Coronavirus: what’s happening in Europe’s Retail Industry
It was just a few months ago, that global trade and the supply chain were operating full speed, like the well-oiled machines we thought they were. Companies kept doing business as usual, planning for growth in 2020. News coming from China about the outbreak of a novel coronavirus (COVID-19) seemed far away, nothing alarming for companies in Europe and the US, even though some of them could already see a disruption in their supply chain and stock-outs of some of their products.
Today, with a third of the world’s population under a pandemic lockdown to control the spread of the virus, many of these very same companies are fighting for their survival (literally) and wondering what the future holds.
An X-ray to Europe’s Retail & Ecommerce industry
Predicting the future of urban deliveries is not an easy task, especially when governments and companies are busy dealing with the now. The last couple of weeks I've been following news on how the situation is evolving for retail and last-mile logistics and the impacts of coronavirus. I've also attended two different webinars, a session on Logistics and Transport in times of COVID-19 by AECOC (Spanish Association of Commercial Coding) and a master class on Unlocking Value in Supermarkets and Food Retail by Tech Data. I have to say most analyses are quite positive and agree there are a lot of measures companies can put in place today.
In Europe, the European Commission has asked governments to keep ensuring the free flow of goods and services, even in countries like Italy or Spain. Even after implementing some of the stricter measures they both consider transport, logistics and e-commerces as essential businesses allowing them to operate 'as usual'. Supermarkets, food distributors and online pharmacies are experiencing an unprecedented increase in sales. Right now their main issues are related to their employees’ safety, satisfying their customers' demand due to the lack of human forces to deliver their products and outdated systems to manage stocks and available time slots.
E-commerces in Italy and Spain are actually hitting an all-time high, with increases of 82,3% and 55% respectively. In Portugal, Gonçalo Lobo Xavier, Managing Director of APED (Portuguese Association of Retailing Companies) reports sales in Portugal saw an increase of 300% during the first two weeks of lockdown, with a drop of 20-30% in sales at present times.
Adapt or die
In the food distribution sector, images of empty shelves and long queues outside supermarkets made headlines. But they seem to be old news, as supermarket chains have quickly adjusted their businesses for the greater good. They are now changing their operations to cover the population's basic needs and donating health supplies to hospitals and healthcare centres.
● In Belgium, promotions and discounts have been forbidden to avoid overstocking and shortages, making supplies available for all customers. After demand normalised to usual levels of fluctuations, the restrictions were lifted.
● In Italy, food distribution companies, brick and mortar and online supermarkets, like Esselunga, E-Coop, Carrefour, Iperfamila, Basko, Supermercato24, have implemented new measures, in some cases by offering free delivery for customers over 65 doing groceries on the e-commerce platforms. Other organisations Lavazza, Nestlé, Vegé or Bofrost have also donated money to hospitals or offered bonuses to their employees.
● In Spain, companies like Makro, Mercadona, Auchan Retail, Eroski or Sanchez Romero have donated resources to hospitals, healthcare centres, charity canteens and food banks. DIA Group has seized the opportunity to shift to eCommerce turning some of their physical stores into dark stores (urban mini-hubs) and partnering with Glovo for their last-mile deliveries, both measures help reinforce their e-Commerce channel.
Talking about unexpected partnerships to face the global situation, offering alternatives to customers and employees, Aldi has donated almost half a million bottles of water to Spanish hospitals and has employed redundant McDonald's staff who would have lost their jobs in other circumstances.
In Retail solidarity goes hand in hand with growth
Looking on the bright side, national and international brands are showing great solidarity in helping those affected by the virus:
● In France, Supermarket chains like Carrefour have created essential kits including a selected group of products for their online customers, while fashion brands such as the LVMH group have converted perfume factories into hand sanitiser producers.
● In the UK, companies like Microsoft, Ford and GKN and other businesses have come together to start designing and producing ventilators for hospitals.
● In Italy, big brands and designers of the Italian fashion world have donated to help fight the virus. They have also donated face masks, hospital gowns, ventilators and other products to hospitals. Fashion blogger and designer Chiara Ferragni launched the online campaign Go Fund me, raising 1 million € in just 5 hours and donating a total of 3,8 millions to fund beds in Milan's San Raffaele hospital.
● In Spain, Inditex, one of the world's largest fashion retailers, has donated face masks and gowns to those affected by the virus and hospital and healthcare workers. They have turned their factories to produce more masks and gowns for hospitals. Leroy Merlin is working with the Spanish Red Cross to donate materials to the newly-created field hospitals at IFEMA and Fira de Barcelona. SEAT has also converted their factories to start creating automated medical ventilators with adapted windscreen wiper motors.
This unusual situation is also giving the general public great visibility about the importance of transport, logistics and supply chain companies. These organisations are resilient and adaptable to changes, keep their delivery networks active and implement new measures and processes (new hygiene and health standard or zero contact deliveries, etc.).
There is an opportunity for retailers to reinvent themselves and remerge strengthened from this crisis: embracing technology to monitor home deliveries, manage fleets and secure customers' loyalty in the long-term by readjusting their digital customer's journey and experience.
If your business is in need of technology to optimise delivery rounds, manage your drivers and allocate available time slots, get in touch with the Urbantz team, we can help you keep your business up and running. Our last-mile delivery services platform will allow you to get a clear overview on your daily deliveries, managing capacity, fleets, drivers and available time slots, as well as solving incidents in real time. We help your organisation fulfill the maximum number of orders in time.