Retail industry management in post Covid Era.

Team 3
Team members:
• Ansh Dengre
• Kevin Joseph
• Kartik Singh
• Maitreya Jamkhedkar
• Shreya Kolluru
• Sachin Karambe

Abstract
In March 2020 the whole world was hit by a new pandemic “Covid-19” also commonly known as
the corona virus. Countries all over the world scrambled to minimize the death toll by putting in
strict lockdown measures. In many countries these lockdown measure stayed on for months and
in some parts of the world there is still a stringent lockdown. Almost all kind of business were hit
by the pandemic but the industry which got hurt the most was the retail sector. As soon as the
national lockdown was implemented retail sector all over the country and the world was shut
down for months. The upcoming few months was going to be the hardest ever faced by the
sector. Millions of retail store all over the world ceased their operations as they were not able to
keep up with the operational cost with rent and salary being the highest factor of operational cost
and with no source of income many were left with no other option. This caused a major
unemployment crisis throughout the world with unemployment rates rising to a 50 year high.

As soon as the first wave started to recede many stores throughout the country started to open
up once again. For a while there was a sense of normalcy. Then again in March 2021 the second
wave of coronavirus hit the country with it being deadlier than the first wave. At this point there
was also a sense of economic instability looming over the country. Since the second wave hit the
retail sector in the country has been completely shut or has been working under severe restriction
and now with a third wave looming over the country we try to find out if and when the retail sector
can get back to its previous glory.

In this study we are trying to find out what can the retail sector do to bring back its customer and
what does a normal customer expects from the retail outlets in such trying times.

Hypothesis:
Once the Covid threat is over the retail sector would gradually reach its previous high even
though they would keep facing tough competition from the e-commerce industry.
(Please Note: For this study we are only going to take into consideration the fashion retail
industry.)

Sample Size For this study we are going to take a sample size of 100-150 people from
different age group, cultural and religious background and income level.

Keywords: Corona, Covid-19, Retail Store, Customer, Lockdown, National Lockdown,

Operations, Unemployment, Restrictions.

Introduction.
The main objective of this research paper is to understand the impact of COVID- 19 on the fashion
retail sector. In doing so we can understand what the future holds for the industry. So, we all know
how COVID 19 has been crippling the retail industry so in this study we find out if and when the
virus recedes, will people start going back to the retail establishment for their needs or will they
prefer online modes of shopping and also what the establishments can provide to make the
customers feel more secure. A study by “IDC tech buyers’ presentation” shows that the COVID 19
has bought in major changes in the consumer buying pattern and that the growth of retail industry
has been cut down by 70% since March 2020, compared to the pre covid era. It also states that
grocery retail would be the only segment to hit positive growth numbers whereas fashion, furniture
and electronics retailers would be hit the hardest.
So, in this study to understand the market and to learn peoples buying pattern we collected primary
data as well as secondary data. For primary data we had a sample size of 105 people from all
over India, and for secondary data we referred to authentic journals and research papers written
by worlds renowned scholars.
Hypothesis:
So, while conducting this study we had different hypothesis to understand different aspects of the
study. As stated in the abstract submitted by us, our main hypothesis is “Once the Covid threat
is over the retail sector would gradually reach its previous high even though they would
keep facing tough competition from the e-commerce industry.” as we progressed through the
topic, we felt the need to study different aspects of the topic deeper.

1. H0: There is no significance difference in average ratings for shopping behavior in terms
of expenditure after COVID.
H1: There is a significance difference in average ratings for shopping behavior in terms
of expenditure after COVID.

2. H0: There is no relation between the offline and online modes of shopping among the
genders after COVID.
 H1: There is a relation between the offline and online modes of shopping among the
genders after COVID.

3. H0: There is no significance difference between the ratings of gender for visiting a retail
store for shopping related to clothing or footwear.
H1: There is a significance difference between the ratings of gender for visiting a retail
store for shopping related to clothing or footwear.

4. H0: There is no significance difference between the gender rating visiting the retail store
after COVID.
H1: There is a significance difference between the gender rating visiting the retail store
after COVID.

5. H0: There is no significant difference between age groups visiting the retail store after
pandemic gets over.
H1: There is a significant difference between age groups visiting the retail store after
pandemic gets over.

