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EDITORIAL What can retailers learn from the grocery sector as Coronavirus intensifies?

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Retailers need to learn from the food sector as we move to temporary ‘online only’ world
Retailers need to learn from the food sector as we move to temporary ‘online only’ world
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multi-channel grocers have so far borne the brunt of how shopping habits have changed. How have they faired and what can the rest of retail learn?

As stress-tests go, this is the big one. You don’t need me to tell you that Coronavirus is making us rethink everything about our lives, not least how we shop. One of up-shot has been that online and mobile retail are seeing usage like never before – and will see only more as we all isolate further – which is great news for online retailers. But how have online services stood up so far?

 

While bricks and mortar operations are seeing a seismic shift in how they operate, having to rethink opening hours, staffing levels, re-stocking and even basic cleaning, for the online side it has become business-as-usual-on-steroids. And it is having an impact.

 

For starters, those multi-channel retailers in the grocery sector are having to factor in how they use their stores and store staff to service a growing number of online orders – growing to a level far outstripping pre-Corona levels.

 

For Waitrose that has meant syphoning 1200 staff from parent John Lewis and Partners to work in Waitrose stores. For Morrisons’ it means recruiting an extra 3500 staff to pick, pack and drive delivery orders.

 

Tesco, meanwhile, is ending 24-hour trading in its large stores, instead closing them at 10pm to give staff extra time to pick and pack delivery and click and collect orders.

 

All supermarkets – whether they offer online or not – are also having to ration how much people can buy in one go. Not because there is any imminent danger of Coronavirus affecting supply, but to try and quash panic buying.

 

On the online front, however, the sudden uptick in orders is an interesting insight into just how ready retailers ecommerce set ups are. For many non-food retailers they are going to have to rely on ecommerce a lot more than ever before in the coming weeks: so what lessons can they learn from the supermarkets over the past two weeks?

 

According to ContentSquare in a review of over 1,400 websites, shoppers are spending 26% more time on grocery websites and are spending 20% more on grocery products online than they did at the end of February. Groceries aren’t the only retail vertical being affected by the virus. Understandably, travel and tourism websites have seen a drop (-20%) in traffic and sales, as well as the sale of sports goods (-28%).

 

Meanwhile, home furnishings and lingerie have seen a spike in sales. Poq has seen revenue for health and nutrition shopping apps grow by 22% since February.

 

British online supermarket Ocado, has struggled to keep up with the increased online demand as its website and app experienced difficulties on the 12th March and it has advised customers to place orders further in advance because more people than normal seem to be placing large orders.

 

Almost half (49%) of consumers are making more purchases online in order to avoid visiting physical store locations according to research from the law firm, Squire Patton Boggs. Logistics specialists, ParcelHero claim that overall ecommerce sales are likely to double from 20% of all sales to 40% as consumers choose to buy more products online.

 

And, as more shoppers buy online for the first time, McKinsey & Company claims that “Customers’ changing preferences are not likely to go back to pre-outbreak norms.”

 

They predict that many shoppers who buy online for the first time because of the coronavirus outbreak will better be able to appreciate and understand the broader advantages of shopping online and will be more likely to maintain this behaviour beyond the pandemic peak.

 

The key for most retailers outside of food and grocery in this new world of online and mobile is going to be how to be found, how to persuade perhaps subdued shoppers to buy and how to stand out online from the competition.

 

This is going to be driven by compelling online and social content and push messaging to mobile, I believe. Tapping into existing customers and looking to cheer them up and, in a week or two, alleviate the crushing boredom that will soon replace the abject fear.

 

The question is how ready are any of us? Over the next few weeks we shall see – and all things we learn we shall be passing on to you. Stay well.

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