How the Coronavirus Outbreak has Affected the Inventory of the Retail Industry and How Its Being Dealt with

While the coronavirus outbreak continues to spread, it is now a reality rather than a looming threat for retailers around the world. The manufacturing timelines in Taiwan and China, as well as the transit and delivery timelines of the freight forwarders, are hard hit by the situation. 

The early stages of what has now become a pandemic witnessed Chinese retailers striving to meet the needs of both their workers and their customers. The effect has now trickled down to countries across the globe. With a host of countries stepping up to the same challenge, the phrases ‘out of stock’ and in some cases, ‘stock pile-up’ are common among retailers. 

The Impact

As the majority companies doing business in China grapple with lockdown and quarantines, the supply chain is a rising concern. Coupled with a 21-day lockdown in India, even the stock that is ready with the retailers, is not available for sale. With transportation and e-commerce coming to a halt in the lockdown period, everything seems at standstill. Retailers in various sectors others than essential commodities are bearing the brunt of the current scenario.

The Indian economy, which was already witnessing a slowdown, would find it hard to recover if the situation persists for longer. The impact is not limited to a specific segment, but it is spread across the entire industry and the economy as a whole. What is even worse? The fact that it is expected to last for another 2-3 months before recovery even starts. By end of February itself when the coronavirus panic just broke out in India, the business had dropped 20-25%, according to a Retailers Association of India report.

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Measures to Deal with the Situation

When everything settles and the situation returns to normalcy, there is expected to be a sudden boom in purchase power of customers. If not anything else, retailers must focus on fast-tracking their production at present to meet future demands. The aim is to keep the buffer stock ready at partner factories so that large quantities can be delivered when the situation gets better. That means ensuring that inventory can be quickly shipped to fulfilment centres or stores. 

To substitute the losses, retailers can also increase their resilience by scaling up their existing online offering and, potentially, expanding in-store collection for online orders. Marketing spending should be focused on online as well.

Summing It All Up

While nothing seems in control of retailers right now, they can strategise to overcome the losses when normal market resumes. Of course, many businesses are at stake and a wave of fear runs across everyone. The fear of recession coupled with job loss, huge business losses, stockpile up and uncertainty on curb on the virus, are all taking a toll. The only thing that can be done is re-frame the business strategy and plan for future. 

We are all in this together. The global health emergency better settles soon otherwise our industry and the economy will have to bear losses beyond imagination.While the situation persists, let’s hope the lockdown becomes a success and we are able to successfully curb the impact of novel coronavirus in our country.

(By Mr Nishit Sharma, Founder & CEO, Wings Lifestyle)