Abstract
Keywords
1. Introduction
2. Retail structure and the impact of COVID-19
3. Methodology
A. The consumer
Online purchases
Explanatory variables
Models
B. The retailer
4. Results: online retail during COVID-19 in Belgium
A. The consumer
B. The retailer
5. The increase in e-retail accessibility
6. The lack of professionalism prevents fundamental change on the retail side
Acknowledgments
References
Abstract
Since the turn of the century especially small, local retailers struggle with the advent of e-commerce. It is hence no surprise that the retail sector is one of the hardest-hit sectors in the current pandemic. To understand the short- and longer-term impacts of COVID-19 on retail, we conducted two surveys to understand ongoing changes in the sector. By contrasting changing consumer behavior with the actions taken by local retailers, we assess whether the current pandemic is potentially a catalyst for e-commerce in Belgium. We do this based on a newly constructed framework of e-retail accessibility, as the differences between online and physical retail require a revision of the traditional economic geographical perspective on retail performance as introduced by Christaller (1933). We conclude that the COVID-19 pandemic holds ample opportunities for an increase in the three components of e-retail accessibility, but that a lack of professionalism might prevent traditional local retailers to retain a share of the expanded online market. This could well mean the final blow for local brick and mortar shops if, as is predicted, the share of online shopping in total retail expenditure remains high after the pandemic.
1. Introduction
The COVID-19 pandemic and resulting governmental restrictions hit the retail sector hard. While in the second quarter of 2020 the GDP in the Euro-area was down 12% year-on-year, the sales of non-food products dropped by 23.8% in April 2020 compared to a year before. Although total retail trade volume almost recovered after the months of crisis, the constitution of this volume changed dramatically, with mail orders and the internet taking over traditional sales (Eurostat, 2020b, 2020c, 2020b). The temporary closure of stores, bars and restaurants, social distancing rules and contact restrictions and the limitation of non-essential travel halted physical shopping and reshuffled a sector already at a turning point.
Indeed, even before the spring of 2020 the traditional perspective on the organization of the retail sector was under scrutiny and examples of physical stores in decline were plentiful (Dolega and Lord, 2020). On the one hand, hypermobility and more free time since the 1960s implied that consumers were not anymore bound to the closest outlet, suggesting the range, i.e. the distance and time a consumer is willing to travel for reaching a shop, significantly expanded. In addition, the increased mobility and scaling up in new formats drove a decentralization of retail activities out of the inner cities (Lord and Guy, 1999). On the other hand, online shopping on its turn was about to erase the notion of range as a measure of distance altogether (Cairncross, 2001) and required a revision of retail strategies (Hagberg et al., 2017). Resultantly there are plenty of examples of retail areas in decline and structural changes in shopping real estate (Singleton et al., 2016).