Running Head: COVID-19 PANDEMIC EFFECT ON RETAIL STORES

The effect of Covid-19 pandemic on retail stores

Toronto School of Management - Research Project

Name Student No.

Amy Stanford O1013722

Ayaka Monzen O1020324

Iuliia Korshunova O1013740

Md Monirul Islam Monir O1012860

Thilan Harshana O1014995

Shomari Fagan O1015182

Olufunmilayo Ayus Mohammed O1019038

Table of Contents

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COVID-19 PANDEMIC EFFECT ON RETAIL STORES

Introduction ...……………………………………………………….. 3

Results ………………………………………………………………...

Conclusion & Recommendation ………………………………….....

Appendix A …………………………………………………………..

Appendix B …………………………………………………………..

References …………………………………………………………….

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Introduction

For many people retail shopping is an experience that creates memories. For some
of them, learning about new products or services, purchasing a favorite meal or
favorite outfit was a part of their daily therapy to manage stressful events. The
hands-on experience brought about by retail shopping made it easier for consumers
to decide on whether a product or service was a right fit for them. Covid-19 has
impacted retail shopping, taking away the enjoyable experiences associated with it.
From lockdowns, closure of stores for different reasons, retail shopping has not
been the same and may never go back to what it was before. The rapid growth of
online shopping is now a pending threat to brick-and-mortar stores as some would
say “retail is dying”.
According to the Deloitte research (2020) from 450 to 700 retail stores closed or
were in the process of closing at the beginning of the Covid-19 in Canada, which
led to 13.6% sales drop. Among the reasons, there were the spread of disease,
social and physical distancing regulations and the need to close non-essential
services mentioned.
The anxiety of people to catch or transmit the disease also made them scale back
the trips to stores. Up to 66% of respondents admitted visiting shopping malls less
often as well as 37% of them did not want to go to grocery and convenience stores.
They stocked their storage rooms with enough groceries that could last from 2 to 3
weeks minimizing the in-person retail shops visit. Undoubtedly, that has had a
devastating effect on the retail sales. Most of the stores stayed afloat only thanks to
the online presence as around 52% of Canadians preferred buying things online.
During Covid-19 period that number has grown up to 58%. There has been a rapid
replacement of in-store shopping with online one as companies were trying to

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adjust to new realities. Still many stores have to come up with the idea of what
actions should be taken after the Covid-19 restrictions are lifted.
We can guess that with the process of reopening customers will require more
actions from the government and the companies to prevent the spread of the
coronavirus. They might want to see sanitizers, masks and gloves that are more
available in the stores as well as other necessary health protecting facilities. During
the pandemic the consumers are adopting new behaviors and habits which may
need to be observed more thoroughly in order to return them back to retail stores.
People might continue buying online, availing themselves of click-and-collect.
The purpose of this study is to achieve a better understanding of the impact
overtime of Covid-19 on retail consumer behavior in Canada and strategies
businesses can implement to get consumers back into retail stores post covid-19.
The below questions were used to navigate the research:

1. What has consumer behavior been like before and during Covid-19 in
Canada?
2. What is customers' change in product choice during Covid-19 in Canada?
3. How can businesses bring customers back into retail stores in Canada post-
Covid-19?

The research method and the survey results will be presented in further
sections. The conclusion will be made in the final part of the project.

Research Method

In order to collect the primary data for our topic, we reached out to people
currently residing in Canada and were also in Canada before the pandemic. In
terms of the secondary data, we referenced data, available online from previous
studies conducted around the ongoing effects of Covid-19 on the retail industry in

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Canada. Thus we gathered the necessary resources for understanding our topic
deeply and illustrating the data.

Our sampling method is simple random sampling, as we created a survey and

distributed it randomly to volunteers within Canada. We chose to use this sampling
method due to our time constrictions as well as the access to volunteers was higher
when distributing the survey online. The survey questionnaire consists of nominal,
numerical data consisting of open-ended and closed-ended questions. These are
examples of open-ended and closed-ended questions. 1. To understand if
Canadians prefer to shop online or at retail stores. 2. What Canadians think the
retail stores need to improve before the online shoppers will prefer to shop at the
retail stores. That question is based on how the volunteer feels about their safety at
retail stores, due to Covid-19.

