The recent news that online grocery sales have more than doubled year-on-year is not exactly surprising given the ongoing COVID-19 crisis.
What is perhaps more significant is that the number of households purchasing their groceries online has also shot up in the past 12 months, from 4.8 million in 2019 to 7.9 million in the past month – approaching one third of all UK households.
Whether they’re entirely reliant on online deliveries to meet their grocery needs, or they’re dipping their toe in the water for the first time, the data shows that millions of households are now embracing ecommerce for basic essentials – the goods they simply cannot do without.
Familiarity breeds repeat behaviours, and while doubtless some shoppers will return to the supermarkets as the lockdown eases, the news augurs well for the long-term expansion of the UK’s ecommerce sector.
Ecommerce looks the better option
For years retailers everywhere have been battling falling footfall, business rates, commercial rents and a myriad of other challenges. What COVID-19 has done is force the hand of many of these businesses and provoke a necessary – and arguably long overdue – shift into ecommerce as the only viable means of short-term survival.
Now, having entered the online shopping arena, there’s an opportunity for retailers to rethink their wider operations entirely. For example, do they even need a physical presence? It’s a compelling question given the high cost of such overheads, made all the more attractive given the likelihood that employees across the country will be reluctant to travel into busy city centres even once the lockdown is fully over.
The question of physical working and operating spaces may look slightly different for each retailer, but there is no advantage to maintaining the status quo given the extent to which COVID-19 has changed the retail landscape.
Overcoming the barriers to entry
While it is a great time for retailers old and new to make the move into ecommerce, it’s a mistake to assume that this shift can be achieved in an entirely pain- and disruption-free manner. Operationally organisations need to be well-prepared, addressing everything from product availability and supply chain readiness to customer support and payment processing. During the current crisis, many retailers have suffered due to vulnerabilities within their supply chains – for example, over reliance on Amazon, or dependence on suppliers that closed their doors early and furloughed their staff.
Given that few retailers will be able to fulfil orders themselves, they need to be 100% confident that their fulfilment provider is up to the task. In the current climate, this mean fully COVID-compliant and able to demonstrate appropriate contingency plans in the event that there are changes to the current Government guidance or virus threat level.
In our business, amongst other safety measures, we made sanitiser and facemasks available to staff and separated work spaces as soon as the extent of the crisis began to become clear, and this will remain standard in the future. We don’t know how long COVID-19 will be an active threat in our lives and so we’ve built our operations with staff/customer health and safety front of mind from the outset.
Setting the standard
During the crisis, online shoppers have been admirably tolerant of any teething problems endured by retailers new to ecommerce or overwhelmed by the volume of orders. The evidence suggests that these attitudes will not be sustained, and again, ecommerce providers will need to factor this into the equation in the weeks and months ahead.
Firstly, the high street is now starting to open up once more. Outdoor markets are already back up and running; other shops will soon follow suit. Secondly, there is far less room for error when it comes to grocery deliveries. The occasional product substitution may be tolerated, but anything more fundamental will prove extremely damaging. And of course, the more shoppers become accustomed to the delivery standards set by online grocery shopping, it will likely raise their expectations around ecommerce as a whole.
Identifying permanent trends
No one can say with certainty which of the current consumer purchasing trends will be sustained in the post-COVID world. The ecommerce sector will be larger and more diverse than it was pre-crisis, but every retailer still needs to consider the long-term relevance of its offering, being careful to distinguish between short-term purchase habits versus underlying customer behaviours. For example, will households keep up the current baking craze once everyone is back at work and a wider variety of leisure options are open to them? The ability to navigate these complex questions will determine which retailers succeed and which struggle in the competitive ecommerce landscape.
Quality of service
There are growth opportunities aplenty in the ecommerce sector, but that does not alter the level of uncertainty with which everyone will have to contend as we move forwards.
On a fundamental level, we’re still not clear as to what the shape (and state) of our economy will be once the pandemic subsides. However, with 41% of people now shopping online more frequently, the onus is now on both ecommerce providers and the third-party fulfilment industry to provide service levels capable of seizing the opportunity and permanently embedding these behaviours.
Martin Bysh is CEO of Huboo, a UK-based multi-channel fulfilment service for e-commerce businesses of all sizes.