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Retailers rely on e-commerce as store networks shut down

Jewellery retailer Michael Hill announced on Monday it has closed its entire roster of stores due to the unprecedented shift in consumer behavior, and rapidly changing government regulations due to the coronavirus panic. 

The business’s online channel, however, remains open for business in a bid to reduce the cost of doing business while complying with public health measures. 

Michael Hill’s actions put people across Australia, New Zealand and Canada temporarily out of work, but also sees it join a growing list of retailers suspending bricks-and-mortar operations and focusing solely on e-commerce.

Daigou retailer AuMake, which closed a majority of its stores in January after recognising the disruptive potential of coronavirus, has since invested additional resources into its online channel.

“The result of this investment has seen the Company’s average daily online sales increase steadily with a one-day record of $237,000 in online sales,” the business said in a statement on the ASX on Tuesday. It’s previous one-day record was $173,000.

AuMake is also making the decision to transfer instore customers to its online channel, in anticipating of having to temporarily shut its remaining four stores down.

As the spread of COVID-19 has continued unabated over the past few weeks, more and more retailers are looking at voluntary store lock downs to protect staff and consumers. 

Patagonia Australia shuttered its stores in Australia until March 27 “out of an abundance of caution for the health and safety of all our retail team members, their families and the community broadly.”

Its online store will remain open however, as will Fjallraven’s, which shut its Sydney and Melbourne stores down late last week. 

According to Susan Park, Fjallraven brand manager for Australia and New Zealand, an increase in online sales are unlikely to counter lost sales from physical locations.

“Worst case scenario, our managing director will take that [loss] on as a business owner,” Park told Internet Retailing.

“There’ll definitely be a cost and an impact.”

Reporting by Heather McIlvaine and Dean Blake.

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