5 ways Covid-19 changed retail supply chains for good


Whether a crisis lasts weeks, months or years, it is clear that the global response to the pandemic has fundamentally changed consumer realities and the retailers they do business with.

Whether it’s political upheaval causing shortages in microchips for cars or electrical devices, volcanoes grounding international travel or more recently, a global pandemic, consumer behaviour has significantly changed and it’s time to face that fact and start adapting, now!

Below, Alex MacPherson, Director of Solution Consultancy and Account Management at Manhattan Associates discovers five key ways the pandemic changed the retail industry and a brief description about why looking back is so very important to moving forward in the right direction when it comes to retail and the supply chains that underpin it.


First and foremost the pandemic was a human challenge. Sure it impacted industries, economies and governments all over the globe, but it was people that felt its effects so deeply at home and in their professional capacities.

One of the brighter silver linings from the pandemic has been the emphasis it shone on the importance of people overall – especially in the retail and supply chain spaces.

This shift in thinking around employees is leading to higher wages, more workplace engagement and smarter, more intuitive systems, not to mention a greater awareness and discussion around the mental and physical well-being of employees in stores, warehouses and delivery routes

It has provided a good dose of humanity and recognition for the people who have been (and indeed remain) responsible for keeping commerce running in the face of huge challenges.


Customers shopped online before the pandemic, but a desire to limit physical contact with stores unleashed new demand and encouraged retailers to roll out new options, resulting in new consumer habits and expectations.

While consumers around the globe continue to shop at stores, increasingly they also schedule click and collect, and even sign up for store-to-door grocery delivery services.

Retailers also ratcheted up their use of stores as fulfilment centres too. Gap and Belk both said they doubled down on turning stores into mini warehouses (or dark stores), particularly when people couldn’t visit malls to shop. While Target said it used stores to fulfill more than 90% of its second-quarter 2020 sales.

As consumer behaviours continue to evolve, expect ecommerce, along with the blended, hybrid options for fulfilment (that many brands are now offering) to only gather pace. What you need to do is ask; ‘are we equipped to deal with these new hybrid customer expectations?’


Given the safety concerns of the last two years, consumers opted for contactless cards and it turns out they liked it! Mobile payments and even options such as ‘pay-by-link’ over handling cash have grown in popularity shifting the emphasis from touching traditional POS terminal keypads.

Several players acted quickly in response: Mastercard which reports that 75% of its transactions in Europe are contactless, raised the limits for contactless payments across 29 European countries to remove the need of a PIN; Walmart modified self-checkout stations to make these systems contactless; and Publix Super Markets sped up tech transition to accept contactless payments ahead of intended plans.

Prolonged social distancing has further ingrained this ‘touch-free’ consumer habit, which now seems firmly here to stay.


As the boom in online shopping continues, the last-mile delivery market has matured. In the UK, click and collect pickup has become a mainstay for many retail brands, with many more expected to follow suit in 2022.

While retailers could lose out on upsell from consumers browsing their physical stores, retailers need to explore more pickup options in order to find a way to control delivery costs that cut into margins.

Brands also need to reimagine the fundamental function of what a store is and what it can do.  Stores are no longer simply the brand showroom for customers to browse at their leisure, now they are fulfilment and returns hubs for all manner of goods purchased in every different way you could imagine, including; online, from different store locations, in-app or maybe even via social media.

The pandemic caused retailers to rethink the philosophy behind the store: the result, todays stores are supply chain hubs (including all the backroom inventory and fulfilment technology needed to make it run smoothly), rather than simply the traditional retail showroom with its rather perfunctory capabilities


With less literal face-to-face time, retailers have had to think long and hard about the impact these massive changes have had on their customer bases and the effects on the customer relationship.

For example; how do you maintain trust in your brand and your products and services when everything has to be done remotely or virtually? How will you reset expectations once the challenges of the pandemic have passed? Or indeed, how will you recover the customer experience in the future?

The pandemic changed the ways brands look at, build and foster customer loyalty, to the point where shoring up the customer relationship has now become just as important as shoring up the bottom line.

However, this is not without its own challenges and the need for added investment in technology and processes is important.

Pulling together increasingly disparate online threads in order to create an accurate profile of a digital customer is a must, while having this information available in a unified system of backend supply chain and customer-facing retail solutions is the key to customer loyalty (and also increased sales) in a post-pandemic world.