to be saying that consumers in China are not yet interested in being out and about during their free time, indicating a strong and potentially worrisome shift in consumer behaviour.

Is this a harbinger for consumer behaviour in the western world? With no way to know for sure, we suggest that retailers put some time into the following areas in preparation.

Prepare for Sustained High Ecommerce Traffic

A corollary to a delayed retail rebound is a sustained increase in ecommerce traffic. This makes sense if we assume that consumer behaviour is changed for at least the short to medium term. Businesses with the luxury of shifting resources to their ecommerce channel following store closures have no doubt already done so, and we think that these resources should remain in place and then some.

McKinsey and Company released some intriguing retail survey results indicating the same, with respondents across all surveyed areas expecting a sustained 6-13% increase in ecommerce levels (compared to pre-COVID-19).

Our recommendations for retailers to prepare for this are:

Prepare for a Change in Operating Model

COVID-19 and the various government responses have had a profound impact on consumer behaviour. This is likely to affect the way they interact with a retail store once they again have the option to.


One thing is for sure, cleanliness will be front and centre. The unprecedented demand for soap, hand sanitiser, and cleaning products aside, the transmissibility of COVID-19 we have witnessed is a strong indication that consumers will be unwilling to touch anything in public that has not been thoroughly cleaned.

Our recommendation: retailers should prepare for increased cleaning in stores, as well as PPE for staff.

Store Operations: