Hughes Enterprises

The Impact of Coronavirus on the Retail Landscape

cashier at retail store standing at register, wearing a face mask

The coronavirus has changed everything, but there’s no need to feel BOXed in. Let’s look at how the landscape has changed markedly for retailers—and how “go to market” strategy has been upended by the pandemic. Those that previously had a sound and thoughtful e-commerce strategy—or acted swiftly—have seen their business skyrocket, while those that relied heavily on in-store foot traffic have been perilously affected.

Packaging supplies are now in high demand and short supply, including corrugated boxes, mailer envelopes, and interior protective packaging materials. The supply chain is stretched to capacity and prices are escalating. Consumers of these packaging materials now need to plan ahead as they can no longer rely on overnight delivery. Because distributors (unlike packaging manufacturers) typically keep ample product on their floor, they can help keep supply chain flowing… even when e-commerce’s demand for packaging is so high.

The recent crescendo of e-commerce has been a decade in the making. According to Census.gov, e-commerce sales in 2010 were $169 billion and grew each year to a record $595.5 billion in 2019. But in the first half of 2020, e-commerce sales have swelled to $371.9 billion: an impressive 30% increase from the first half of 2019. The e-commerce market of total retail sales has grown to 16.1%.

Why has the online space blossomed so considerably? Pre-pandemic reasons included:

  1. Being able to easily compare prices
  2. Ability to shop at all hours of the day
  3. Readily available ratings and reviews
  4. Easy to perform online market research

Now that safety concerns over contracting the virus are a factor in retail stores, digital volume has accelerated to unprecedented levels.

The COVID-19 pandemic will surely not be with us forever, so some may ask if this trend might change. We simply do not see this reversing. The consumer has gotten used to the convenience of at-home delivery, and retailers have gotten significantly better at getting product to them faster. Large retailers with a nationwide footprint of physical locations have adapted to a “Ship-from-Store” model, enabling both quicker delivery and reduced freight costs.

As those of us at Hughes Enterprises interact with major retail chains across the United States, we hear a common refrain: what was once considered a 5-year strategic plan to shift to an online and home delivery strategy has been accelerated to six months. The pace of change may have been a reactive response, but now companies are finding success with this model. Because of how greatly e-commerce affects supply chain, to adapt to the future, companies who rely on packaging supplies must think ahead, plan with precision, be proactive about their inventory, and communicate with distributors to understand lead times.

That’s a WRAP on this year. (Another packaging pun, for your enjoyment.) Stay safe and be well!

Contact our specialists here at Hughes Enterprises today and find out how we can help with your packaging and shipping processes.

Request a Quote

Get pricing information and strategic guidance from the experienced team at Hughes Enterprises.

What are you looking for?