As a result of COVID-19, 60 per cent of UK retail companies are overhauling their business strategies, with 42 per cent looking to invest in digital.

This is according to a survey commissioned by LiveArea and conducted in May by Opinium among 500 business managers across various industries in the UK.

It found that online commerce (62 per cent) and IT infrastructure (53 per cent) will serve as the key components of retail investment. Agility will also be crucial, with almost half (45 per cent) considering outsourcing IT, and 26 per cent prioritising the marketing function.

The study showed the current situation could cause 38 per cent of retailers to close before the furlough scheme ends in October. While two-thirds (65 per cent) have stopped operating and six per cent have closed permanently, the impact of the pandemic is set to grow over the coming months.

Retail companies are most concerned about the drop in sales (66 per cent), followed by the end general economic downturn (61 per cent).

In terms of measures to limit the impact, retailers most desire clarity (55 per cent) from the government, followed by increased intervention and financial support, including access to grants and loans (51 per cent) as well as payment holidays (33 per cent).

“The pandemic has shone a light on the glaring vulnerabilities in the industry, from tight margins and weak supply chains, to ineffective customer communication and delivery,” Elliott Jacobs, EMEA commerce consulting director at LiveArea.

“No one will know the exact impact on consumer behaviour, so businesses need to build a strategy that can adapt instantly," he continued. "Fundamentally, that means following a digital-first approach – those unable to make the shift are unlikely to see the end of 2020."

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