When rapid delivery is no longer an option
As panic buying swept the UK at the end of March, supermarkets expanded their home-delivery capacity to cope with customer demand, with many consumers opting to stay safe indoors as the nation went into lockdown.
What awaited those shoppers, however, were clogged online booking systems showing next available delivery slots in three to four weeks’ time – not exactly a convenient option for families struggling to get their daily essentials. Of course, the other option was to brave the hour-long queues snaking around the car parks of every major supermarket across the country, come rain or shine.
Very few merchants have been immune to the crisis; even the mighty Amazon is still telling customers to expect a longer-than-usual wait for deliveries on certain items. Just six months ago, many would have refused to wait just an additional day for an online order to arrive, but customers have slowly adjusted to the new normal COVID-19 has ushered in.
So, what does this mean for the future of ecommerce? Has the pandemic reset consumer expectations for free, rapid, next-day delivery? And if so, how long will this new era of customer understanding and patience last?
It’s not just the big-name grocers that have experienced a boom in online ordering. Across the board, customer demand for ecommerce services is up, with home, garden and electricals sales going through the roof compared with last year.
Data from the Office for National Statistics reveals retail sales suffered their biggest monthly fall on record in April, the first full month of lockdown, while ecommerce sales rose to a record high. Online shopping accounted for 30 per cent of all sales in April, up from 22 per cent in March and 18 per cent the year before.
The situation in supermarkets may have since settled down, but late and delayed parcel deliveries are now an inevitable side-effect of increased customer demand, as high volumes continue to put unprecedented pressure on ecommerce supply chains.
“While customers have been sympathetic to the complications of the pandemic, many expected this to only last a few weeks. They expected, and still expect, business to return to normal quickly. The real picture is much less simple,” says Martin Bysh, chief executive of fulfilment centre Huboo.
Managing customer expectations has never been more important. No matter how patient a customer remains, waiting for a parcel to arrive, frustration will eventually set in if a business’s supply chain isn’t in order.
“There are some businesses that will have spotted the threat of the pandemic early and taken action, typically those with global supply chains and operations in China. They were able to evaluate the potential impact of the pandemic, shutdowns and lockdowns, and use their experience in that region to guide them,” says Simon Geale, senior vice president for client solutions at procurement services provider Proxima.
However, for every organisation with a global supply chain and operations in China, there are hundreds of smaller businesses that don’t have the insight to plan ahead. For those, clear communication is the order of the day.
Supply chains can be complex and involve many parties; it’s not always last-mile delivery that’s to blame for a parcel not arriving on time. Lockdowns and travel restrictions have meant some destinations have been unreachable, while others required couriers to rely on different modes of transport. Using commercial airlines to ship internationally, for example.
“Clearly no fulfilment provider, like ourselves, has been in a position to do anything about the resultant delays or unreachable destinations,” says Bysh. “We’ve been combating this by communicating everything we know about couriers back to our small business clients. This enables them to make smarter decisions about their own communications and promises to their customers.”
Adjusting to the new normal
The complexities of supply chains, coupled with the uncertainties of the pandemic and a potential second wave of infections, mean retail’s reset button isn’t going to be pressed anytime soon.
As high streets begin to welcome customers back into stores, many remain wary about returning to physical shops before, and unless, a vaccination for COVID-19 has been developed. While others might have adjusted to the convenience of having their groceries delivered to their door.
According to Mark Dodds, chair of the Chartered Institute of Marketing’s food, drink and agriculture sector interest group, the mixed feelings among customers means retailers and businesses are having to rethink and adjust their marketing strategies to temper customer demand and expectations.
“The issue for retailers going forward will be mainly strategic. If they believe there is money to be made in-store, where they can attract consumers with impulse buys, for example, marketing’s role is to convince consumers that it’s safe and hassle free to enter their stores,” he says.
Personalise to minimise disruption
On the other hand, the financial impact of COVID-19 has meant some high-street businesses have been forced to shutter because they can’t afford their rent. There will also be those that have decided it no longer makes sense to maintain a bricks-and-mortar presence and are currently pivoting to being online only.
“Ecommerce has not been the most profitable channel for some because of the infrastructure and systems investment required. But the pandemic may have changed this and ecommerce has the opportunity to become a more important profit stream,” says Dodds.
As for those businesses that offer both in-store and online shopping, the key for them could be to encourage people to use ecommerce whenever possible. This could help to reduce the size of queues and minimise the pandemonium, as witnessed in March and April, in the event of a second wave of infections, second lockdown or local restrictions.
Dodds suggests that in such a scenario, customers could expect to receive more personalised communication. Rather than traditional media, such as TV and print adverts, for instance, they may receive text messages or push notifications prompting them to shop online if they haven’t done so already.
Retail experts agree ecommerce supply chains are likely to face disruption for some time to come. Clear communication and personalised marketing are set to be just as important as speed and agility in managing and meeting customer demand.