If there’s one economic sector which should, at the very least, be doing just fine right now, it’s arguably e-commerce. For example, looking at the headline figures, Amazon is doing spectacularly well. According to CEO Jeff Bezos, however, this “pandemic profit” will be cancelled out by the need for extra safety precautions. Cynics might take this comment with a pinch of salt, but it is hard to dispute that the Coronavirus has highlighted the fact that the e-commerce sector still has challenges to address.
You can sell anything (legal) online but most of it still needs to be delivered
If there’s one company which should have the practicalities of e-commerce down to a fine art, it’s arguably Amazon. Even they, however, have been struggling to make deliveries. While it is the world’s biggest online behemoth, it was not ready to be hit with such a massive volume of orders, especially not at a time when it needed to implement social-distancing in its warehouses and deal with issues in the global supply chain.
Amazon, however, has done a lot better than most, including its (fairly) close relatives, the major supermarkets, at least in the UK. When the Coronavirus hit, there was a surge in demand for online deliveries and, bluntly, the supermarkets weren’t able to cope. Hopefully, the most vulnerable people living on their own were able to get deliveries, but many vulnerable people had to rely on family and friends to do their shopping for them as they could not get a delivery slot.
Shopping in the real world is still big business
To be fair, while supermarkets sell a massive range of products, for most people, the main reason for going into them is to stock up on food and household items. Some of these are fresh items, in fact, these days, it’s increasingly likely that some will be sold loose. It’s therefore understandable that many consumers will want to pick their own items rather than put their trust in supermarket product pickers.
Even when they’re not, many people often prefer to double-check that packages are intact and/or to decide themselves what they want to do if a particular item is out of stock. These are all arguments for continuing to visit real-world supermarkets rather than shopping online. The more people continue to visit real-world supermarkets, the less incentive the supermarkets have to invest in the necessary infrastructure to run e-commerce operations on a large scale. The question then becomes whether or not they will do so now.
Is the post-Coronavirus future business as usual, click and collect or e-commerce?
Supermarkets and indeed other retailers large and small are currently facing something of a conundrum. On the one hand, many people are predicting that the Coronavirus will lead to a long-term shift in consumer behaviour. On the other hand, nobody has any idea what it will be.
Based on pre-Coronavirus trends, it seems safe to assume that the e-commerce sector will continue to grow, at least compared to its pre-Coronavirus levels and probably compared to its current levels. This raises two key questions. How quickly will it grow and what size will it ultimately reach.
To complicate matters, there is unlikely to be a “one-size-fits-all” answer to these questions. For example, supermarkets may well see their e-commerce and click-and-collect sectors grow rapidly because shopping in a supermarket is an impersonal experience anyway. Smaller businesses, by contrast, may see their eCommerce sections grow at a much slower rate as their customers value the personal interaction much more highly.
If this does happen, then it could be beneficial for smaller businesses as they would be able to see what the major players were doing, quite bluntly, learn from their mistakes (and successes) and see how they made use of technology before thinking about how to ramp up their own online operations.
With retail shops opening today we wish all of the independents every success and hope that people continue to support the small businesses.