E-COMMERCE
Clicks and mortar
Beth Poole, of Transport Intelligence,
takes a look at the effect of COVID-19 on
e-commerce.
The outbreak of COVID-19
around the world has
brought many retailers
to an abrupt standstill. Retail
supply chains have been left
in disarray, following a mass
cancellation of orders. While
bricks-and-mortar retailers
come to terms with some hard
truths, such as that stores
may not be able to fi nancially
recover from the pandemic,
e-retailers are witnessing a
surge in sales as people turn to
them to fulfi l their shopping
needs while bricks-and-mortar
stores remain closed.
Even before the COVID-19,
outbreak e-commerce had
been gathering pace. In 2019
e-commerce sales represented
the bulk of overall retail
sales growth in the US,
accounting for 56% of overall
retail growth, according to
emarketer. COVID-19 simply
appears to have escalated the
transition to online. According
to COVID-19 Commerce
Insights, US retailers
experienced a year-on-year
increase of 68% in revenue
growth in online sales in mid-
April.
Clothing sales up
Despite Next’s CEO Simon
Wolfson stating “people
do not buy a new outfi t to
stay at home”, this does
not seem to have been the
case. Loungewear sales are
seeing record-breaking sales
numbers. In April, demand
for loungewear rocketed
322% in the UK. It is not only
loungewear sales that are on
the rise, but home and athletic
goods are also experiencing
record-breaking sales. The
closure of bricks-and-mortar
stores has been encouraging
those who are technophobes
to learn some new skills.
E-commerce giant Amazon
has reaped the rewards of
non-essential retail closing, as
consumers have turned to its
stores in China reopened
following the government’s
instructions to return to
business as usual, only to
see consumers continue to
stay at home. Electronics
retailer Suning.com has stated
that some of its bricks-andmortar
stores are only seeing
approximately half of its usual
customer footfall.
In the long run, e-retailers
are still likely to benefi t from
the crisis. Many bricks-andmortar
stores were already
facing administration before
the crisis took hold and it
is doubtful whether many
will recover from it. Swedish
retailer H&M announced plans
in February 2020 to ”power
up” its 5,000 stores, using
them more as logistical hubs to
focus more on digital growth.
With COVID-19 accelerating
the closure of the high street
stores, it may be only a matter
of time before other retailers
switch to digital solutions.
Plus ça change…
Has COVID-19 changed
anything fundamentally?
No.
Instead, the virus has
simply sped up the timeline,
spurring a new generation into
the era of online shopping.
The real test will come over the
festive period, assuming bricksand
mortar stores survive the
crisis, when we will discover
whether those who have
previously shunned online
shopping turn to it to carry
out the bulk of their Christmas
purchases.
website to fulfi l their shopping
needs. When lockdown
measures were implemented in
early March, the demand was
so great that it overwhelmed
the company’s fulfi lment
and delivery capabilities. In
response, the company went
on a hiring spree, employing
100,000 additional members of
staff to help manage demand.
Canada-based e-commerce
platform Shopify has also
benefi ted from the crisis:
during the fi rst quarter,
revenues jumped 47% to
CAN$470m. The company
has been assisting retailers
to transition to an online
platform. Shopify will organise
delivery to local areas on
behalf of small shops and
restaurants. Though the
company does not yet carry
out the deliveries itself, it is
developing a warehouse and
logistics network that will
enable it to do so.
Short-lived demand?
However, the dramatic spike in
demand is likely to be shortlived.
E-commerce sales have
already dipped in countries
where lockdown measures
have been lifted. That said,
retailers should not expect
consumers to fl ock to bricksand
mortar stores in the near
future. Shopping malls and
US retailers
experienced a yearon
year increase
of 68% in revenue
growth in online
sales in mid-April
Beth Poole, Transport Intelligence
www.airlogisticsinternational.com August 2020 15
/Suning.com
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