How new commerce may ease the impact of COVID-19
Retailers are demonstrating a deeper understanding of how people shop across all their channels in an effort to stave off panic buying and restore some calm. Nearly all the major retailers (Sainsbury’s, Asda, Waitrose and Iceland) have capped the number of products shoppers can purchase in-store. This move has been closely followed by restrictions activated through online and mobile channels. Ocado, which operates purely online, has paused registration of new customers to its website, deactivated its app – pushing all traffic to its website, and is encouraging existing customers to book delivery slots well in advance.
Predictably, ecommerce is currently the winning channel – premium online grocery purchases have shot up by 20%, with shoppers spending 26% more time on grocery websites since the beginning of March.
However, we are also seeing the resurgence of visits to independent stores as consumers struggle to buy what they need. Finding shelves at the big four empty, shoppers are reverting to local shops to stock up on essentials. I predict the renaissance of the local store as community spirit rises.
Food delivery services are experiencing an uplift in sales, too. This could, in part, be because they have started offering non-contact deliveries, where drivers call from outside, leave orders at the front door and stand a few steps back as you pick up your delivery. Grocers are implementing the same approach with online orders; Ocado, for example, has already notified shoppers that to help reduce the spread of coronavirus, it will leave shopping at doorsteps and no longer remove unwanted bags or returns. Waitrose, Asda and Sainsbury’s are following suit.
Competitors working together
For the first time, retailers are working with each other to establish stock levels and it’s predicted they will work with suppliers to scale back range and focus on producing and delivering food staples.
Morrisons is to speed up payments to its smallest suppliers to help with cash flow during the outbreak. From next week, suppliers who sell less than £1m of goods a year to the supermarket will receive payments within 48 hours rather than the usual two-week window. This will benefit about 3,000 small businesses, more than half of whom are farmers, in an initiative to keep the supply chain full.
A new conscience
The Olio mobile app connects people with each other, so food surplus can be shared with neighbours rather than discarded (the average UK family throws away £700 worth of food each year with £12.5 billion going straight to landfill).
Although not designed for this purpose, the app has become a lifeline for the vulnerable badly hit by hoarding as food bank donations are impacted. A food bank in Coventry said supplies have “never been so low”, whilst London’s North Paddington Foodbank reported donations down by 25%.
Retailers are also collaborating with Olio – volunteers are now picking up unsold and surplus food from local food businesses and retailers such as Sainsbury’s, Planet Organic, Hello Fresh and Gusto to redistribute to people in the community.
Local Facebook and WhatsApp groups have formed over the last few days to support people in self isolation, including the elderly, who cannot get to multiple stores to shop or pick up prescriptions. The Barnet COVID-19 Mutual Aid London-based group already has 1.3k members offering help to people in need in the area. Independent stores have now joined the group to offer products and pre-assembled care packages.
Amazon has also removed over one million products claiming to cure coronavirus from its digital shelves and has blocked a number of resellers profiteering from inflated prices of in-demand products (known as price gouging). It has reported that some sellers inflated prices by over 2,000%.
As the pandemic sweeps the UK, it seems this new approach to commerce may be helping to alleviate the impact of COVID-19 by responding to our new shopping needs. Retailers are innovating and collaborating at pace to meet an extreme challenge. Maybe, even more importantly, they are doing so with a conscience.
19 March 2020
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