With the arrival of a second wave and subsequent lockdown which catastrophically collide with peak shopping season, Covid-19 very likely will present an even bigger challenge for retailers and customers the second time around if they are not prepared.
The pandemic is a turbo-charging change as it drives shop closures in the UK to a new record. Many shops disappeared from high streets across the country in the first half of 2020 as the Covid-19 lockdowns hammered the retail sector. At the same time more people than ever now shop online.
For local authorities, it’s now critical how they respond to this significant and growing decline in store occupants. Whilst many city centres remain quiet, the pandemic has prompted something of a resurgence in local high streets with people increasingly wanting to shop locally, especially if they’re working from home.
Online shopping is predicted to be significantly higher this year than in any year before, likely as much as a 65.1% increase (Sept 2019 v Sept 2020 – BDO). As a result, shortages of many items are inevitable and delivery services and the greater supply chain will struggle to keep up with demand.
Companies have been preparing for the busier-than-usual period we are approaching over the next months by hiring a fleet of vans and drivers to fulfil orders and guarantee that deliveries will be made on time.
When it comes to supply chains, we know that there’s a really robust carrier logistics network in place across the UK and we believe they will as a whole cope with the peak season ahead but consumers can expect long delays.
Even before the lockdown was announced Amazon had warned the tilt towards online shopping meant even it was going to be “stretched” to meet the huge volume of orders expected. Similarly couriers were “already overloaded” and the toy industry would face a struggle to get toys into children’s hands in time.
The shift towards online shopping this Christmas would now be of epic proportions and there were serious doubts over whether the industry could cope. There will be a strain on websites, warehouses and, crucially, delivery networks.
The stocks are in place, supply chains are open, people need to have confidence in this and not panic buy which fuels speculation around supply and demand.
This being said, I think retailers will need to look at the delivery options they offer to customers to meet demands and ensure they have multiple carriers in place to manage their networks effectively. The businesses that will be least impacted by any strain are those that work with multiple carriers to give them contingency so that if one fails you have others to fall back on.
Coupled with the right technology solution, retailers will have the ability to add or remove delivery options depending on capacity. This enables them to provide the range of services that customers want but have the ability to turn delivery options off with one carrier and switch to another should capacity become an issue.
It’s important to plan and plan early, including getting forecasts in with carriers as soon as possible. However, it’s not just about planning, but also preparing for the unexpected with a flexible multi-carrier approach to delivery and returns. In times of great uncertainty, such as peak selling and possible rule changes coming in after Brexit, the ability to adapt fast is the backbone to a successful peak period and challenging times ahead. Retailers must act now to ensure they have the flexibility, agility and correct contingency measures in place to weather the storm.
Panic buying has been rife amid the global spread of the new coronavirus, with consumers around the world stockpiling certain goods. Why do our brains push us to panic buy, even when authorities are assuring the public there is no need to?
The short answer can be found in the psychology of “retail therapy” where we buy to improve our emotional state. It’s about ‘taking back control’ in a world where you feel out of control. More generally, panic buying can be understood as playing to our three fundamental psychology needs.
The coronavirus can be seen as an invisible enemy. We can’t see it. And those who cannot see their enemy, are scared and lose the feeling of control. Those who lose their sense of control, try to compensate for things in order to regain the feeling of control or they buy certain items that may prevent them from getting the virus. So it happens that people buy masks and disinfectants. Or cleaning products to keep their homes and offices clean.
Buying certain things is one such compensation. If others are stockpiling it leads people to engage in the same behavior.
In other disaster conditions like a flood, we can prepare because we know how many supplies we need, but we have a virus now we know nothing about. When you enter a supermarket, you’re looking for value and high volumes.
Faced with the health restrictions decided by the UK’s government in the face of the second wave of Covid19, supermarkets are already rationing certain products to avoid shortages.
Households could be tempted to stock up again on essentials, as before the latest spring containment. UK’s grocery stores have encouraged their customers to shop normally as it has a good supply, with a lot of stocks. However, some British supermarkets have decided to take the lead, by rationing their customers on certain products, to prevent any wave of panic buying, as the industry braces for a potential change in shopping habits ahead of new lockdown restrictions.
However, the message would be one of reassurance. The UK saw how well the food industry managed last time, so there is a very good supply of food. Panic buying creates a tension in the supply chain that’s not necessary.
The sector is reassuring and is now ready to face strong demand, especially as the brands have increased their online offer and their delivery capacities. The supply chains are more solid than before and according to the British Retail Consortium, they do not anticipate problems in the availability of food or other goods in the event of future containment.
When it comes to online shopping, it is important for retailers to invest or keep investing in their ecommerce and supply chains in order to continue to meet strong online demand.
Increasing the omni-channel capacities through innovative solutions like delivery from store or very fast, local deliveries is an important key aspect in these times, especially as customers like the idea of supporting locals.
Over the last few months, key workers have been keeping the country going. Health workers have kept people alive, while businesses are managing to keep the economy going, albeit at a slower pace. But it is supply chain workers who have become the unexpected heroes.
Warehouse and distribution workers became key workers during lockdown, delivering goods to the nation’s doors, at a time when online shopping spiked, and ensuring supermarket shelves remained well stocked. The interest in supply chains has gone through the roof in the last six months. With COVID-19 and people panic buying, the role of the supply chain got some recognition. However, to have a bigger or more lasting impact, there needs to be more awareness about its role.
It is important for SMBs to keep investing in the training and development of their employees, their teams, that are at the heart of any strategy. If the team is well trained and skilled in a company’s culture, products and the sector the company operates, truly, that’s a major asset for any company.
At the end of the day, we all know that consumers are shifting to shopping online and also changing their priorities in terms of the things they buy. So what the pandemic has done is create a step-change in these underlying trends to where they have now become the new normal. Consumers still want and need to physically visit shops if it’s possible and therefore it’s likely then that whatever happens, retail will come out of this pandemic smaller but much stronger.
Fergal O’Carroll is the chief revenue officer at delivery management company, Scurri, with responsibility for sales strategy and execution.
His prior roles include EMEA vice-president for commercial sales with Teradata for eight years; prior to that, he was managing director of business intelligence solutions with Avnet Client Solutions for 13 years.
Fergal holds a BA in Business Studies from the University of West London and is a native of Dublin, Ireland.
