Retail sector turnover grew by almost four per cent during the first year of the COVID-19 pandemic. However, COVID-19 treated commerce industries very differently. The growth in last year’s turnover is not visible as growth in the number of people employed in the commerce sector or as new companies in the commerce sector. Instead, they continue their downward trend. The pandemic helped online retail reach record figures. Ensuring purchasing power, competence and entrepreneurship is key when advancing to the time after COVID-19.
Despite its fairly weak purchasing power, Russia is one of the largest e-commerce markets in the world, which is still developing and maturing. The popularity of digital shopping has increased rapidly in recent years, and the coronavirus pandemic has spurred the development of payment methods and logistics. Russian consumers are still different from Nordic consumers in many ways, and reviews by peers in particular are important to them when making purchase decisions. Even though China dominates cross-border digital shopping, purchases from other countries are becoming more common. Russian market platforms can also offer new growth opportunities for Finnish online stores.
The coronavirus crisis gave a record-high boost to the sales of electronics, hardware and daily consumer goods in places, but many branches of the specialty goods trade suffered. Simultaneously, the loss of retail trade jobs has accelerated. The potential second wave of the coronavirus towards the end of the year could cut the predicted 2.5 per cent growth in retail business in half and speed up the loss of jobs. Bold and comprehensive structural reforms are called for to eliminate the incentive traps tormenting the commerce sector.
The use of social media has changed during the COVID-19 epidemic, and so has the use of different types of digital devices. These changes can be seen on the consumer’s path to purchase right from its start, for example in how people get impulses to buy. Digital buying has also changed, both in terms of the devices used and in terms of the products bought. Consumers have moved from buying clothing on digital platforms to buying electronics – both in physical stores and online. This report is based on data from an international consumer survey by Statista.
As the coronavirus crisis continues, even more consumers have cut down shopping in stores. This is reflected particularly clearly in specialty goods stores, department stores and shopping centres in the capital region. At the same time, the number of digital shoppers has grown briskly in a matter of weeks. Especially families with children shop more online, but also the oldest age groups do more digital shopping than before. Direct targeted support measures are urgently needed to help companies currently struggling with problems caused by the coronavirus crisis survive during the worst period.
The Finnish Commerce Federation and Service Sector Employers Palta propose a salary subsidy to shorten temporary layoffs and support the restarting of operations. The subsidy would be targeted at companies that have suffered the most due to the restrictions during the coronavirus crisis. Over 150,000 Finns have been laid off temporarily.
The acute coronavirus crisis has dramatically decreased shopping in stores, and it is evident particularly as a crash in sales in specialty goods trade. However, digital shopping is increasing and one-fifth of consumers intend to make more purchases online as the crisis continues. Consumers in older age groups are also willing to try online shopping, and do more of it. The pandemic has already caused a wave of layoffs and dismissals in the commerce sector, and the Finnish Commerce Federation is calling for urgent direct support for companies.
The Government’s decision from today to increase corporate support was welcome as such, but its size and content were a disappointment for the commerce sector. Stores are suffering as the demand for specialty and other goods has collapsed, and the direct support they desperately need was not included in the Government’s decision. The Finnish Commerce Federation is worried that the coronavirus pandemic will cause a wave of bankruptcies in the sector that employs the most people.
The survey, conducted by the Finnish Commerce Federation for member companies, reveals that almost two fifths of commerce sector companies report a slump of over 50% in turnover and, for more than a quarter, the drop has been in excess of 70%. More than 50% of commerce sector companies have reduced the number of employees, in most cases through layoffs. The Finnish Government’s support measures are ineffective in tackling the problems in commerce.
These guidelines cover some of the common questions concerning employment relationships in relation to the ongoing coronavirus situation. The guidelines are updated regularly. The Finnish Commerce Federation's employment advisers are available as normal and ready to answer any questions that member companies may have on this topic.