While making the survey, we adjusted the subject to the current situation and made
it easy to answer for the respondents. Moreover, the questionnaire can be
completed online within 15 minutes which makes it less time consuming and not
requiring any funding.

Furthermore, there has been an attempt to collect responses from different groups
of people which makes the data accurate. Despite this fact, the possibility of small
inaccuracies and subjectivity cannot be excluded as less than 60 respondents have
participated in the survey. That can be specifically applied to question 18 where
respondents are asked for their opinion about strategies businesses can use to get
them back into retail locations.

Eventually, the survey gives a general understanding of the situation, but does not
show the opinion of the entire population. The data collected can serve as a reliable

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source of updated more accurate information in comparison to secondary

resources.

Results

The results of the study have shown that the majority of respondents give
preference to traditional retail shopping compared to online shopping. Despite the
advantages of the online platform, which includes easy access to goods, time
saving and ability to compare merchants quickly, the participants still prefer
traditional retail shopping.

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The results have demonstrated that before Covid-19 most people shopped online
once a week.

Figure 1 shows the amount of times people did shopping online before the
pandemic.

However, over 40% of the sample population did traditional retail shopping twice
or more per week.

Figure 2 presents the amount of times people did retail shopping before the
pandemic.

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Among the majority of respondents 69.2% of them fall under the age between 26-
35 years old and are currently employed with over 50% of participants receiving an
annual income of over 25.000 Canadian dollars. (Appendix 1,2,3,4)

That makes the data unbiased and clear as neither the financial concerns nor the
age of the respondents have influenced their choice of way of shopping.

It is also worth mentioning that the behavior pre-covid and at current time has
slightly changed, which was provoked by the lockdown and stores shut down.

It is seen from the diagram that the amount of times the respondents do shopping
in-store has dropped to 0-1 times per week. So, almost half of the respondents have
stopped visiting retail stores as often as they did before and this tendency does not
seem to change as on the question about the future changes of their shopping way
the answers equally divided for 42.9%.

Figure 3 shows how the customers’ behavior has changed in comparison to pre-
covid times.

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Figure 4 shows the future perspective for changes in shopping ways.

The questions about the customers’ buying preferences pre-covid and during Covid
have also been covered. The graph below shows that before the pandemic most of
respondents’ expenses covered basic human needs such as groceries (77.6%),

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clothing (63.3%) and footwear (34.7%), healthcare products (38.8%) and cleaning
products (36.7%).

Figure 5 demonstrates the goods people spent money on before Covid-19.

However, the results for the respondents’ preferences during Covid have been
controversial. The drop of 4% for groceries can be expected as many retail stores
limited the capacity or shut down. But the same number around 4% has shown the
increase in footwear demand, which is unexpected. Also, it should be mentioned
that people started buying more furniture as the number increased by 10%; covid
safety products as a new option have also been popular among participants, which
gave a result of 28.6%. In the survey the respondents had a right to add their own
options among which there has been alcohol mentioned (2%).

Figure 6 demonstrates which products were bought during Covid-19.

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Moreover, the participants were offered to choose the products they are going to
buy when the pandemic is over. The majority of people would like to purchase the
clothing at a physical store with 46.8% after the pandemic ends, which gives the
retailers strong potential to return customers back. Also, the customers’ concern
about the virus has led to the equal demand for Covid safety products such as
masks and sanitizers and groceries displayed the second-highest number which is
38.3%.

Figure 7 illustrates what type of retail categories have the potential power of
getting back customers to their store.

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Returning the customers back to retail stores will require the companies much
effort. Therefore, the respondents were asked to point out the reasons that will help
the local businesses plan further steps.

The study found out that discounts/special offers, instant availability of products
and good customer service are the main motivating factors that would influence
customers to shop at physical retail stores more. When asked what additional steps
businesses can take to get them to shop at retail stores more, which was an open-
ended question the results were similar. (Appendix …) Discounts/Special offers
lead with a 75% response rate. It is also important to notice that safety and security
are a driving factor too as 29.2% of respondents indicated this.

