Search
Close this search box.

UPDATED Coronavirus round-up: the retail response to Covid-19

This is an archived article - we have removed images and other assets but have left the text unchanged for your reference

We’re rounding up the latest on the coronavirus as we look to understand how the response to the disease is affecting the way shoppers buy – and how multichannel and ecommerce retailers can respond to that. Today’s update comes as 116 people have been diagnosed with coronavirus in the UK, and one person has died. The official update shows that 18,083 people had been tested, with 17,968 negative tests, as of 9am today.

We’ll add new updates to this piece during Friday and start a new story on Monday. 

Online sales increase amid Covid-19 outbreak

Shoppers have spent more time on grocery websites and bought more online since the Covid-19 coronavirus emerged, new analysis suggests.

Insights platform Contentsquare analysed more than 1,400 websites 1.8bn anonymised user sessions and 50m transactions in its data set in order to learn how shoppers are buying, and how that behaviour is changing over time.

It found that over the last two weeks – comparing the beginning of the period to the end – premium online grocery purchases have grown by 20%, while shoppers have spent 26% more time on grocery websites. Customers are buying more healthcare products (+27%), perhaps as shoppers look for ways to protect themselves. But they are spending less on travel planning websites (-20%). It also found that while sales of underwear, lingerie and sex toys were rising (+35%), sales of sports equipment were down by almost a third (-28%). 

“The world’s biggest retailers are seeing the impact of the coronavirus on their businesses, with consumers avoiding busy high streets in exchange for the safety of shopping online,” said Aimee Stone Munsell, CMO at Contentsquare. “In the last two weeks along, we’ve seen a significant boost in online purchases, with consumers buying more groceries – and more healthcare products – online.

“While there has been a boost in online sales for some industries, others are clearly suffering. Perhaps unsurprisingly, travel, hotel and tourism bookings are all down, while the sale of outdoor items such as sports equipment has also dropped off in the last two weeks.

“In contrast, there has been an increase in spending on home furnishings, and even lingerie, as consumers switch their leisure time to more indoor pursuits. The ability to pull these types of insights in real-time is vital for brands, which can respond with changes to stock, navigation and on-site promotions in order to drive consumers to the products they need.”

Plan now for online sales rate to double

Retailers should plan now for 40% of retail sales to be made online at the peak of the Covid-19 coronavirus outbreak, a logistics specialist has warned.

The delivery specialist says that home shopping is likely to double from 20% of all retail sales previously to 40% as shoppers buy food and household goods online rather than in-store. 

David Jinks, head of consumer research at ParcelHero and a member of the Chartered Institute of Logistics and Transport, says: “The Government’s coronavirus action plan says that if the virus does get a foothold in the UK, the Government will encourage ‘population distancing strategies such as school closures, encouraging home working and reducing the number of large-scale gatherings to slow the spread of the disease.’

“It is likely that consumers will also want to avoid crowded shopping centres and the big weekly superstore shop for groceries. One obvious alternative is shopping online. Consumers who have so far resisted ecommerce are likely to change their minds and move online to buy food and household items to avoid busy stores.

“For example, the Government’s action plan identifies the elderly as one ‘at risk’ group from the spread of the coronavirus. Traditionally elderly people have been less likely to buy online, but this is a group very likely to start using home deliveries or have carers set up deliveries for them if there is a severe outbreak.”

If the virus becomes an epidemic, Wales’ chief medical officer Dr Frank Atherton has predicted that cases would escalate from April and continue to increase for up to eight weeks, peaking in May and June before a subsequent downturn, said Jinks.

“If this peak period does happen, we believe the rise in demand for home deliveries of food, household items and in particular products such as bleach and soaps is likely to increase by 100%,” said Jinks. “Retailers need to gear their omnichannel sales towards ecommerce and plan for a decline in store purchases over the coming months to be prepared.”