Literature Review
Since the pandemic began many researchers and scholars have debated on how the pandemic
would change the landscape of the retail industry forever. So, for this part of the literature review
we have cherry picked the topic which we found to be the most relevant.
Business standard which is one of the most trusted news portals in India believes that the actual
threat of COVID 19 to retail sector is over. Their article which was published in April 2021 mentioned
that the fashion retail industry would see a gradual growth of 23-25 % in the financial year 2021-
22. However, this growth won’t be able to make up for the destruction caused by the pandemic and
they believe that the industry would reach its pre covid market share by FY- 2023. The main reason
for this is the vaccination pace which is being administered throughout the country and it is unlikely
that the country will go through another complete lock down like it did last year.
Judith Magyar from Forbes believes that the fashion industry is moving into a new era. She
believes that years of fast fashion at such cheap rates has created an unsustainable scenario for
the environment as up to 70% of the garments are made from synthetic materials which takes up
to 200 years to dissolve. This is one of the reasons why many customers are opting for
environmentally friendly material or going in for second hand clothing. Another reason for this is
that COVID 19 has caused millions to lose their jobs so due to financial restriction a lot of customers
are buying goods from third party sellers like Facebook marketplace or eBay.
Douglas Benjamin, CEO of F J Benjamin Holdings which owns brands like Zara mentioned that
due to COVID restriction only a certain amount of people is able to enter the stores which affects
the overall footfall. He said that his company is trying to renegotiate with the landlords on rental
agreement as almost all the fashion retailers are not able to keep up with the rental and if that
doesn’t work out, they are planning to shut down various outlets. He also believes that going online
with minimum physical presence is the right direction for the future.

OBJECTIVE
• To study the retail industry management in post covid era
• To study the consumer behavior towards the spontaneous changes occurring
during the pandemic

• To study the various challenges faced by the people while shopping during covid
times

• To study the rise of various digital platform over the retail stores

• To study the approaches in the rise of retail industry

Research Methodology

In order to apprehend the behaviour and perception of consumers towards the retail sector,
especially the fashion retail industry, we conducted an online survey. We handed out
questionnaires, which we formulated to understand the mindset of consumers toward purchasing
fashion related goods from a physical retail store, during the pandemic.

Also, the objective of this questionnaire was to forecast the future of fashion retail, i.e., post
covid-19. The questions were both subjective and objective and the survey generated 108
responses to the questionnaire. The questionnaire had 8 questions apart from the name, age and
the demographics.
The profile of respondents is shown with the help of two charts below:
City

Sampling and Data Collection

Since urban respondents were under consideration, the sample of respondents were taken
mostly from Mumbai and consisted of both genders, ages ranging from up to 20 years to more
than 30 years. There were people of different educational backgrounds, occupations, income
groups, marital status and religions. The sampling procedure used for the study was a simple
random sampling technique. Respondents were asked to express their agreement /
disagreement with statements on a five-point Likert type scale with anchors ranging from “1 =
strongly agree” and “5 = strongly disagree”. In other cases, the questions were simple objective
questions with either a single choice or a multiple-choice response.
DATA COLLECTION AND ANALYSIS

Method of the study

The study has used both primary and secondary data. For primary data, collection survey
questionnaire method was used to collect data from the sample size of 108
For analysis of hypothesis, we have used chi square test.
The secondary data has been collected from reports, statistics data etc

When asked about their opinion on whether online or offline mode of shopping is preferred 63%
of the respondents chose online shopping whereas 37%would prefer offline mode of shopping
(figure 1)
From the analysis 13% respondents rarely visit retail store shopping related to clothing or
footwear whereas nearly 2% of respondents prefer going to this store everyday.
Most of them (45%) prefer to do this occasionally.
According to the analysis 45% of the respondents occasionally feels safe while visiting retails
store compared to that of respondents not feeling safe (7.4%)
Near about 7% respondents feels completely safe even after the pandemic
From the given questionnaire, we can conclude that 92% respondent feels a mask is a
mandatory requirement compared to that of thermal screening.
Most of them prefer proper sanitation (82.4%) and contact less service (65.7%)
Myntra, Amazon, Flipkart, Instagram are the most used E-commerce websites by the
respondents.
Myntra (74%) whereas Amazon (70%) are leading and most preferred options during the
pandemic.
Rest is there with variable changes
When asked are there any factors influence them when they go for shopping (80%) feels price is
the major factor compared to that of safety (43%), return policy (53.3%), convenience (59.8%)
and discount (65.4%)
From the above figure, we can easily say that the majority of the respondents are eagerly waiting
to shop from the retail store.
49% of them are sure to purchase from retail stores rather than do it during a pandemic.
On the other side 42% of them are confused.
Very less (8%) of them would not prefer to purchase from retail even after the pandemic gets
over

