The Retail Bounce-Back: Preparing for a Post-Pandemic World
With UK plc gradually emerging from lockdown, I’ve been asking our retailer customers how they are preparing for life in a post-pandemic world. How much of the old normal will their customers go back to?
How much trust is there in the consumer journey – both in-store and online? And of the new buying behaviours triggered by the pandemic, which ones are temporary, and which are here to stay?
One of the most striking comments came from the Head of Logistics for a major fashion retailer who said to me: “I can’t imagine a million people will be walking through the doors of the Trafford Centre this November.”
“People visit stores for an experience, not just a transaction, but how are they going to feel if they can’t use the toilet, can’t try on clothes and have to walk one way around the store? And who knows, they might even have to pass a temperature test before being let into the car park.”
Another commented: “People will still go to supermarkets for food, but who wants to risk infection for the sake of a non-essential shopping trip, when they can buy online from the safety of their own homes and then get a non-contact delivery?” Meanwhile, figures from a DPD customer whose stores have re-opened in Asia show that footfall is only 40% of what it was before, whereas their online traffic remains super buoyant.
New consumer behaviour
Here at DPD we obviously want the UK high street to survive and thrive again, not least because deliveries to store were a major proportion of our pre-COVID B2B volumes.
Hopefully we’ll see a string of innovations to make the in-store experience as engaging, safe and convenient as possible. But the fact is that in the last three months we’ve seen a step change in the move to online and a huge surge in our B2C traffic – several commentators are saying that e-commerce has leaped forwards four years in just three months.
Perhaps the most dramatic stat is that, according to research consultancy Retail Economics, 45% of consumers have bought something online for the first time that they’d only ever bought in-store before.
Our own data tells the same story, because since the start of lockdown, we’ve delivered to 500,000 addresses for the first time ever. And we’ve also seen downloads of the DPD App – where you can manage your delivery preferences – grow 28% quicker than before lockdown, to reach a total of 7.3 million users.
The new online and mobile shoppers
There’s definitely a segment of new ‘silver surfers’ who, because of lockdown, have become more tech-savvy, overcoming reservations about e-commerce transactions to buy essentials such as food and health supplements.
But here’s the thing, they’ve then realised that clothes, craft and leisure items are also available with a simple swipe or a click of the mouse and will arrive safely the next day on their doorstep. In a similar vein, online shoppers who previously just bought fashion and leisure items are now using websites to buy essentials as well.
Is the massive weekly food shop a thing of the past? It looks that way at the moment, with consumers making shorter and more frequent supermarket visits, supplemented by deliveries from subscription services such as Mindful Chef and Hello Fresh – all of whom ship with DPD and are now sending 300,000 parcels per week with us.
It looks like people who used to buy six- or seven-days’ worth of food from the supermarket have replaced around a third of that with food subscription services. And if they’ve relished the new experience, why would they go back to their old way of doing things?
Preparing for a post-pandemic world – planning for the Christmas peak
Understandably, in the current crisis, retailers have been very focused on immediate challenges and on getting through the next day or week. But to maximise their chances of bouncing back post-pandemic, we’re encouraging them to plan further ahead.
I wouldn’t normally be mentioning Christmas to customers in the middle of June, but this year it would be irresponsible not to. Why start preparing for the post-pandemic world now? Quite simply because the UK parcels sector will not have limitless next-day capacity in the November-December peak.
To help maintain retailers’ margins, parcel carriers have learned to run very lean operations in the UK’s ‘just in time’ supply chain. And although we can recruit extra drivers and add new vehicles easily enough, we can’t magic up extra hubs and depots overnight.
Normally we ask our customers to nail down their festive volume forecasts by the end of September. But as I write this on Wednesday 10 June, there are just 122 working days until Black Friday (27 November). That has focused our minds on planning further ahead than usual and this year we want those forecasts locked and loaded by the end of July, so that customers can be sure of having enough space in our network.
Trust – an invisible but crucial commodity
None of us knows how retail will look a year from now, but one thing is certain: whether people return to the high street or stick with online, trust in the consumer journey will be the most crucial factor.
It’s the invisible commodity that we all depend on. It’s only because new silver surfers are learning to trust the online experience – from browsing to ordering to delivery (not to mention returns) – that they’ve now become repeat customers.
In-store meanwhile, a whole load of other factors will affect trust levels. For example, due to fears of contamination, people will probably feel much less comfortable about trying on and buying shoes in a confined space than about buying plumbing materials from a big DIY store.
However things pan out post-pandemic, DPD will be closely monitoring retail trends and buying behaviour both at home and abroad, so I look forward to sharing further updates as to how we’re preparing for a post-pandemic world with you as we emerge together from these challenging times.