2020-02-10 "Danger" and "Opportunity" for Retailers + How bad it can be?

Background: Retail companies are facing huge challenges in the epidemic environment. Many frontline employees are working overtime to secure supplies. For retailers, supply chain bottlenecks and lack of inventory are two of the major problems faced in the short term.

Core questions: (1) What changes will the epidemic bring to consumer behavior and competitive landscape in the retail industry? (2) How should retailers respond?

(1) What changes will the epidemic bring to consumer behavior and competition in the retail industry?

For consumers: 1. There are three different types of commodities analyzed: a - Demand exploded during the epidemic and then stabilized, mainly fresh produce b - Demand exploded during the epidemic and then went into a period of downturn, mainly hygiene/durable goods? c - Demand was sluggish during the epidemic and then grew explosively, mainly for offline consumption and large durable goods. 2. in terms of channel: after this period of cultivation for online and home services, consumers will be more inclined to omni-channel retailers. 3. in terms of quality characteristics of goods: consumers will be more important to the safety of goods 4. in terms of brand: consumers will be more trusting of companies that provide quality services during the epidemic.

For the competitive landscape: Overall, industry consolidation and reshuffling will accelerate, with more retailers exiting due to insufficient cash flow during the epidemic. Omni-channel, large-scale, risk-resistant retailers will have the opportunity to further expand their market share, gain consumer trust, and capture the hearts and minds of consumers during this epidemic. The smaller offline traditional retailers face a greater impact, survival is the first priority.

(2) How should large retailers respond?

Short-term: Ensure the supply of materials and win the trust of consumers and employees.

Medium-term: Adjust budgets; retain new customers through changes in product mix and operational activities

Long-term: Further enhance omni-channel customer service and experience; strengthen the supply chain; and identify potential acquisition opportunities.

Background: Two things make a new infectious disease very alarming: (1) It's growing exponentially (2) High uncertainty due to sparse information.

Key Question: (1) How likely is 2019-nconv becoming a global disease? (2) How deadly it can be? The answer is still uncertain but the public-health system needs to prepare for it. The answer is still uncertain but the public-health system needs to prepare in advance.

The curing medicine is still 6-12 months away, now still relies on the public health system. Even though China has taken strong quarantine measures, it's still unclear whether the country can fully control the disease. It can be even worse when the disease spreads to other countries who can't afford it. It can be even worse when the disease spread to other countries who can not execute such quarantine measures like China. The world has responded very fast towards the disease. It can be even worse when the disease spreads to other countries who can not execute such quarantine measures like China.