Test:
• ANOVA
H0: There is no significant difference in average ratings for shopping behavior in terms of
expenditure after covid.
H1: There is a significant difference in average ratings for shopping behavior in terms of
expenditure after covid.
Anova: Single
Factor

SUMMARY
Groups Count Sum Average Variance
0-20 years 6 19 3.166667 0.166667
20-25 years 84 263 3.130952 1.175416
26-30 years 4 14 3.5 3
<30 years 13 45 3.461538 1.769231

ANOVA
Source of
Variation SS df MS F P-value F crit
 Between Groups 1.638056 3 0.546019 0.437244 0.72682 2.692841
Within Groups 128.6236 103 1.248773

Total 130.2617 106

Fcal<Ftab
Hence, we accept H0 and say that there is no significant difference in the ratings of shopping behaviour in terms o
expenditure in different age groups of people.

• Chi Square test

H0: There is no relation between the offline and online modes of shopping among the genders
after covid.
H1: There is relation between the offline and online modes of shopping among the genders
after covid.
Gender offline online total
Female 17 40 57
Male 23 28 51
Total 40 68 108

O E=Rt*Ct/Gt
Sig
17 21.11111 value 0.100814
40 35.88889 compare significant vale with alpha =5%=0.05
23 18.88889 if sig value> 0.05 accept Ho.
28 32.11111 if sig value<0.05 accept Ho.

Here the significant value 0.1008>0.05

Hence, we accept H0 that is there is no relation
between the online and offline modes of shopping
among the genders after covid.
• Z Test

H0: There is no significant difference between the ratings of genders for

visiting a retail store for shopping related to clothing or footwear
H1: There is a significant difference between the ratings of genders for visiting a retail store
For shopping related to clothing or footwear.
 Variance for
male: 0.91657055
Variance for
female: 0.742382271
z-Test: Two Sample for Means

Male Female
Mean 2.490196078 2.684211
Known Variance 0.91657 0.74238
Observations 51 57
Hypothesized Mean
Difference 0
-
z 1.101996071
P(Z<=z) one-tail 0.13523169
z Critical one-tail 1.644853627
P(Z<=z) two-tail 0.27046338
z Critical two-tail 1.959963985

Zcal<Ztab
Hence H0 is accepted and we can say that there is no significant difference between the
ratings of gender visiting a retail store for shopping related to clothing and footwear after covid.

• Z test
H0: There is no significant difference between the gender ratings visiting the retail stores after covid.
H1: There is a significant difference between the gender ratings visiting the retail stores after covid.
 variance for
male 1.074971165
variance for
female 0.748538012
z-Test: Two Sample for Means

Male Female
Mean 3.058823529 2.666667
Known Variance 1.07497 0.74853
Observations 51 57
Hypothesized Mean
Difference 0
z 2.120233099
P(Z<=z) one-tail 0.016993196
z Critical one-tail 1.644853627
P(Z<=z) two-tail 0.033986392
z Critical two-tail 1.959963985

Zcal<Ztab
Hence, we accept H0 and we can say that there is no significant difference between gender ratings for
visiting retail stores after covid.

• CHI SQUARE TEST

H0: There is no significant difference between different age groups visiting retail stores after pandemic
gets over.
H1: There is a significant difference between different age group visiting retail stores after pandemic
gets over.

Age Group Yes No Maybe total

below 20 4 0 2 6
20-25 39 7 38 84
26-30 3 0 2 5
above 30 7 2 4 13
total 53 9 46 108
 Observed value E=Rt*Ct/Gt
4 2.944444
0 0.5
2 2.555556
39 41.22222
7 7
38 35.77778
3 2.453704
0 0.416667
2 2.12963
7 6.37963
2 1.083333
4 5.537037
sig value 0.800541041

Hence 0.8005>0.05
So, we accept H0 and we can say that there is no significant difference between age groups visiting
retail stores after pandemic.

