What's been happening to ecommerce during first few weeks of COVID19 lockdowns?
The spread of Coronavirus around the world has deeply impacted our health and our businesses; not only have our work patterns and routines been forced to change, but so too have our coping mechanisms, both personal and practical - and we've had to do it fast. We're already seeing an increase in speed, agility and creativity, as well as a much needed focus on solutions (just look at the UK’s Nightingale Hospital).
Brands are prioritising people and the environment over profits, finding ways to connect with their consumer on a deeper level especially through supporting mental and physical wellbeing on social and digital platforms. There are a plethora of free products, subscriptions, classes and tutorials, as well as online events to participate in,
Strict social distancing measures have meant we have all had to change how we shop, work and interact. Given the speed at which this has happened, and the length of time it could last, habit changes are inevitable. The big question is, will these habits remain [and] which show signs of enabling future business growth?
Many of the UKs biggest supermarkets have been fighting to cope with the additional pressures put on them from panic buying. However, they have been (relatively) quick to find solutions at scale, from implementing ways to protect their staff & customers (such as screens at tills, trolley disinfections, limits on the number of items each person can buy and strict guidance on the number of people allowed in a store at any given time) to finding solutions for the more vulnerable, elderly, medically at risk and key workers with special shopping hours being put in place - some of which could possibly remain. There has also been a lot of work done on improvements to online grocery shopping systems and delivery slot capacity (although there is still much to be done to cater for the large volume of requests).
“Retailers and manufacturers are making enormous efforts to keep goods flowing through the supply chain and are well used to handling large increases in demand…” (IGD).
Social distancing has had a profound effect on restaurants who have been quick to offer takeaway and delivery options to ensure they can still service their customers
“In most countries where people are on lockdown, restaurants can still send delivery orders through popular mobile applications” (Source: semrush)
Deliveroo (UK) has had 600 new restaurants join them since January 2020! (Source: The Drum)
This time of forced isolation has meant more businesses (and individuals) have needed to find a solution to aid remote working, and there's no doubt that platforms such as Zoom, Skype and Slack are reaping huge benefits. Remote solutions have been found for jobs that previously were thought to be impossible to do from home. Additionally, FaceTime and apps such as HouseParty have been growing in popularity from people trying to connect in social and fun ways with their friends and family.
Many fitness brands have seized the opportunity to strengthen relationships with their clients and both online and offline providers have been finding creative ways to stay relevant. Cue Joe Wicks spotting a great opportunity to run free P.E. classes to school children every day.
Let’s not forget that many businesses who may be seeing losses are also thinking more in the long term. Brompton bikes made 50 bikes available for staff at Barts Hospital Trust in London and is set to do more. This is a bold and savvy step.
Free access to many online courses, subscriptions and e-learning has been granted to the public to enable their transition to working at home alongside managing family and child obligations (link to our list of free resources).
White goods & appliances, alongside home office equipment saw massive spikes as people started to panic buy goods in response to the virus outbreak. Gaming consoles have also been a popular purchase as parents try to alleviate the threat of their kids/teens boredom!
“…while sales of electricals and DIY products were up 42% and 14% respectively, sales of clothing fell 27% and demand for footwear slumped 38%…” (Source: The Guardian: based on web-sales of 200 retailers during week 1 of enforced isolation)
As the threat of having to stay indoors for months on end has become more real, gardening - as food production, hobby and therapy - has meant an increase in the online purchase of seeds; some retailers have reported a 10x spike in demand (inews.co.uk). Sadly this has come at a cost, with garden centres facing the threat of throwing away perfectly good plants due to store closures.
While supermarkets have been overwhelmed and experienced shortages in essential items (loo roll-gate!) and delivery slots, independent shops and small businesses (butchers, farm shops, local dairies, greengrocers etc) have been agile enough to manage demand and plug the gaps. Many local stores quickly offered collection and delivery services, and some have already started to look at ecommerce options to sustain them into the future. This, as it did in China, will likely solidify community spirit and support and (hopefully) continue once this period of change is over.
There is no doubt that airlines are struggling to cope with the decline in demand. EasyJet, Ryanair, Norwegian Air, British Airways and American Airlines have all cut (& in some cases totally cancelled) their flights into April 2020 and beyond, and many staff have been laid off or forced into unpaid leave. How quickly people will feel comfortable about travelling again is of course unknown. However if you take an optimistic approach, people are likely to want to get ‘back out there’ once the ban has lifted - in fact they may be desperate to do so.
Restaurants, Bars, Cafes & Clubs are all in the shadow of a crumbling sector which ‘could be facing bankruptcy’. Carluccio's has already seen the biggest declines in London and has said the Government has effectively 'condemned' them 'to death' (The Mirror) and catering giant Compass Group have also seen great losses. However, many local businesses are taking control of the challenge offering take-away & delivery options to keep them afloat.
There is no doubt that those within events & ticketing industry (concerts, festivals, conferences & exhibitions, travel and fundraising) are feeling the pinch with most already being cancelled up to the summer. The Geneva Motor Show has already announced it will lose over £2bn through cancellation of the event; Glastonbury and other UK festivals have been cancelled, sporting events such as Wimbledon are no longer happening and charities are suffering as they have become increasingly reliant on fundraising drawn from their events calendars. Whilst for some this has been seen as the death of the industry, for others' it's calling into question whether some events (such as large exhibitions) are even necessary in this digital age.
Whilst the forecast within the luxury sector looks bleak there may be a small trace of light. China has seen an uplift in certain luxury goods as consumers look for the ‘feel good factor’ (Mintel). Whist these items are not a necessity, they do make people feel positive - especially whilst they’re at home and forced into a ‘slower pace of life’. With the potential of increased numbers of people having more time to spend on themselves, luxury food and wellbeing products could see growth opportunities. Fashion and celebrity will have a tougher time, but all must find a way to adapt to the change that is coming in order to survive.
We’ve seen immense courage and innovation in response to the disruption being caused so far, with some sectors facing all time lows, yet others seeing great highs; and whilst no-one really knows how long this will all last, it is important to remain optimistic and balanced. Markets have been severely disrupted, as has financial confidence, and although this will likely continue for the foreseeable, [hopefully] it will be a short term hit for most and with the UK Government stepping in to offer furloughing, it should mean that when recovery begins, UK consumers and businesses will be ready.
In the end it will come down to the survival of the fittest. Businesses will need to keep an eye on their longterm strategies throughout this difficult period, building good will and connecting with their consumers, so that they are ready to gallop out of the starting gates once the restrictions are lifted.
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