While the government eases restrictions and reopens the economy, the retail sector will take time to recover as consumers continue to hold fears over COVID-19, an industry association has said.
The Indonesian Shopping Center Association (APPBI) stated that it expected shoppers to continue buying their basic necessities when visiting shopping malls and then returning straight home, as has been observed thus far during the pandemic, instead of browsing through shops for leisure, as is the case in normal times.
“People are not going to flock to shopping malls straight away because they will still be worried about the pandemic,” APPBI chairman Stefanus Ridwan said during a MarkPlus online webinar on Tuesday.
He added that the number of shopping mall visitors had dropped since the country’s first two COVID-19 cases were announced in March. During the pandemic, no less than 190 shopping malls across the country have been temporarily closed, APPBI data show.
Meanwhile, starting in June, the government has begun to relax the large-scale social restrictions (PSBB) that were implemented to contain the virus, allowing shopping centers, among other facilities, to open gradually. The Jakarta administration stated that all shopping malls in the city would be allowed to reopen on June 15.
However, Stefanus said customers would still need time to adjust to the health requirements of the so-called “new normal”, including wearing a face mask inside malls, practicing physical distancing and using cashless payment.
The adjustment period for customers will take around one-and-a-half years, Stefanus added.
Retail sales have dropped 64 percent, according to data from the Office of the Coordinating Economic Affairs Minister.
Meanwhile, to anticipate new customer behavior, APPBI has urged retailers to look to digital channels to reach consumers.
During the health crisis, Indonesian consumers have relied on online delivery platforms to purchase groceries and food instead of visiting supermarkets.
Minimarket chain Alfamart marketing director Ryan Alfons Kaloh said that during the PSBB period, 3,000 of Alfamart’s 14,000 outlets nationwide had catered to online orders as a strategy to retain customers.
“We have to understand our customers’ needs. What if there is another period of PSBB because of a second wave like in South Korea? Well, we must be ready to change and adapt again,” he said during the same webinar.
Meanwhile, Boga Group, which operates more than 150 restaurants in major cities across Indonesia, has provided online delivery services since the government called for shopping malls to close in March.
The group’s president director, Kusnadi Raharja, said it had made major changes in its business operations during the pandemic, including transforming almost of all of its restaurants into “cloud kitchens” that cater to online orders.
While the group still plans to resume dine-in services at more than half of its restaurants, the rest will continue to cater to online deliveries going forward, including offering ready-to-cook meals, Kusnadi said.
“Switching to online deliveries or contactless dine-in services has been quite easy, as we already have the technology, such as online menus and cashless payment. It is just a matter of accelerating the adaptation,” he said.
Ready-to-cook meals are among the products that have seen an increase in popularity during the pandemic, while coffee shops have been selling coffee by the liter to keep their businesses afloat.