Findings
Based on the questionnaire that we circulated and after doing its analysis, the major findings
were:

1.Majority of our respondents were from tier 1 and tier 2 cities

2.When asked about how frequently they visit retail stores:
a). Respondents from tier 1 and tier 2 cities said that they are generally reluctant to visit Retail
stores, reasons being-
i). Convenience of ordering from home
ii). Same day delivery when ordered from e-commerce websites.
iii). Lockdown restrictions are still there in the majority of these cities.

b). While purchases from offline store still constituted the majority of the purchases made by the
respondents from rest of the cities, reasons being;
i) Stores available in the vicinity
ii) long delivery period when ordered from e-commerce sites.
iii). Option of trying the article before making the purchasing decision.
3.Majority of our respondents belonged to the age group of 20-30 years which shows-
i)This age group dominates the sales of the fashion industry.
ii). Most of the customers are students followed by professionals.
iii). They want to be the center of attraction.

4. 63% of the respondents prefer to shop online, reasons influencing their decisions were:
i). Fear of stepping out due to covid 19.
ii) Attractive offers from e-commerce giants.
iii). Variety of products.
iv). Return policy.
v). Convenience of buying from home.

5.Consumer prefer Amazon, Myntra and Ajio the most followed by Instagram for their fashion and
apparel needs.

6. Instagram is coming out as the next big e-commerce giant with many fashion pages offering
items at a cheaper price to that of other sites.

7. Most of the buying decisions are made while browsing through the internet.

8. Websites like H&M and ZARA dealing in luxury fashion items still lag behind by a huge margin.

9. To get back to its pre - covid business, offline stores should focus on prioritising the safety and
health of the visitors.

10. Some of the safety measures that customers would like to see implemented in offline stores
are:
i). Proper sanitization
ii). Contact less service.
iii). Mandatory mask requirement.
iv). Thermal Screening.

11. Covid-19 has largely impacted the expenditure of the general public with the majority of the
people preferring to spend on essential items rather than spending on fashion and clothing items.

12. We feel that the negative impact on the offline retail industry due to Covid is slowly fading out
as lockdown restrictions are easing up, when asked about the same to our respondents 91.7% of
them have a positive consensus regarding offline stores.
Conclusion
During the covid 19 pandemic, huge disruptions were caused in the majority of industries, but the
Fashion Retail Industry was hit the hardest. Amid the global lockdown production activity came to
a halt. Many workers lost their jobs, many factories shut down. There was very low demand in the
fashion industry as people spent most of their savings on essential items such as masks,
sanitizers and other daily need items.
There's a lot of uncertainty revolving around the fashion industry if it can recover from the impact
of covid-19, or not.

The purpose of this study/research was to find out the general consensus regarding the fashion
industry and to find out if there's a chance for it to bounce back. With the help of our
questionnaire that we circulated, we wanted to know from the general public about how their
shopping behaviour was influenced during the covid 19.

Through our study we got the answers to the following questions:

1. Why did they prefer online above offline during the pandemic?

2. How the pandemic impacted their expenditure?

3. What can the retail sector do to gain back their customers?

4. If they feel safe while visiting the physical stores now or not?

5. Will they visit the stores again once things get back to normal?

One thing is established that the fashion industry has to do a lot of innovations or new ideas if
they want to reach the sales of pre covid times.
After being one of the worst affected sectors, the offline sector is expected to lose around 6% of
its total retail share by 2024, still offline retail will dominate the retail sector with a share of 90.3%.

Benefits

As a salesman and as a brand manager, it is very important for you to understand the customer
preferences under various circumstances. Many factors can influence customer decisions. One
of the most important factors which can change customer preferences is the safety of the
customer. As of September 2021, we all are going through a deadly pandemic and this is surely
enough to make the customer paranoid and change his shopping preferences. People are afraid
to go in public and are likely to select easier and more convenient ways of shopping, which is
online shopping.

This research paper can be used to infer the following critical information with perspective of
retail manager;
1. Understand the impact of a pandemic on the retail industry.
2. Understanding the customer preferences during a pandemic.
3. How to tackle the pandemic situation as a manager.

Scope & Limitations

1. The sample size taken into consideration might not give a complete idea about customer
preferences. This is because this study was carried out within a month.
2. This study was more focused on the state of Maharashtra. Nevertheless, we had few
respondents situated outside of Maharashtra.
3. The demographic aspect has not been analyzed deeply. Factors like age, income, and
expenditure behaviour have not been taken into consideration. This can be the topic of
focus for another study which will give you deeper insights on customer preferences.

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Plagiarism reports

Introduction and literature review

 Objectives

Methodology, data collection and sampling

Data analysis

Findings and Conclusion

Benefits, scope and limitations