He added: “Retailers of all sizes must take stock of their online sales capability and consult with their logistics teams and partner courier networks to be prepared for a significant jump in home deliveries. This is not a case of profiteering during a potential emergency, it is just switching the way they meet normal consumer demands. In fact, it seems sales on the whole will decline during the virus peak period, as people will have other things on their minds besides shopping, but the overall home delivery portion of all sales is likely to double. Our live UK courier services guide compares all quality UK couriers to determine the most convenient and best priced services, and will be a useful tool for stores looking to meet increased home delivery requirements.”

He said that in the future it could be that shoppers who have bought online now for the first time tend to do so again in future. There may also be future waves of the illness that means vulnerable and elderly customers need to shop online in the future. 

Jinks added: “To repeat, putting greater significance on online sales is not exploiting the situation, it is just common sense and will benefit all consumers if there is a significant outbreak here in the UK.”

However, BBC reporting suggests that supermarkets will struggle to do more business online than they do now. While 19% of all retail transactions took place online in January, according to the ONS, just 5.3% of grocery transactions were through ecommerce.

Hermes sets up fund to support self-employed couriers who have to self-isolate

Delivery company Hermes has announced it is to make a £1 million pound fund available for its self-employed couriers, to help support them if they need to self-isolate as a result of the coronavirus. The move, supported by the GMB union, follows concerns that self-employed people are not eligible for sick pay. Hermes will also support them in finding someone to deliver on their behalf if they do not have a substitute and will guarantee that their rounds will be kept open for them for when they return.  

Martijn De Lange, chief executive at Hermes UK, said: “This is an extraordinary situation and we have taken the decision to help support our couriers financially if they need help and also ensure we are doing everything we can to prevent the spread of the virus. It is simply the right thing to do and I hope that other organisations will follow our lead.”

Hermes previously introduced a ’self-employed plus’ option for its couriers, offering benefits such as holiday pay to its couriers. The deal is backed by the GMB trade union under a partnership agreement which saw Hermes provide recognition of the GMB’s representation of its self-employed couriers – totalling around 15,000 – that choose to join the union. 

Competition authorities warn against retail rip-offs

The Competition and Markets Authority (CMA) says it is prepared to take action to make sure that retailers and traders do not take advantage of shoppers to inflate prices during the coronavirus outbreak. 

It says it will take direct enforcement action where appropriate – and wants to see ay evidence that companies may have broken competition or consumer protection laws by, for example, charging excessive prices or making misleading claims about how protective equipment works. 

It is also assessing whether it should advise the Government to take direct action to regulate prices. 

CMA chairman Lord Tyrie said: “We will do whatever we can to act against rip-offs and misleading claims, using any or all of our tools; and where we can’t act, we’ll advise government on further steps they could take, if necessary.”

CMA chief executive Andrea Coscelli said: “We urge retailers to behave responsibly throughout the coronavirus outbreak and not to make misleading claims or charge vastly inflated prices. We also remind members of the public that these obligations may apply to them too if they resell goods, for example on online marketplaces.”

Are shoppers panic buying?

Social media is full of pictures of empty shelves in supermarkets as shoppers stock up on items from long-life food to toilet paper and flu medicines, while #toiletpapercrisis has also been trending on Twitter – although mostly in relation to Australia. 

Earlier in the week we reported that Ocado was warning customers that delivery slots were being booked up early and they should plan their shop earlier than they might usually. Certainly it seems that buying behaviour is changing around the virus. 

But health secretary Matt Hancock said last night that there was no need to panic buy and that the government was confident there would be no food supply shortages. “Crucially,” he said on last night’s Question Time, “we are working with the supermarkets to make sure that, if people are self-isolating, then we will be able to get the food and supplies that they need.” But the BBC reports that a number of supermarket executives are baffled by his comments.  It seems that supermarkets are rather using plans they drew up for a no-deal Brexit to ensure that food stocks remain steady.

The British Retail Consortium has also said that retailers would be more than happy to deliver online goods to doorsteps. 

Image: Fotolia

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on IR.net