What Do Health Epidemics Mean for Retail?

What Do Health Epidemics Mean for Retail?

Let’s explore the question: what do health epidemics mean for retail?

When governments are implementing ‘social distancing’ policies (or like South Africa is experiencing now – a complete lockdown) as the best defence against the virus, consumers go into quarantine. No work commutes, no in-store grocery shopping, no restaurants – just silence.

What does it all mean?  

Covid-19 has infected 900 South Africans so far (as at 26 March 2020). Up until lockdown our merchant partners selling hand sanitizer, soap and face-masks were feeling the burn. That’s because rather than taking unnecessary risks, consumers wanted to stay at home for all but the most important items – which these days they expect to be attainable via mobile platforms anyway. 

The fear of infection is driving change

Health epidemics are not a new phenomenon. As far as history recounts, the world has been bombarded over and over with pandemics, from the Black Plague to more recent outbreaks such as influenza, SARS, MERS, Ebola, and the CoronaVirus. The number and diversity of pandemics have increased over the past 30 years. This trend is only expected to intensify in the future.

The one thing that these recent epidemics have highlighted is the need for retailers to continuously improve upon their omnichannel offerings and supply chain. During an outbreak, the widespread fear of infection reduces customer foot traffic drastically. A multichannel approach to sales that provides customers with an option for a seamless shopping experience from the comfort of their own homes is no longer a luxury. It’s critical. During an epidemic, businesses that involve bringing together people in public will definitely see a dip in their revenues.

Infectious disease outbreaks are a global threat 

In a white paper released by the World Economic Forum (Outbreak Readiness and Business Impact: Protecting Lives and Livelihoods across the Global Economy), the number and diversity of infectious disease outbreaks are gradually but inexorably increasing. Their capacity to send shocks through our global economic systems is also increasing. As we travel, trade and communicate across an increasingly hyper-connected global economy, more companies will find themselves exposed to the effects of outbreaks that begin thousands of miles away. Consequently, consumers and business people will look to the web for solutions. 

Lessons learned from the CoronaVirus

The complete shutdown of cities sounds like a scene from a scary zombie movie, but all it took was a virus to force most of the world into quarantine. 

Across China and right here in South Africa, supply chain specialists have had to use their expertise to ensure that basic necessities remain available to the public. Besides that enormous effort, retail stores have been hard hit, and repercussions from the virus are crushing businesses (if you want to feel the severity of the situation, just listen to 702’s Bruce Whitfield’s emotional response to Edcon’s conference call where Grant Pattison tells their suppliers there is no money to pay them). Stocks are at an all-time low, while there is no end in sight as to when production and transport will resume to business as normal. will it forever be business “as unusual”?

Those hardest hit are retailers that have struggled to adopt online channels and rely solely on physical store traffic. However, with lockdown taking effect, even those with online channels will see a decline for the three weeks period. 

However, it’s clear that stores with an already established digital presence and supply chain experienced a smaller disruption.

These trends are likely to radically change and reshape how retailers meet consumer demands going forward, across the globe. 

Implications for South African retailers

Supplies of basic goods such as fresh food and pharmaceuticals are consumers’ number one priority. In a crisis, the demand for these spikes due to panic buying. Sales of non-perishable items also increase exponentially during an emergency. 

Therefore, retailers that can offer a variety of fresh produce via digital platforms, will be clear winners in the race to secure customers. This would also require reliable delivery options or secure pick-up points. 

Also, those that will survive a post-coronavirus world will be retailers who have built a reputation of quality, trustworthiness, and dependability. Brand loyalty may now become a deal-breaker. 

A diverse and wide-scale supplier network will also be necessary for retailers to succeed. 

According to the Bain Brief “The Future of Retail: Winning Models for a New Era”, the disruption caused by the coronavirus comes at a time of intense change for the retail industry. “For instance, it has so far accelerated the shift from traditional store-based selling to purely digital or omnichannel retailing”.


The potential economic losses from outbreaks of infectious disease are massive. Public health emergencies such as the Coronavirus intensify the pressure to operate on a multi-channel level. Brick and mortar stores may no longer cut it as consumers demand more rapid digitisation. “Absolute scale, rapid innovation and data-analytics expertise are now as important as local leadership” according to Bain.