Covid-19: How Brands and Retailers Can Put Their Customers First
“You are in a Virtual Queue” – This is the message earlier this week to consumers trying to access Ocado.com in the UK. Not only are physical queues forming outside bricks and mortar stores globally, we are seeing virtual queues forming too. Online grocery stores battle to deal with the increasing levels of online sales due to the outbreak of Covid-19 globally in an effort to put their customers first.
This follows an unprecedented move by rival retailers in the UK (Sainsbury’s, Co-op, Lidl, Tesco, Aldi, Waitrose, Marks & Spencer, Asda, Iceland, Morrisons, Ocado, Costcutter) to issue a joint statement in an attempt to ease their customers’ concerns regarding supply levels of groceries, in direct response to the activity of many consumers who have been stockpiling goods. To attempt to gain some control on the situation, Ocado stopped processing new customer accounts, opting to only accept orders from existing customers that have purchased from them before.
Ocado are not alone in dealing with these pressures ,with Waitrose going temporarily offline, but rectifying the problem relatively quickly early on Monday.
The above drastic increase in online sales correlates with the data that we are seeing on the ChannelSight platform. We are seeing unprecendented increases in both traffic and sales, across all industries, but most notably in the FMCG sector, and within that, for certain products.
Looking at our data for March to date, in the UK ChannelSight has seen a 1911% increase in traffic to online grocery retailers and a huge 3256% increase in sales since the outbreak of Covid-19, a significant shift in both demand and intent versus our February data.
Home-hygiene has been the category that has driven most of the traffic and sales growth with laundry detergents, wipes and sanitizers seeing growth of 10,000% vs two-weeks ago.
|Retailer||Lead Increase||Baskets Increase||Revenue Increase|
Source: ChannelSight – Marketing Intelligence Platform. Data comparison period 16th-29th February 2020 Versus 1st-14th March 2020.
What is the impact so far on brands?
When retailers are overwhelmed with traffic both in store and online in unprecedented times like this, what impact does this have on the brand, the retailer and ultimately the customer?
We spoke to Dean McElwee, Integrated Commercial Lead, E-Commerce for Europe at Kelloggs who gave us his insights on what he is seeing at the moment and where he sees online grocery sales being impacted sales in the future.
“We are seeing the impact of the necessary government recommendations including social distancing impacting our retail partners in both their offline and online environment. Fulfilment will be hugely impacted as home deliveries are increasing and capacity to fulfil these being stretched. We are seeing a huge increase in online activity with shoppers making use of both web and mobile platforms with new downloads of apps rising quickly. This increase in online activity will put huge pressure on the existing technical infrastructures that retailers have in place. The outcome of this will be an investment in technology and platforms to ensure that demand can be met. . Already we have seen Ocado and Waitrose suffer in this regard and we expect to see others under pressure from a technical standpoint.
In the Wholesale B2B area wholesalers who have traditionally not invested in B2B E-commerce platforms are looking to pivot their business even more to this channel. All of this pressure on the industry is having an impact on employees in the sector also who have become even more critical to operations. It’s important that retailers put measures in place to protect their employees as they work through this crisis, enable working from home where possible and being mindful of the impact this crisis is having on everyone.”
Dean McElwee – European E-Commerce Leader – The Kellogg Company
#1 Supply Chain
Supply chains will be hugely impacted, and methods of operation will be adjusted to respond to high levels of demand.
Home deliveries have increased, but we can expect to see an uplift in click and collect too. We can expect retailers to seek to balance the types of fulfillment more effectively and look to use algorithms to prioritise picking. We are seeing huge delays in home deliveries across the board, with customers having to wait up to a week for an available delivery slot. This will force customers to visit bricks and mortar stores if they cannot wait any longer for deliveries.
The reaction to an event like this is likely to cause an upsurge in technology investments to support the growing pressure on retailers. Those retailers that prioritised investment in their infrastructure in the past will likely cope well with this increased demand. Those that didn’t, will need to invest heavily now to meet growing demands.
#4 Automated Warehouses
To facilitate social distancing, the need to reduce contact with others will lead to an acceleration in investment in this area, with the likes of Ocado benefiting from the use of automated warehouses.
#5 Payments Technology
As payments move online rapidly we can expect to see a huge surge in in-app payments, further putting pressure on technology infrastructures for retailers.
#6 Changes to the bricks and mortar shopping experience
Many retailers are facing reductions in store opening hours to facilitate restocking and increased cleaning work in their stores. As well as this, employees across this sector are under severe pressure to keep on top of the demand.
