New Articles

The Impact of COVID-19 on Online Retail

retail

The Impact of COVID-19 on Online Retail

Online supply store DK Hardware examines how the pandemic is changing the habits and overall consumer behavior of online shoppers.

After more than a month of confinement, we all dream of the day when everything returns to how it was before, and we can resume our not so old habits. However, it is more realistic to think that COVID-19 has come to stay and that, after this first devastating wave, the entire population will have to remain extremely responsible and we will suffer the consequences of this pandemic for longer than we would like. We do not stop living one of those moments in history in which the foundations of our society are shaken and we experience profound changes that will prevent us from returning to the point where we were a few weeks ago.

This first month of confinement is forcing us to adopt new habits and customs that we will maintain once the state of alarm is lifted, customs that will leave consequences in multiple aspects of our lives. In this post we are going to focus on everything related to new buying habits, otherwise, it would be too long.

Change of Habits

One of the first pieces of news that hit us all hard was knowing that we could only step on the street to buy basic necessities. When we found out, we all ran to loot the supermarkets as if we had seen the four horsemen of the apocalypse arrive. Once the first moment of panic was over (fear is very powerful and completely irrational), we gradually adapted to the new situation and discovered that these small forays into the streets in search of food, medicine, within others, it was anything but pleasant: lines surrounding the supermarkets with people more than 1.5 meters dressed from top to bottom with gloves and masks, security measures to access the premises, lonely buyers fleeing from anyone who invades their personal space … measures completely justified and that we must respect, but that makes it almost traumatic to go shopping.

But this change does not stop here: during the last month, we did not know very well if the rest of online retailers dedicated to the sale of products that are not essential items would continue to operate normally. This uncertainty took its toll on this ecommerce, but once the doubt was cleared and, seeing that the orders were made and arrived relatively normally, we found the second great change in habits: buying everything that we need or want in online stores. Yes, even supplies for your home.

Has your bathroom shower window broken, and you cannot go to your usual store? You can buy it online. Have you been thinking about changing your kitchen’s plumbing system now that you’re spending more time at home? Well, you can buy it online. Companies like DK Hardware, one of the largest online home improvement retailers for a variety of hardware manufacturers all over the United States and Canada, have your back.

Think Global, Act Local

Online retail is there to satisfy your needs and now it has more prominence than ever. This situation is causing many SMEs and local businesses that saw that the online channel was only a complement or did not even consider working on that channel, have woken up from one day to the next and now consider it their priority (and if not I don’t know what they are waiting for). While many companies, both large and small, keep their productivity levels in check thanks to the option of telecommuting, many businesses are going digital so as not to be left behind and remain part of the game.

And After This, What?

The post-coronavirus world will be an even more digitized world in which the battle to get users to choose us will be even fiercer: let’s not forget that a large part of the population does not have the purchasing power it had before the pandemic and that the longer the confinement lengthens, the longer and more severe will be the economic crisis that the country is facing. In these circumstances, these factors will be key:

Price: The price war will continue to be something that online retail has to live with. The excessive stock in the warehouses together with a society that is going to look at the price with a magnifying glass, will force the stores to have competitive and attractive products.

Loyalty: With so many new players on the board, it will be more difficult to get your buyers to be loyal and make recurring purchases in the same store. Therefore, establishing a good loyalty strategy is going to be mandatory.

Omnichannel: It is more important than ever to attract and retain users, so we cannot forget the power of working multiple channels at the same time, building a powerful brand image and with the aim of being more in contact with our users: social networks, email marketing, SEO, SEM are some of the examples of channels that must be perfectly coordinated and that will work as one.

_______________________________________________________________

Featured in the Best Online Shops 2020 – Newsweek, DK Hardware is one of the largest online home improvement retailers for a variety of hardware manufacturers all over the United States and Canada.

parcel

The State of “Fast and Free” Delivery: What Retailers and Parcel Carriers Should Know

Thanks primarily to Amazon (and the explosive growth of Amazon Prime), consumers in 2020 are conditioned to expect that virtually anything bought online can be shipped for free. That’s true for small orders like prescriptions and batteries, and for huge items like appliances and tires. If it means a shopper has to buy an annual subscription, or spend a little more to meet a free-shipping minimum, most people would consider that a low bar to meet.

But as every retailer and ecommerce seller knows, shipping is never free. Today’s multi-billion-dollar parcel carriers are getting paid. They moved nearly a billion parcels this past peak season. That shipping cost is being ultimately absorbed by sellers and is reflected in the price buyers are paying for products.

And parcel volume growth isn’t slowing down – it’s accelerating. According to the Pitney Bowes Parcel Shipping Index, global parcel shipping volume grew 70% from 2014 to 2017, to 74.4 billion parcels. The index projects global parcel volume to rise at a rate of 17% to 28% from 2018 to 2020, surpassing 100 billion parcels this year.

Handling increasing parcel volume isn’t just about figuring out how to do more of the same. The process of getting things where they need to go is under a transformation. In a recent report, Gartner found that transportation is the largest portion of delivery costs, due to a shift from carriers handling bulk freight to small parcels.

[Parcel and last-mile delivery will] continue to be the fastest-growing shipment segments due to increases in multichannel retail, eCommerce in B2B and same-day delivery offerings.

