The Retail Bounce-Back: Preparing for a Post-Pandemic World

During my time as CEO at DPD UK,  and as UK plc was gradually emerging from lockdown, I asked our retailer customers how they were preparing for life in a post-pandemic world. How much of the old normal will their customers go back to?

How much trust was there in the consumer journey – both in-store and online? And of the new buying behaviours triggered by the pandemic, which ones would be temporary, and which were 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

Obviously DPD wanted the UK high street to survive and thrive again, not least because deliveries to store were a major proportion of pre-COVID B2B volumes.

The company hoped to see a string of innovations that made the in-store experience as engaging, safe and convenient as possible. But the fact is that during the last three months there has been a step change in the move to online shopping and a huge surge in B2C traffic – several commentators have said that e-commerce leapt forwards four years in just three months.

Perhaps the most dramatic stat, is that according to research consultancy Retail Economics, 45% of consumers bought something online for the first time that they’d only ever bought in-store before.

DPD data reflected the same story, because since the start of lockdown the company delivered to 500,000 addresses for the first time ever. Downloads of the DPD App – where individuals can manage their delivery preferences – grew 28% quicker than before lockdown, reaching a total of 7.3 million users.

The new online and mobile shoppers

There was definitely a segment of new ‘silver surfers’ who because of lockdown, became 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 were also available to buy with a simple swipe or a click of the mouse and they will arrive safely the next day on their doorstep. In a similar vein, online shoppers who previously bought only fashion and leisure items were 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, as consumers made 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, sending 300,000 parcels per week with the company.

It looks like people who used to buy six or seven days worth of food from the supermarket have replaced around a third of this with food subscription services. And if they’ve relished the new experience, why would they go back to the old way of doing things?

Preparing for a post-pandemic world – planning for the Christmas peak

Understandably, throughout the current crisis, retailers were 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 have encouraged them to plan further ahead.

I wouldn’t normally mention 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 early? 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 recruiting extra drivers and adding new vehicles is easy enough, carriers can’t magic up extra hubs and depots overnight.

Normally we would have asked 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 minds on planning further ahead than usual. If forecasts are locked and loaded by the end of July, customers can be sure of having enough space in the DPD 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.

Trust is 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.

Meanwhile, in-store, a whole load of other factors will affect trust levels. For example, because of contamination fears, 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 have to monitor retail trends and buying behaviour both at home and abroad.