It is not too soon to say the Coronavirus global pandemic will likely be one of the defining events in 2020, and that it will have implications that last well into the decade.
Although the COVID-19 situation is rapidly changing, one of the responses has been a change in shopping behaviours. From online shopping to bulk-buying, consumers are changing how and when they buy goods. As countries, states and cities continue to be locked down, nonessential businesses are being ordered to remain closed, and consumers are avoiding public places. Shopping malls across the world are empty as limited shopping for all but necessities become the new normal. Companies are now having to adapt and be flexible to meet the changing needs of consumers who are shifting to online shopping only.
While this is good for business, it can put a strain on companies who are already trying to juggle other order fulfillment challenges. From increasing customer expectations to warehouse issues to even global pandemics and other crises, e-retailers are looking for a solution that can combat all the above. But before they do that, e-retailers must understand the challenges in order to find a solution that fits them all.
Richard Nijboer, Director of Sales and Operations at Sparck Technologies
Local stores moving their business online have a fair chance of taking a share of all online sales next to large e-retailers, as people are more aware that we have become heavily dependent on countries like China for our goods. They are willing to support local online initiatives for local products. The COVID-19 crisis has made local offline stores aware of the digital possibilities as well, and we see all kinds of creative online solutions popping up.
The shift to online sales worldwide
As consumers are making buying choices based on the new and quickly changing global and local circumstances, the product categories that are being purchased aren’t just necessities, but also household items, games, crafting goods and consumer electronics. Consumers are adapting to life at home and want to make it easier and more comfortable.
Large retailers with omni-channel strategies are also adapting. De Bijenkorf, an offline and online retailer in the Netherlands, closed its stores and shifted their sales promotions to focus primarily online. In addition, home delivery specialists in the UK expect e-commerce purchases are likely to increase to 40% of all purchases, doubling the e-commerce share of 20% in 2019. Bas van Steenoven, global director of Marketing at Packaging by Quadient, sees customers of the CVP Automated Packaging Solution producing boxes at rates that are comparable or even higher than Black Friday 2019.
Between February and March 2020, online sales in Italy grew significantly compared to the same period in 2019. Particularly, the e-commerce sector was largely impacted by the initial outbreak of coronavirus (COVID-19) On March 8, online sales registered an increase by 90 percent compared to the same period of the previous year.
Not all e-commerce stores have experienced increasing online order numbers. According to Richard Nijboer, director of Sales and Operations at Packaging by Quadient, most CVP Automated Packaging Solutions customers are still fully operational and doing similar or even higher volumes than normal, while some have been hit hard and seen their volumes dropped drastically or even a hold on production. Statistics show this diversity of impact depends on the retailer’s industry and relevance to the current health crisis.
But one thing is clear. COVID-19 has impacted many retail businesses worldwide and they all have to adapt to the new situation. But will the impact be temporary or is it likely to have lasting effects?
Consumer purchasing responses and the consequences
Although the response to COVID-19 hasn’t been universally felt across all industries, a likely sudden shift to online sales will have a sustained impact on purchasing behaviour and help accelerate the development and growth of online sales worldwide.
The impact of SARS (Severe Acute Respiratory Syndrome) in China back in the 2002 caused a rapid movement from traditional store-based selling to digitalization of retail through omni-channel. The SARS virus forced JD.com to begin selling their products online in 2004. As a result, today, they are the largest online retailer in China with a network in more than 70 countries.
Bas van Steenoven, Global Director of Marketing at Sparck Technologies
We see our customers producing boxes at rates that compare with black Friday or even above.
Nowadays, many online retailers worldwide were not prepared for the sudden shift to online purchasing and recurrently facing many consequences due to the COVID-19 pandemic. In Germany, almost 60 percent of the e-retailers are burdened by delays in delivery of their goods. Increased orders coupled with a high number of unavailable or sick labour resources have caused delivery times to rise, leaving customers wondering when their goods will arrive. We expect consequences for other e-commerce companies worldwide to be similar to those in Germany.
Labour not being available has a big impact on delivery times being met. These impacts have been felt ever harder in Europe, as many East-Europeans normally doing seasonal work in West-Europe have gone home and can’t return to their seasonal jobs. Because of COVID-19, the fulfillment sector could face a dramatic shortfall in seasonal workers as a consequence of border restrictions put in place to stem the spread of Coronavirus. Also, a longer period of uncertainty and quarantine can cause unrest among employees, similar to what Amazon is facing. Workers at Amazon are demanding shutdowns of warehouses for fear of contracting the virus from coworkers. On time and sufficient labour availability will be one of the biggest challenges for the e-fulfillment industry worldwide in the short term. Even if there are enough workers available, how do companies respect social distancing recommendations without losing productivity, especially in the packaging area which is typically a bottleneck?
That being said, we are all living in a period of flux. While experts predict we are facing a longer period of social distancing, we don’t really know if the virus has a seasonal pattern similar to that of the flu or a viable vaccine that can be available on a large scale before 2022.
As companies try their best to adapt to these strange times, online and offline retailers are urged to act now and prepare for future or sudden peaks in online purchasing. E-commerce retailers of all sizes have to consider their online sales capability, consult with their logistics teams and partner with their courier networks to be prepared for a significant jump in home deliveries.
Adapting to a new situation with automated packaging
But how can this be done? Automation is a great place to start. Automating the crucial parts of the supply chain gives retailers the ability to upsize or downsize order processing capacity when necessary without additional costs.
The packaging area is one of the most labour-intensive parts of the fulfillment process. In addition, with the 1.5 meter social distancing rule, the situation gets even more difficult. In many warehouses there are not enough packing workstations to keep up with order throughput. The case for automated packaging is solid, especially when faced with trying to support your customers’ needs along with the needs of your own employees.
Richard Nijboer, Director of Sales and Operations at Sparck Technologies
One of our customers told me they have peak days near 2.000 boxes per day. Office staff is now helping production with picking orders on those peak days. They are really happy to have a CVP for the packaging of all orders. It was definitely not possible to achieve with their previous packing organization.
Solve the packaging bottleneck with the two CVP Automated Packaging Solutions from Packaging by Quadient. The CVP Impack packs up to 500 parcels per hour requiring only one operator while the CVP Everest auto-packs 1,100+ parcels per hour and uses two operators. These solutions are game changers as they offer 50% reduction in shipping volume, 29% reduction in corrugate usage and eliminate the need for void fillers, increasing your bottom line and ROI opportunities.
Customers of the CVP Automated Packaging Solutions have navigated the COVID-19 situation with ease and are prepared for future situations of sudden order increases. Don’t find yourself unprepared for the next shift in demand and explore the possibilities and benefits of a CVP Automated Packaging Solution.
Automated Packaging Power
Up to 500 boxes per hour
Up to 1,100 boxes per hour
- e27.co, How COVID-19 is changing traditional retail and e-commerce, Adrian Hartanto, March 11, 2020
- postandparcel.info, COVID-19 in the UK: E-commerce purchases could increase to 40% of all retail sales, March 5, 2020
- data Sparck Technologies