Covid-19: Adapting to a new environment in eCommerce

There has been a considerable increase in eCommerce activity over recent weeks, following decisions by governments around the world to put in place stringent lockdown measures to slow the spread of Covid-19. Yet in many countries, including the UK, it is apparent that current levels of demand are not being adequately met. Fraser McKevitt, head of retail and consumer insight at Kantar notes: “The growth of online [sales] is interesting – it is not as high as you might expect. And the reason for that is that there are capacity constraints on the system. Anyone who has tried to book an online slot in the last few weeks will know it is very hard to get any.”

With even more people likely to be relying on delivery services in the coming weeks as infection rates grow, it’s vital retailers adapt their eCommerce strategies to ensure people get timely access to supplies. So what developments have we seen in recent weeks, and what other initiatives can retailers undertake as the Covid-19 crisis develops?

While it is a distressing period for retail, comfort can at least be taken from the fact that history shows it is times of great need when humans tend to be at their most inventive. As Oliver Banks, director & consultant, OB&Co puts it: “This is the kind of time when things happen, they happen quickly, efficiently, and they happen for the right reasons as well.”

Recruitment strategy

One well publicised way in which some retailers are growing their eCommerce capacity is through recruitment. Recent weeks have seen major retailers such as Tesco, Morrison’s, and Amazon open up a plethora of new job opportunities in distribution centres, warehouses, and more. Although simply adding extra bodies is not the most novel concept, the sheer speed in which the process is being done is unique. “It’s been quite amazing to see how aggressively a lot of these retailers are starting to hire especially in the UK market,” notes Stephen Mader, global head of strategy, insight, and partnerships at Potoo.

Collaboration

Another area in which real progress has been made has been the levels of collaboration between retailers and other parties across the supply chain in order to help grow eCommerce capacity. It is fair to say that were it not for the current crisis, co-operation on this scale would not be occurring.

“I have been very encouraged to see the willingness of collaboration in the UK. I have seen many logistic providers who have a large proportion of their business in the non-food retail trade, or in the food service trade have very proactively been offering their capacity to food retailers,” observes Paul Martin, UK head of retail at KPMG.

There have also been examples of collaborations in which well-developed eCommerce platforms have been made available to other retailers to grow their online penetration. This includes IKEA’s partnership with Alibaba and Zalando expanding its Connected Retail Program.

IT capacity

Yet at this unprecedented time, online merchants must go much further. One key area that has been highlighted during the Covid-19 crisis is retailers' outdated IT systems. Insufficient server capacity on websites is a particular issue at the moment; retailers are of course desperate to prevent their websites from crashing as has happened in the past on occasions such as Black Friday and Cyber Monday, causing lengthy delays for consumers. “I would expect additional retailers to start to invest heavily in this scalable architecture around their website properties,” says Mader.

Another solution to lack of website capacity for retailers is simply to use other platforms, as alluded to above. Jon Maury EMEA managing director at ChannelAdvisor states: “Brands should be spreading their listings across several marketplaces and consider newer platforms such as OnBuy and Fruugo to ensure they can meet customer demand and are reaching a diverse audience.”

Contactless delivery

As the epidemic grows, more people will understandably become wary of any form of interaction. This will necessitate the development of completely contactless delivery. Initiatives from retailers in China, including fast food chains like McDonalds and KFC, in which goods are left in safe locations to be collected, may need to be replicated by other countries in the coming weeks. “China is the play book we’re going to have to look to emulate in the coming weeks and months in regard to this notion of contactless delivery,” opines Carl Boutet, chief strategist & board advisor, Studio Rx (Retail Strategy).

Predicting consumer behaviour

The ability to accurately predict consumer purchasing behaviour and patterns during the Covid-19 crisis will also be vital in meeting consumer needs. Preparing their operations for sudden dips and boosts is going to be especially tricky for retailers over this period, with normal spending patterns completely out of kilter, particularly in regard to food and other essential supplies. Deep insights into where there will be incremental and consistent purchasing patterns has never been more important.

Maury advises: “An advantage for eCommerce retailers is that data-driven insights are already available, but to get a clear picture it’s important to incorporate as much data as possible, such as how various product lines perform on all platforms. These types of granular insights will help inform changes to listings and inventory decisions across marketplaces to ensure customer demands are consistently met.”

Customer communication

Online retailers must adapt their communication strategy with customers at this time; for starters, ensuring they are open and transparent about the challenges being faced. “While in ‘normal’ trading periods, providing the fastest delivery times and greatest inventory options were an ongoing goal. As these services are inevitably disrupted, real-time communications and transparency will keep customers’ expectations set,” says Maury. “Consumers understand that there will be longer delivery windows, delays and limited stock availability, but will lose trust if this isn’t communicated during their path to purchase, and this message must remain consistent across multiple platforms. Being flexible and accommodating in these uncertain times is a guaranteed way for retailers to maintain consumer confidence.”

Additionally, utilising digital channels in ways that emphasises with the current situation ahead of commercial communications is important, especially bearing in mind that customers will be spending much more time online over this period. “Connect and engage with your customers through your social media channels. Be distinctive, be present and be relevant. Your social media feed is your direct way into the hearts and minds of your customers,” says Martin Alden, former head of commercial development, Wyevale Garden Centres.

Whilst the Covid-19 is a huge setback for the sector, it does also provide an opportunity for online retailers if they are willing to adapt and innovate. In recent weeks there have been highly encouraging signs, including incredibly fast recruitment turnaround. But retailers need to go much further to meet the needs of customers in the coming weeks. This includes investment in updating IT systems and developing contactless delivery methods. If such practices can be achieved, one redeeming feature of this whole sorry affair is that online retailers will come out of the crisis much stronger, with the ability to meet customer needs in any situation.