Will COVID-19 change the face of eCommerce forever?

Tom Williams
Tom WilliamsHead of eCommerce
12 May 2020

 

COVID-19 has certainly been challenging for retailers, in so far as it has caused an unpredictable shift in not only buying behaviour, but supply chain management too. Whilst the initial peak where consumers stock-piled across grocery and electronics has passed, the effect has been profound.

Due to social distancing and lockdown requirements, retailers have been forced to change their strategies to help keep up with supply and demand, and in my view, this could have an impact on commerce – notably online – for years to come. I also think this could be a positive for the industry as this period has certainly enabled a re-evaluation of processes, which could help everyone eventually come out stronger on the other side.

But what practices will change?

1. Local is the new reliable

Normally, retail supply chains are super slick – running smoothly and to set timescales. However, the COVID-19 pandemic has changed that, with the sourcing of materials increasingly difficult with international shut-downs and a reduction in the number of warehouse staff able to work. This has caused retailers to shift to more local suppliers who can guarantee delivery of necessary parts. This is no bad thing – the UK is very import heavy and working with local partners will have knock on benefits; such as reduced environmental impact and safeguarding against currency fluctuations. Security of supply is vital as no materials results in no products, so UK businesses may see an upturn as retailers source closer to home.

2. The environment might catch a break

Another shift in mindset has been seen with regard to delivery. Previously, delivery was a big differentiator, with those able to offer next or same-day delivery winning the hearts and minds of customers. However, coronavirus has reset consumer mindsets – they appreciate the strain warehouses and retailers are under, and therefore happily wait two weeks or more for a delivery, even when paying for Prime membership. The challenge now for retailers is to communicate how longer lead times can benefit consumers long-term. For example, it’s cheaper and it aids the environment with fewer trucks and vans making regular deliveries. Grouped deliveries could be a trend that booms, where shoppers are rewarded for waiting longer for their goods, to help retailers manage distribution and delivery more effectively.

3. Small independents will boom

Availability has not just affected manufacturers; consumers have also had to get used to more streamlined product offerings as retailers try to balance the wellbeing of warehouse staff and customer demand. Resultantly, we may well see a boom in boutiques – offering narrower but quality product ranges. With many used to now sourcing alternatives to their preferred products, consumers will likely be more open to shopping with ethical retailers who support the local economy. The pandemic has really seen the UK pull together, and I expect this sense of community to continue for some time.

Whilst the pandemic has brought about many negatives, there are pockets of opportunity for retailers to consider as we become increasingly accustomed to the ‘new normal’. It’s become clear that consumers are happy to accommodate and make concessions, especially when the reasons are clearly communicated. Therefore, retailers can take this opportunity to look at their strategies and consider how some of these impacts can benefit the business longer term. Whilst it may seem like an immediate hit, it could be beneficial in terms of lead times and reputation.

Out of the ashes rises a phoenix – retail will recover and come back stronger – that I have no doubt.

 

 

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