Coronavirus and retailers: The story so far
by Lauren Cassidy
March 19, 2020
But what has this meant for retailers? Is it just the high street that stands to suffer or are eCommerce retailers feeling the squeeze of current demands? It’s important for retailers to be wise to the facts but distance themselves from unsafe or ethical practice in light of recent events.
Here’s the lowdown on the story so far.
The eCommerce Boom
As cases increase in countries all over the world, it appears that lockdown has resulted in a boom for online stores. With people confined to their homes, the ability to shop online has become the ideal – which is good news for eCommerce traders.
Grocery stores are doing all they can to ensure that operations continue as smoothly as possible such as restricted purchases and reserved shopping hours for the elderly. They are also expanding “click and collect” services as a way to utilise online ordering but without the need for home deliveries. While eCommerce has transformed the way retailers in multiple sectors do business – it appears the demand for eGroceries has shone a light on a lagging industry.
A decade ago, it was thought that 40% of the grocery market would have moved online by 2025. However, one industry body revised this figure downwards to just 7.7% by 2024 - but why is this?
Ciaran Bollard, CEO at Kooomo, believes that unprecedented circumstances could mean much more forward-thinking in terms of the online supermarket;
I think the impact of coronavirus on the world is certainly fuelling conversations and accelerating the desire to innovate eGrocery. We can all see the incredible queues that are happening outside the big 4 grocery retailers. So I think we will see real change happening here, particularly across the discount grocery retailers.
This already appears to be evident as Grocers such as Ocado report massive jumps in their online orders as Covid19 becomes more widespread.
It’s no secret that China is the worlds largest exporter of goods – in fact, they are responsible for a third of global manufacturing. Therefore, the knock-on effect from the halt in manufacturing and exporting has been felt worldwide as whole products or parts become more scarce in supply.
Amazon has revealed it’s out of stock on household items and deliveries are delayed due increased demand – even for their Amazon Prime customers who are used to a delivery period of 1-2 days
Almost a quarter of British retailers reported severe disruption to their supply of goods. With that said, only 7% of retailers have the flexibility to switch their suppliers. So what can retailers do? Ciaran Bollard believes that those who have already shifted to omnichannel online platforms will be at an advantage.
“Investing in Omnichannel and having in-store stock available online will help ease the impact of no footfall on the street. I know some retailers are considering resupplying the main warehouse with shop stock to help fulfil demand.”
As the days unfold and businesses learn from their counterparts in other countries, they are taking precautionary measures to delay shortages – and where production is local, Neilsen predicts that replenishment will likely turn around in as little as 3-7 days.
Panic buying has initially driven consumers in store to stock up on essentials, but as lockdowns and social distancing comes into effect, we will be seeing less and less footfall on the high street. A quarter of people are already avoiding shopping centres and have opted to move to online shopping in order to remain isolated.
Apple, Nike and Urban Outfitters are three such big name retailers who this week have announced their temporary closure of stores, with other retailers set to follow suit in the coming days.
Bricks and Mortar stores supply a certain level of customer experience and social gratification that have now been, in a sense, outlawed due to social distancing. The focus now moves to their online store and managing these massive demands. Ciaran Bollard has gone on to advise on how best to retain customer satisfaction in these problematic times;
Where the supply chain is affected for home deliveries it’s really important to change the messaging on your online store to notify customers of any delays. Customers are willing to have a longer delivery window to avoid going to stores, so make sure communication is transparent and as accurate as possible.
But it is very important to keep your communications with customers timely and up to date as the situation changes. So updating your delivery and express delivery timings on your online store is crucial to avoid disappointment. This will help alleviate fears and build trust in a difficult time where we are in uncharted waters.
No consumer is expecting regular service in light of recent events – but if you can communicate clearly, accurately and fairly you are less likely to lose out on consumers to other brands who are before you in the replenishment queue.
Overcoming Covid 19
As customer experience becomes a concern for retailers both on and offline, Covid-19 has encouraged certain businesses to take matters into their own hands and come up with innovative ways to reach their audiences.
Take Georgio Armani for example. As the situation has grown more serious in Italy, Milan fashion week was one of numerous events that had to be cancelled amid safety concerns. As a way around this, Armani proceeded to host the runway show in an empty warehouse – live streamed for interested buyers.
Forbes discusses the need for retailers to adapt their customer experience virtually, and discusses the uptake of “virtual demonstrations”. Tech companies are implementing more support for “remote working” – workplace software companies like Zoom, Microsoft, and Google have even offering their software for free and taken measures to ensure they can meet the growing demand for remote working.
In terms of supply, some countries have already begun self-sustaining due to the trade climate in China. With this in mind, eCommerce has effectively prepared supply chains in certain countries, such as the U.S., that can better deal with coronavirus.
The situation with Coronavirus is changing on a daily basis with unprecedented circumstances for both retailers and consumers alike. In order for retailers to increase their chances of survival they will need to make sure they are completely transparent when communicating their situations to customers, supplement warehouse stock with in store stock where possible and facilitate the safest possible conditions for staff to carry out their daily responsibilities. Small changes are having a significant effect – and eCommerce is taking the reins in ensuring safe and sustainable trade.
Posted by: Lauren Cassidy