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Apr 07 2020

Game Changer Corona Crisis

Without digital distribution channels, non-food retailers are having an extremely difficult time in the current Corona crisis. The restrictions in public life will lead to a revival of e-commerce, especially in the long term.

While the business in food markets continues to be in full swing, a large part of the non-food shops, such as clothing and sports shops, electronics stores and furniture stores, in some places DIY and garden centres, have had to close their doors indefinitely.  "Retailers who already operate multichannel channels can now shift sales to e-commerce," explains Nils Zündorf, e-commerce expert at the agency faktor-a. On the other hand, those who do not yet operate their own online shop or do not offer their products via platforms such as Amazon or eBay have no possibility to sell goods at the moment. According to the German Trade Association (HDE), this still applies to around two-thirds of stores in Germany, including mainly small shops and boutiques. Store closures no longer mean revenue for them – despite ongoing costs.

In principle, sales have been increasingly shifting to the network for several years. In some cases, the large stationary retail companies are already generating significant sales through the digital sales route – especially in the consumer goods sector. The online share of consumer electronics was already 31 percent in 2018, while a quarter of fashion and accessories and leisure goods were ordered via the internet (source: Handelsverband Deutschland).

Breaking up the habitual shopping behaviour

However, trade in the network is not completely spared from the effects of the Coronavirus. In the short term, there will be logistical problems and supply bottlenecks in some areas, especially in the case of cross-border deliveries of goods. Nevertheless, the trend towards digital distribution is likely to be further exacerbated by the virus situation and, above all, to a change in consumption in the long term.

Since there have recently been delivery difficulties in stationary trade for products in high demand such as durable foods, disinfectants or toilet paper, access to e-commerce resources has also increased here. Before the crisis began, many people were sceptical about ordering fresh food online. This picture has since changed dramatically. The largest German e-commerce operator for fresh food is Rewe. The retail chain is now experiencing a real boom: "In online retailing, we are noticing a significant increase in order intensity," a Rewe spokesman told the news magazine WELT. 

For fear of contagion, more and more people are avoiding the public, especially members of the risk group. When shopping online, the danger is minimal, which is why those who previously preferred to do their shopping locally are now becoming increasingly aware of e-commerce services. "The uncertainties surrounding the novel coronavirus are breaking up habitual shopping behaviour to a great extent and putting online food retailing in a more attractive, new light for many consumers*," explains Dr. Eva Stüber from the Cologne IFH Institute in a press release. Longer delivery times, due to the high demand, are also accepted for this. Online trade thus has a "very central supply function", emphasizes the digital association Bitkom. 

Post-crisis change

Man is a creature of habit: Practiced behaviours are no longer discarded and so the trend of "we order online" will probably continue even when normality has returned. The current situation means that everyone has to sort themselves out and realign their distribution channels. The real change will therefore only take place after the crisis and will lead to a revival of e-commerce in the long term. 

 

 

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