The COVID effect: Demand on eCommerce fulfilment in 2020

The COVID-19 pandemic has transformed the business world, with the usual demand for products being flipped as consumers are forced to stay home, many taking up new hobbies and finding leisure time extended to explore new activities.

Multiple business models have changed indefinitely, never to be the same again. Small local businesses have had to adapt to stay afloat and larger retailers have had to cut back on costs, sadly leading to the reduction of staff and letting employees go.

Despite heading for a recession, we have seen an almost instantaneous shift in people’s shopping behaviours, leading to an extraordinary spike in online retail sales. According to The Wall Street Journal, we have experienced a 146% increase in online retail orders compared to last year. With an increase in direct to consumer brands it is clear that the COVID-19 pandemic has encouraged online ordering for existing shoppers as well as converting a whole new group of customers.

For many retailers, online orders have become somewhat of a lifeline, offering insurance during a time where physical premises have been forced to close and in the case of small local businesses, the mantra of ‘adapt or die’ has sadly become the ‘new normal’. 

During this unparalleled time for retailers, those who have come to ‘expect the unexpected’ are those who can hope to come out of this stronger and with a loyal customer base. One of the biggest worries for retailers has been a breakdown in their supply chain. Knowing we live in a time where the consumer isn’t willing to wait a month for a product to come back in stock, keeping stock moving and readily available is key to keeping businesses going.

Due to the global impact of COVID-19, every region of the world has been affected, creating a domino effect all the way down the supply chain from manufacturers to consumers. Interrupted supply chains can lead to limited stock, frustrated customers and the cancellation of orders. Keeping track of inventory is key as demand continues to grow. Shipments are taking longer, increasing lead-times, therefore the automation of supply chain management has been beneficial to many businesses during this time. 

Weathering the storm in the short term is one thing, but what should we expect the long term effects of COVID-19 to be? With such a significant increase in online shoppers during this period it is sensible to assume that many of these may be converted permanently. Though undoubtedly many will return to bricks and mortar stores as they now start to reopen there is a notable demographic that have been forced to learn new ways of shopping. 

With this in mind, retailers must reassess their online strategy and build upon what they have started to sustain their business going forward. Fulfilling orders can have a significant cost, especially when making costly home deliveries is part of your business strategy. This new era of eCommerce could see many new partnerships as retailers seek to meet demands. It will give smaller businesses a chance to challenge the larger eCommerce outlets.

The fundamental characteristic of businesses who survive this time is flexibility. The landscape is changeable and those who continue to be flexible in their approach to eCommerce fulfilment will ultimately strengthen their business model. Automating processes and making use of partnerships will continue to be the recommendation to upholding the supply chain.