In the past few weeks, the coronavirus outbreak has impacted every country across the globe. With around 99,050 active coronavirus cases in the world, the retail industry is suffering significantly. From Macy’s to Louis Vuitton, several retail giants are being forced to shut down their operations in multiple locations. All this because of the increasing coronavirus outburst and reducing workforce.
Coronavirus is a potentially lethal respiratory disease that started in Wuhan, China. The ramifications of the coronavirus disease are now being experienced everywhere. Let’s see how it is impacting these five retail industries.
In an attempt to starve coronavirus, retailers have halted business in China as well as other countries. Internationally, this retailer shutdown is progressing towards supply chain fallout. Due to this deadly outbreak, the world economy is at stake, according to the latest Monetary-Policy Report.
Here’s how various industries are being influenced by the coronavirus outbreak.
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Toy Industry
Recently, CNN business reported that Baby Yoda toys from Hasbro are being impacted by the coronavirus scare. Due to the travel bans and quarantine impositions, it has become harder for the workers to gather toys.
In fact, this may not be the first batch that is facing a threat. If the situation doesn’t improve until June and/or July, the industry may observe a shortage. There is already a decline in the output by 5%-10% because of the virus.
Electronics
With fresh cases of coronavirus in China, the fear of COVID becoming a global pandemic also is increasing. This is not only influencing business situations across China but also in other countries.
For instance, India depends on imports from the Eastern parts, and Hubei, of China. However, as these provinces are experiencing a shutdown, electronics production, which depends on imports, is experiencing a nearing halt.
Experts believe that electronic products will observe a rise in price by 20%-30%; an issue that will continue to increase at least for the next three to six months.
Aircraft Parts Suppliers
As a result of the epidemic, Boeing Co. recently revealed that coronavirus is set to cripple its aircraft supply in the first quarter of the new year. It has also been revealed that Boeing has not received any orders for new aircraft in January. It has only delivered 12 aircraft in the first month of the year.
In January and February, around 85,000 flights within, from, and to China have been cancelled. This has halted service and decreased demand.
Auto Part Suppliers
Auto part suppliers are being affected by the coronavirus outbreak as well. The automotive suppliers have revealed that they are facing a shortage of several parts that are used in multiple North American factories. This shortage can cause a halt in the work of manufacturers. To remedy the situation, multiple companies such as Toyota Motor Corp.’s suppliers have started using flights to ship auto parts.
Apparel
Undoubtedly, China is one of the biggest producers of fashion products. Hence, a lot of giants rely on production from China for their retail outlets.
The COVID outbreak has nearly stopped the production, impacting retail businesses all across the globe. Even the organizations that prepare garments outside China depend on the country for trims and fabrics. With Chinese factories being shut down due to the outbreak, the apparel industry is experiencing a downturn everywhere else.
Popular Retailers Facing A Decline Due To Coronavirus
Macy’s
Macy’s recently expressed concern about the slowdown in sales because of reduced tourism. As fewer Asians visit the US, the sales have dropped. They further noted that 70 of their stores have a prominent Asian user base, which may impact sales.
Apple
iPhone, manufactured by Apple, is experiencing a major downturn due to a shortage of supply. For instance, the shipments coming from Apple’s lens suppliers also are declining. Analysts have revealed that Apple’s production is not expected to improve until Q2 2020.
Nike
After finding out that an employee of theirs has been infected with coronavirus in the European campus, Nike has shut down the European headquarters. The company executed a deep clean in the campus to reduce the chances of virus spreading.
In the previous week, Nike’s shares were down by as much as 1.45%.
Starbucks
Even though Starbucks stays positive about a long-term relationship with China, half of the Starbucks stores are currently closed in the country. At other locations, the Starbucks cafes are being subjected to amendments in operating hours to reduce the impact of coronavirus. The company says they are consistently monitoring decreasing foot traffic.
Louis Vuitton
The premium fashion brand Louis Vuitton, has been experiencing a decrease in sales in Hong Kong because of coronavirus. While originally having observed a 12% increase in sales in the fourth quarter, the company still saw a decline in sales in Hong Kong by 40%.
How Can You Control The Situation?
- Expect the unexpected. Pay attention to the details of your retail business. Keep a close eye on your orders, the volume of orders, and value of these orders. This is to pre-prepare for the impact your retail might face.
- Then, plan for supply paucity. There should be an emergency mechanism for quick decision-making. The team should be ready to deal with shortages in production that might arise in the near future.
- Since the coronavirus outbreak is disrupting every industry, retailers should plan to reduce delivery and distribution. While this may not be as speedy as it was in the past, it can be improved. In fact, many retailers have started packing their products in different packaging to reduce contamination and human-to-human contact. This can prove beneficial.
- Lastly, automate your supply chain. Automation can help you receive notifications, real-time shipment updates and alerts without any hassle. The auditing invoice further reduces the work of your team.
Coronavirus is not only aggravating the health concerns of individuals but also disrupting the lifecycle of retailers. With calculated measures and automation, the situation can be handled while there’s still time.
Ana Shan is a product evangelist at AuditShipment.com, an AI-driven audit service that automatically captures more than 20 carrier errors and helps businesses save up to 16% of their shipping costs.
