The coronavirus pandemic has already had a huge impact on the United States economy, and the retail sector has been hit harder than most. The coronavirus impact on retail has had a particularly negative effect on smaller businesses that don’t have large ecommerce operations. US retail saw a 60% decline in foot traffic during the month of March, and the businesses most impacted were small, local retailers. Retail giants like Amazon, Walmart, Target and Costco, actually saw an increase in sales in March. This behavior will permanently reshape retail as we know it.

US retail saw a 60% decline in foot traffic during the month of March.

 

 

 

The retail giants get bigger

Before the COVID-19 pandemic, smaller businesses already had a hard time competing with the likes of Amazon, Walmart and Target when selling products both in-store and online. These retail giants have extensive supply chain networks and physical footprints of stores across the world. They dominate ecommerce fulfillment because they have the infrastructure to do it. It’s hard for small, local businesses to compete with these larger companies, especially when they have limited online functionality, smaller physical footprints and higher shipping costs.

 

Consumers are buying from retail titans instead of small businesses

The coronavirus impact on the supply chain has become clear. As shelter-in-place orders and social distancing have forced people to stay home, they have turned to ecommerce in a big way—particularly Amazon. Sales of items like cold medicine, hand soap, dog food and yes, even toilet paper have skyrocketed and overall consumer spending on Amazon is up 35% from last March, according to Facteus. Even when it comes to groceries, people are utilizing Amazon’s grocery delivery significantly more than before the pandemic, when it was struggling to take off. Studies also show that even when Americans have to go to brick and mortar stores, they’re going to the big box stores. Target, Costco and Walmart all saw increases in sales in March, while small retail stores are struggling to stay in business. Many of these small stores are struggling to stay afloat and furloughing employees while Amazon and Walmart are looking to hire more than 250,000 workers to keep up with demand.

 

 

 

 

Sales of items like cold medicine, hand soap, dog food and yes, even toilet paper have skyrocketed and overall consumer spending on Amazon is up 35% from last March.

 

 

 

 

Small Retailers are struggling

The coronavirus impact on ecommerce has caused smaller stores across the country are trying to take advantage of the Paycheck Protection Program as they’ve seen a drastic decrease in sales. Many stores, even midsized chains like JCPenney, have furloughed their workers and not all of these millions of workers will get their jobs back upon the reopening of the economy. In order to compete with the likes of Amazon, smaller retailers need to determine how to capitalize on the current state of retail act like Amazon without using their Fulfillment by Amazon (FBA) program and warehouses.

 

ITS Logistics can help smaller retailers act like Amazon

Since Amazon is so popular among consumers, it can be very useful for smaller companies to sell their products on Amazon. Many retailers use Amazon’s FBA program, where they use Amazon’s storage and fulfillment options to sell to Amazon Prime members. However, this method can be expensive, and with Amazon prioritizing essential products during the pandemic, it’s not the best option. Another way to sell to Prime members is through Seller Fulfilled Prime (SFP). This allows you to fulfill and ship your own orders while meeting the Amazon standards and still reaching the Prime audience. If you don’t have the resources to do so, a third-party logistics company like ITS Logistics is a great fit. At ITS we are experienced in Amazon’s strict SFP fulfillment standards and offer a great alternative to FBA. If you are looking for a way to keep up with the ever-changing retail landscape, give us a call today.

How can we help you? Call (775) 353-5160 or fill out our short form today.

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