Matthew Robertson, Co-CEO, NetDespatch, discusses the multiple challenges for e-commerce and logistics operators during the global Covid-19 pandemic
As COVID-19 grips the nation and indeed countries around the globe, there is a degree of trepidation in the air with most of us locked down in our homes remote-working, apart from the essential key workers.
This has meant that many stores around the country have been forced to close and have seen their spring sales completely disrupted. However, where supermarkets and convenience stores are concerned, these have boomed, with Tesco reporting a 30% uplift in sales. We’ve also seen some real innovation across the industry, for example Morrisons creating pop-ups in hospital car parks to serve our amazing NHS workers.
Similar to what is happening in supermarkets online retail sales have risen dramatically in March, with a 74% growth in average transaction volumes compared with the same period last year, according to data from ACI Worldwide. The analysis, of hundreds of millions of transactions from global online retailers, demonstrates the extent to which people’s shopping habits have changed as a result of the COVID-19 crisis.
As you can imagine, this rise in eCommerce sales has been particularly profound in products related to staying indoors, such as home products and furnishings, DIY, electronics and garden essentials. Likewise, the food and beverage industry has seen a dramatic increase in online purchases. I know from my own experience that trying to get a slot for an online delivery with any of the major supermarkets has proved somewhat difficult with slots all taken for the next few weeks. Categories which witnessed a decline in transaction volume in this same period included ticketing by 60%, travel by 44%, and online dating by 8.9%. I guess if you are self-isolating you can’t really meet up with anyone new and with travel severely restricted that market was always going to experience a decline.
Having reached the Easter holidays, this quarantine is set to continue for the foreseeable future which will be tough on the retail stores, who might not be able to quickly convert in-store sales to online. Many have in fact closed their online operations as they simply don’t have the resources and manpower to run these from a logistics perspective.
To compound the above, any organisations that wish to take advantage of growing ecommerce opportunities also need to be mindful of the security landscape that this pandemic presents. In particular, the increase in online sales has led to an increase in fraud activity. According to Forter, the leader in ecommerce fraud prevention, fraudsters are exploiting confusion and uncertainty caused by government and corporate policies. As people adjust to working from home, Forter sees a marked increase in social engineering fraud, associated with fake emails purporting to be from HR and corporate addresses. Here fraudsters invite people to click for more information, instead taking victims to malicious sites.
Likewise, with a shift to online shopping in apparel and accessories, Forter sees an increase in gift card purchases. While a higher number of legitimate buyers usually means that fraud rates drop, gift card fraud rates have not. Fraudsters have noticed an increased demand for the completely virtual merchandise that is easy to monetise.
The COVID-19 pandemic is also putting pressure on deliveries and local logistics. I have heard some talk in the industry about the possibility of autonomous vehicles (AVs) helping to alleviate the strain on existing delivery services while reducing the risk of exposure for citizens. However, there are significant regulatory hurdles to overcome before AVs can be deployed at scale.
The World Economic Forum recently published a report on “The Future of the Last-Mile Ecosystem,” where it anticipates that demand for e-commerce delivery will result in 36% more delivery vehicles in inner cities by 2030. Again, COVID-19 has caused a huge increase in demand, as people around the world are self-isolating, quarantining or working from home for extended periods, suddenly increasing the need for food, groceries, household items and even medical supplies to be delivered to the homes of millions of people. But using AVs for deliveries will require some work on the regulatory front.
Broadly speaking, in order to trial an automated vehicle designed to operate without an occupant on the public roads, the AV developer must petition the regulator to make an exemption from the existing vehicle safety standards, which require human-operable controls and mirrors, for example.
Although it may be too late to ease the burden attributed to the current pandemic, I would urge regulators to consider the opportunities to streamline these processes for the future while upholding standards for safety and look at a new generation of agile regulation. This will enable trials of these technologies to help maintain the delivery ecosystem in future difficult times.
Out of adversity, comes innovation, and I’ve certainly seen plenty of that in the last few weeks. Also, communities coming together and supporting each other as well as our NHS workers, who are doing a tremendous job. Unfortunately, I don’t think anyone knows how long this pandemic will continue but I am sure we will come out of this stronger as a result.
To everyone reading this article – keep safe.