What role can the retailer play in this situation?
While ensuring the safety of their employees and customers alike, what practical steps are retailers taking in order to address the situation and ensure a fairer distribution of available products to consumers?
#1 Opening Hours
Many stores have temporarily been forced to introduce reduced opening hours in order to facilitate increased cleaning and restocking of the shelves.
#2 Limiting Purchases
To restrict people stockpiling on essential items, which prevents others from having access to these items, many retailers are limiting the sale of certain products in order to ensure fairer distribution.
#3 Facilitate Social Distancing
It started with chemists and has now spread to larger retailers, where the number of people at any given time that are allowed to enter the store is restricted. These restrictions are in place to protect the customer and also the staff, who have a greater chance of catching the virus due to being fixed in one location and constantly exposed to customers.
#4 Supporting Vulnerable Clients
Older customers, and those who have genuine need of additional consideration, during this period are being offered dedicated opening hours, where only they are allowed into the store during certain periods in the morning or evening.
Scott Newall, Strategy and Brand Consultant at S. Newall Consulting, says that anyone that is able to do so, to step up and look out for the vulnerable.
“I have heard from family and friends that supermarkets are being cleared out of certain essential items. Costco had a big line out the door this morning with people stocking up on supplies. My father also informed me that last night in his local Sainsbury’s, there was a distressed, elderly woman unable to purchase any loo-roll. The widespread panic buying is a real shame. I fear it will only get worse before it gets better. The behaviour is self-perpetuating. The best thing one can do is to buy in moderation. Set the example for others. Finally, those that are able to do so need to step up and look out for the vulnerable.”
Scott Newall, Strategy and Brand Consultant at S. Newall Consulting.
#5 Cashless Transactions
There are a number of stores who during this period will not accept cash and will only accept card and preferably Contactless Payment options. We are also seeing employees sanitising the keypads of the payment units between customers. Rather than taking the card off the customer and tapping it for them, employees are asking customers to tap it themselves.
What about serving the customer?
In order to follow the social isolation guidelines issued in a number of countries during this crisis, what can brands and retailers do in order to help their customers easily find products they need?
#1 Get back to serving the customer
Help your customers easily find the products that you sell, through whatever retail channel they wish to buy from, by purchase enabling all digital touchpoints and presenting back every available purchase option, versus trying to corral a consumer towards a more profitable option.
#2 Don’t make me think
People are not mind readers, brands need to remove friction along the digital path to purchase by placing the available purchase options right at the point of consideration, where the customer has indicated the need or want to purchase your product, whether that is on a category page, product page, social media post, video, recipe activation, campaign landing page or digital POS.
#3 Removing uncertainty
Help avoid wasted trips in the car and reduce frustration by providing timely and accurate information on where and when customers can purchase the products they need from your brand. If at all possible, try to only ever present back to the customer a confirmed working link, and confirmation if the item is in stock with the retailer or if they will need to call the store to verify. Furthermore, provide an obvious button to click which will take the customer to that point of purchase online or in store at the retailer of their choosing. This should happen in the least amount of clicks possible for the exact items they are interested to purchase. Provide a logical substitution if their preferred option is temporarily out of stock.
#4 Recipe Activations
When all of the cafes, restaurants and food delivery services are shut down, it greatly limits options for people who may have become dependant on them due to having inadequate cooking facilities at home, working long hours (especially essential services that we all depend on, like doctors, nurses, firemen, etc) or simply trying to keep sane in a house full of children with cabin fever. People who have stuffed their fridges and freezers with everything that they can get their hands on and need help in efficiently translating that food into varied tasty and healthy options, while at the same time reducing waste. There’s an opportunity for both brands and retailers to promote responsible consumption, by leveraging recipe activations across their digital and physical channels.
“We know that even confident cooks struggle to figure out what’s for dinner on a regular day, with full access to ingredients and when everything is going to plan. Faced with a pantry full of random ingredients, recipe guidance can add a vital slice of certainty in an uncertain world, particularly for those who rarely cook. Grocery retailers and food brands with the ability to fulfil this role should be putting processes in place right away.”
– Niamh Sterling CEO Recipe Guru
#5 Leverage the data
If you have access to stock status and sell out data across your retail ecosystem, then you should look to setup alerts to monitor when fast moving or high demand items are showing up as out of stock. Ensure that the people across your organisation who can do something practical about that situation are receiving that information in a timely manner. This will enable them to get on the phone with the people can do something about it, whether that is within your brand, an external supporting merchandising partner, or the retailer itself.