In recent days, it had been unavoidable to read about the coronavirus, the government’s preventive measures, and the economic implications that this entails. Naturally, COVID 19 also has a strong impact and implications on online commerce. Let’s see what we’ve experienced as a fulfillment and logistics company and what web store owners can expect in the coming weeks.
What have we experienced in recent weeks?
1. Inventory shortage at webshops ordering from China
China was the first country where the novel coronavirus appeared and to date has infected more than 80 thousand people. At the end of January, China reacted with the introduction of harsh rules, closures of cities and the shutdown of everyday life. Wuhan, the epicentre of the outbreak was quarantined, schools, restaurants, nightclubs and factories shut. The situation has improved considerably due to the month and a half quarantine. Some companies may resume production, the first being agricultural and health care companies.
However, the quarantine period had a significant impact on webshops relying on stock from China. Through the course of our fulfilment duties, we have noticed that many webshops have run out of stock and wholesalers are not far behind. The good news, though, is that the situation in China is normalising, so hopefully, soon enough, orders can be placed to suppliers with the usual delivery times.
2. Webshops offering groceries have seen a constant increase in orders
Since the 16th of March, schools have been temporarily closed in Hungary, and more people are working from home, the number of people self-isolating will increase. Everyone is encouraged to stay at home, and as such more and more are ordering food online. Many large supermarkets offer online delivery, such as Tesco, Auchan, Spar and Príma. These stores are under great pressure, the number of people ordering is increasing day by day, this huge influx of orders poses a challenge in terms of staffing and stock.
In the Czech Republic, the course of the virus is further ahead. The sudden huge traffic for food webshops started when schools shut. More stringent measures have been introduced following repeated orders of food in excess of 600kg. Food orders have been limited to 50kg, and delivery times have been prolonged. The Czechs also introduced couriers ringing and leaving the order in front of the door to avoid physical contact.
Stringent measures and restrictions have started in Hungary too, Tesco, for example, has been forced to impose restrictions on certain products: only 12 items can be ordered from certain products to avoid shortages. Even so, there still may be a shortage of supplies – as Tesco informs their customers on their website. In addition, it has also been introduced that you can only prepay for orders online.
Another change may be that restaurants who would otherwise be unable to stay open due to quarantine measures will switch to delivery. For example, Wolt – a popular food delivery company – has been contacted by five times as many restaurants than usual.
3. E-commerce has livened up, more and more orders are to be expected
As more and more restrictions are imposed in relation to the movement of people, traffic of physical stores is taken over by webshops temporarily. People will avoid visiting physical stores in hopes of preventing infection. This leads to increased traffic for webshops and webshops specifically dedicated to FMCG products. People’s behavior and attitudes towards online shopping will change, they will buy more online and will be more willing to wait for delivery due to the situation. These behavioral changes may persist after the virus has died down.
The price of some products has increased significantly due to increased demand. Disinfectants and masks have become scarce and are hard to find in stores. In Italy, these items began to sell online at increased prices, a bottle of disinfectant gel was often sold for more than €22 instead of the original €3. The cost of face masks went up from 10 cents to 1.8 euros.
Other products that have seen an increase in demand are cleaning products, cleaning supplies, medical supplies, medicines (especially vitamins), toilet paper, soap, paper towels, handkerchiefs and gloves.
Let’s look at other sectors not related to health or food. In China, the shops of cosmetics companies have also closed. One of the largest cosmetics companies employed their beauty consultants online as influencers during the quarantine, increasing their revenue by 200% compared to last year. Fashion companies switched to online sales, and their salesmen continued selling clothes through WeChat.
In the case of webshops, the effects of the virus has produced particularly favourable traffic for those primarily involved with FMCG products. It is hard to deliver a prognosis or to predict the turnover of other webshops involved in technical products and parts, as while the decline in offline sales can have a positive impact on these industries, an economic crisis, or even the growing fear of a looming economic crisis, can rather quickly decimate the number of online orders.
4. Courier services are introducing special measures in light of the situation.
E-commerce is highly dependent on the extent to which courier services are affected by the measures introduced by the virus. Let’s see what happens in Italy, which has the highest number of people infected in Europe. In Italy, schools, gyms, museums and all shops except pharmacies and grocery stores have been closed. Work assignments have not been suspended and the delivery of goods is considered as work assignment under new regulations. Thus, home delivery continues to operate in Italy. In Hungary, more and more stringent measures are introduced constantly, schools and kindergartens are being closed and all events held in more closed areas with more than a 100 people are to be banned. However, the courier services continue to operate smoothly.
The courier companies have reinforced their hygiene protocols and issued notices about the virus. Magyar Posta disinfects common areas every day, delivers hand disinfectants to their couriers, their staff does not travel, and also highlights on their site that packages from China are completely safe, according to the National Chief Medical Officer. Similarly, GLS and Sprinter placed hand sanitizers and paper towels at several locations in their plants, postponed their trips abroad, and required sick staff members to stay at home.
What can YOU do?
It is important to always keep your customers informed of any stock shortages or important events. You can do this through social media interfaces or via email. Your customers will always appreciate being transparent about everything. Several webshops have placed banners on the home page where they inform their customers about stock shortages and provide information about the virus situation.
Try to do your best to maintain good hygiene. For example, some courier services have introduced that couriers do not have to come in contact with the customer. The customer can indicate where he wants the courier to place the product in front of the location, thus avoiding contact with the other person.
Things are changing day by day, and it is impossible to predict how long the epidemic will last. However, in these times, it is important that we use our resources, be creative and find new ways to attract new customers and also reach our current customers.
Our article is being updated constantly.
marketingland.com, Tesco.hu, g7.hu, posta.hu, gls-group.eu, sprinter.hu, divante.com, nepszava.hu