nCoV: Boon for online retail, bane for brick & mortar

Undeniably, hate (US-Iran feud, US-China trade war, etc.) obtains in the world today.  The good thing is, it is temporarily trivialized by the novel-Coronavirus (nCoV).  The bad thing though is that this virus generated more apathy than sympathy. Sadly, these are all obtaining even in the month that is hailed as that of peace, love and understanding. The month of February.

Indeed, through the years, the emphasis and the common understanding by most of us is that while this is truly a month of love, it is just a month for couples or lovebirds. The reality, however, is that, it is also for families, friends and enemies as well. Thus, on Valentine’s Day, when people tend to become more demonstrative to their loved ones, money flows and spending go up, as expected.

Indeed, Valentine’s Day was first associated with romantic love. However, it was only in the 18th century when it was associated with gift giving. Then, lovers tend to be more demonstrative by presenting flowers, offering chocolates or any confectionery and sending greeting or valentine cards. And as years pass, the bow and arrow carrying winged cupid was invented to symbolize one’s fall for another.  So that, in recent past, in times like these, vehicular traffic worsens and foot traffic doubles as consumers devour department stores and souvenir shops for gifts they longed to give for themselves and their loved ones.

Today, however, things could be different. Not because of the US-Iran feud but because of the nCoV scare. With global advisories telling citizens of the world to avoid crowded areas, seemingly, the bricks and mortar businesses are badly hit.

This is quite sad. Why? The size of the gifting market (in all special occasions) is really huge.  Traditionally, garments, toys, cakes, pastries, chocolates and hams are among those selling briskly globally.  These scenes and experiences are also replicated all over the country.

Today, however, the gifting market has widened a bit. Apart from these traditional presents, personalized gifts are in and are certainly on the rise. The research study by Technavio (a leading technology research and advisory company with a global coverage and focuses on emerging technology trends that can shape the market) on the global personalized gifts market for 2017-2021 “provides detailed industry analysis based on skill and technology (hand decoration, embroidery, engraving, printing, and carving), product (photo and non-photo personalized gifts), retail format (in-store and online), and geography (the Americas, Europe, APAC, and MEA).”

It also says in its report that as it gets to as far as a compound annual growth rate or CAGR of 8.5% (by 2021), the “global personalized gifts market size is expected to reach US$ 31.63 billion by 2021.” It further said that “the Americas is predicted to be the leading regional segment, generating both highest revenue and maximum incremental growth through the forecast period.”

“Seasonal decorations, such as decorative cups, plates and napkins, account for a major portion of the total revenue generated in the market. Also, the growing home and wall décor market have also been aiding in the expansion of the growth opportunities for personalized gifts.”

On these developments, Technavio analysts singled out at least three key factors that are contributing to the growth of the global personalized gifts market. “These are growing gifting culture and increasing demand for seasonal decorations; innovative gifting solutions and advancements in technology; and the expanding online retail, kiosks, and online distribution channels.”

Actually, we are also experiencing the same in the country. On special days like this or seasons like Christmas, while some department stores’ wears and apparels sections are devoured by panicking patrons, online retail traffic, likewise, shoots up.

Presently, however, the situation could be different. As the nCoV continues to create havoc globally, expect this development to hasten the shift to online retail or online distribution channels, not only for gift items but for all goods, in general. Expect the bricks and mortar businesses therefore to take a hit, probably, permanently.

Notably, these factors are likewise obtaining in the country today. More likely, our bricks and mortar businesses will, likewise, take a hit. However, we are also known to be creative (for gift items and other products) and tech savvy (for online retail and online distribution channels). Therefore, with the natural growth in online retail and online distribution channels and the hastening of the shift towards these alternatives brought about by the nCoV scare both locally and globally, obtaining a sizeable slice of the pie should come naturally.