Gartner also observed what many companies are feeling. As volume continues to grow, companies only have time to react instead of plan. That means many are missing opportunities to revolutionize parcel logistics with innovation and alternative delivery models.

How fast does “fast” need to be?

According to research from Freightwaves, consumers unsurprisingly still have an appetite for fast delivery, with 60% of shoppers saying they’ve abandoned an online purchase because of slow delivery times. With record volumes to handle – and so much at stake with consumer expectations – efficiency, on-time consistency, and flexibility are key for parcel delivery services, whether it’s same-day, next-day or deferred.

This year’s U.S. peak shipping season saw about a billion package deliveries (up 4.5% from 2018). Retailers are offering more same-day options, which increases demand and the need for trucks, local delivery vehicles, drivers, warehouses and warehouse workers.

This year, the challenge was also complicated by a shorter selling season (the holiday season was six days shorter in 2019 than is typical), new restrictions on driver hours of service, and the December 16 implementation of new rules for Electronic Logging Devices in commercial trucks. All of these factors impact capacity and the ability of networks to deliver fast and on time.

Emerging shift in consumer behaviors

On the flip side of the “freer and faster” coin is Gartner research analyst Tom Enright. He’s counseled retailers on their supply chain and fulfillment strategies for more than a decade.

In a groundbreaking report published in November 2019, he detected an emerging shift in consumer behavior: “Consumers are starting to express increased concern about the environmental impact of retailer’s shipping practices, and are seeking slower, more sustainable options.”

Consumers are now defining convenience as order fulfillment on their terms, and they’re expressing more and more concerns about the environmental impact of fast, one-off deliveries.

It’s a conflict between three consumer choices:

-The desire for instant gratification

-The price reduction they can get for waiting longer for a delivery

-The impact fulfillment speed has on transportation, packaging and other environmental issues.

According to Enright, for retailers, these shifting demands are driving the emergence of two new requirements that are somewhat at odds with current models:

-Retailers must be more environmentally sustainable in order fulfillment operations.

-Retailers must offer a wide range of shipping speeds and prices, especially if incentives or other benefits are included in the offering.

Considerations for retailers and parcel carriers

That means retailers – and their parcel delivery partners – need to consider more flexible fulfillment options. These will need to be able to satisfy a consumer who wants a totally different delivery than currently exists. Companies will need to consolidate multiple online purchases from different retailers, have them combined using less packaging and have it delivered as one shipment a week from Tuesday. That’s instead of three separate shipments expedited for delivery tomorrow – or even same-day.

Major retailers like Amazon, Walmart, Target, and The Home Depot are doubling down on offering same-day delivery options. And for parcel delivery providers, it remains a highly fluid and exciting market. New network models are not only welcome, but will be required to meet the ever-evolving demands of shippers.

The explosive growth of package volumes, and consumers’ desire for next-day and, increasingly, same-day delivery, aren’t likely to wane anytime soon. And retailers and parcel carriers will need to pursue creative, innovative ways to keep up with those expectations and meet that demand.

_____________________________________________________________

Valerie Metzker is the Head of Business Development at Roadie, a crowdsourced delivery service that works with consumers, small businesses and national companies across virtually every industry to provide a faster, cheaper, more scalable solution for scheduled, same-day and urgent delivery. With over 150,000 verified drivers, Roadie covers 89% of U.S. households — the largest local same-day delivery footprint in the nation.

UPS & CVS Pharmacy Collaborate for Customer Convenience

CVS customers now have the added convenience of utilizing recently expanded in-store UPS package pick-up and delivery options. UPS confirmed earlier this week that more than 6,000 CVS Pharmacy stores around the country will offer the service which was confirmed to roll out immediately.

“This deal offers additional convenience to consumers in the e-commerce era,” said Kevin Warren, UPS’s chief marketing officer. “Working with CVS Pharmacy demonstrates our commitment to increased customer choice and control with our global UPS My Choice® network.”

The collaboration directly impacts both companies, as it not only brings added traffic to nationwide CVS Pharmacy locations, but also provide the added option of trip consolidation for UPS customers seeking an all-in-one shopping experience.

“We will continue to bring our customers new omni channel services and experiences that redefine convenience and make it easier to meet the demands of their increasingly busy lives,” said Kevin Hourican, Executive Vice President, CVS Health and President, CVS Pharmacy. “Adding UPS Access Point locations at CVS Pharmacy locations offers added convenience in local communities throughout the country for shipping and safely receiving packages.”

By adding more locations for customers seeking convenient shipping options, UPS also adds to the UPS Access Point locations, which currently boasts more than 40,000 and 38,000 drop-boxes globally. Additionally, the collaboration impacts over 60 million UPS My Choice Program members currently customizing shipping needs. These members have direct access to the extended UPS network to for estimated arrival and progress alerts, sign for a package in advance, set vacation holds, and more.

“Until now, the UPS Access Point locations have largely been local businesses and The UPS Store® locations. With this announcement, UPS broadens our services to offer an enviable network of secure choices to busy shoppers,” Warren said. “Consumers now have access to a vast and robust suite of options that include the CVS locations, neighborhood businesses, lockers and The UPS Store centers.”