Figure 8 shows the main reasons for people to go to retail stores.

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The study also revealed that 39.6% of respondents agreed that retail stores are
doing their best to keep the customers who visit the retail outlets safe and 71.4% of
them feel comfortable with the companies’ measurements. However, 14.6%
disagreed that retailers are doing a good job. This brings to light that there are still
concerns about the safety of consumers in these enclosed environments.
Additionally, 25% of respondents gave a neutral response, this also can be taken
into account.

Figure 9 shows the confidence of the respondents about safety when going to retail
shops.

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Figure 10 presents the respondents’ evaluation of safety in physical locations.

Conclusion and Recommendations

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Based on data obtained from this study, we have understood that

respondents are looking forward to more in-store shopping, for various reasons and
the driving factors that will make this a reality. It is also keen to mention that
before covid, retail shopping was done more when compared to online shopping.
The data also observed a change in the types of products customers purchased
during covid. Majority agreed that businesses are doing a good job at keeping their
customers safe at their store locations however there is room for improvement.

It is recommended that retailers strategically create better promotions and

discount packages for their in-store products while adding variety to their list of
available merchandise. This strategy should attract customers to engage in in-store
purchases thus increasing sales and profit generated from daily business
operations. It is also important to note, customers are looking forward to
purchasing more clothing items from retail stores post covid. This is a suggestive
avenue to better explore. Additionally, it is also suggested that stores create safer
and cleaner spaces against Covid-19. This will aid in reducing concerns
surrounding customers safety when they visit retail locations and motivate more
store visits. We are also recommending that future studies be done. This will help
in understanding ongoing impacts and changes on the retail industry as a result of
covid-19 so new business strategies can be developed with the intention of
generating profits.

References

McKeown, L., & Brocca, J. (2009). Internet shopping in Canada: An examination of data, trends and
patterns. Statistics Canada, Business Special Surveys and Technology Statistics Division.

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Salehi, F., Abdollahbeigi, B., & Sajjady, S. (2021). Factors affecting the trust in the online shopping and
E-commerce Success of Companies. Asian Research Journal of Current Science, 1-5.

Yousefi, A., & Tang, J. (2012, August). E-commerce: Consumer online shopping in Canada. In
International Conference on E-business Technology and Strategy (pp. 1-14). Springer, Berlin, Heidelberg.

https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/finance/ca-en-covid-19-voice-of-
canadians-and-impact-to-retailers-aoda.pdf

https://www150.statcan.gc.ca/n1/pub/45-28-0001/2020001/article/00092-eng.htm

Appendix

Appendix A

Questionnaire

Appendix B

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In your opinion, what else can businesses do to get you to shop more at their store
locations?35 responses

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Better Sales

Be inclusive

have better safety measures and continue things like capacity limits

Better deals

In store promotions

Ability to see and feel the product in person and instant customer service compared to the online
ones.

To provide better choice of items

More sales

I form customers of their unique options in store

Provide better sales promotions and in store only products

Nothing safe in number one offer more discounts

Good customer services, good prices, open hours, aiming health and safety at first.

good promotions to offset the rising cost of living

Available inventory

Products availability

having a cool atmosphere that makes people want to take pictures or share the good experience
there to friends!

Special offers and provide a safe environment

Sales

Deals

I prefer The sores that has discounts and especial close by the area where I live. Not crowed and
convenient.

Honestly, not much. I prefer online shopping a lot more than retail. I would only go to a store if I'm

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already at a mall for a special event or hanging out with friends

Reduce steps of paying. Maybe through the app

Reduce lines up and better customer service

Stricter PPE compliance for both customers coming in store and employees working in store.

open the change rooms during covid so we can try on clothes. otherwise, it s easier to shop online

Discounts, promotions, special deals

Eco-friendly choices

Hire more cashiers to Reduce the wait time when your checking out

Educating all employees regardless of their department on the location of all products in the store;
this saves the customers time when he/she is not sure of the location of an item

Get a wider variety of products

Better discounts

In-store purchase that offers delivery

Promotions, events, instant availability of products is the most important one

Good services and discounts

Get more stock of products

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