Originally published on Medium.

<aside> 💡 To learn more about the problems, solutions, and relevant startups related to the impact of COVID-19 on the retail industry, the full report is embedded below.

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As the COVID-19 pandemic has swept across the world, it has impacted almost every aspect of the retail industry, accelerating existing trends and giving rise to new trends in the industry.

These impacts can be divided into two categories: the point of sale and the underlying supply chain. We can think of the point of sale, whether it’s a brick-and-mortar store or a website, as the front end of a retail operation, with the supply chain as the corresponding back end.

The Front and Back Ends of Retail

The front end is changing faster than ever. While the front end once exclusively meant brick-and-mortar storefronts, e-commerce penetration is now at an all time high. COVID-19 has supercharged the growth in e-commerce — from 2019 to 2020, e-commerce’s share of total retail sales grew from 11% to 14.5%, a 32% change.

Meanwhile, the back end is more important than ever as the digitization of retail is accelerated by COVID-19. Supply chain management encompasses activities spanning from manufacturing goods to customer delivery. Both small businesses and large enterprises must source raw materials and components, manufacture & deliver goods, and manage return and customer service processes. Traditionally, operational efficiency comes from experience dealing with trial-and-error. While this is still the case, technology is steadily automating away inefficiencies in exchange for data-driven and robust components to growing supply chains.

As global retail grows from $25T and e-commerce rapidly increases its share of that market to over 14%, both the front end and the back end are well positioned for innovation and investment.

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Overview of Problems Facing Retailers

In the next section, we detail six trends and business problems in the retail space that have gained importance in our post-COVID world. We label each problem with:

1. A priority designation (low, medium, or high) depending on how critical it is to retailers
2. An estimation of the size of the problem in dollars
3. A stickiness designation (low, medium, or high) depending on how persistent the problem will be after COVID-19 has run its course
4. An indication on whether the problem was caused directly by COVID (versus if it had any significance before COVID)

Below is a chart that summarizes each problem along with their designations.

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