The numbers to back it up
According to FEVAD, 76% of e-commerce sites have recorded a drop in sales since March 15th, and for half of them, the drop is more than 50%. This probably alarming figure should definitely be put into perspective of the sectors concerned.
The start of an omnichannel e-commerce boom ?
According to the Nielsen Institute, e-commerce would have grown 4 times faster than physical stores by mid-March 2020.
The drive is one of the major beneficiaries (+30% vs. the previous year), especially among Ile-de-France residents (+45%). With 164 million euros gained, the drive even exceeds 7% of weekly market share for the first time, the report says.
Generally speaking, home delivery grew by more than 70% at the beginning of March (vs. N-1), particularly on hygiene products and non-perishable food.
What are the implications for omnichannel companies ?
The human element: companies need so-called “low added value” labour (order preparation, delivery personnel, etc.). Some giants, such as Amazon, offer to temporarily hire employees from companies in difficulty. Generally speaking, Jeff Bezos’ company needs manpower, and goes as far as increasing the hourly wage for this category of employees, who are also particularly exposed to risks despite the measures implemented in the various countries affected (secure selection process, distancing order delivery, widespread barrier gestures in warehouses, and more).
The technological side: A company’s capacity to adapt digitally is being put to the test. Omnichannel device efficiency is being scrutinized. Yet again, omnichannel companies can be subjected to unprecedented traffic overloads of their online sales, causing “bugs” and thus generating frustration and dissatisfaction.
The logistical factor: At the beginning of April, studies shows a decrease in efficiency, due in particular to:
longer delivery times (85% of websites)
or the closure of the traditional “relay points”, requiring home delivery services to be established for companies that were not particularly accustomed to them.
Certain companies are innovating and rethinking how they fonction, such as Leroy Merlin, which is betting on reopening drives: since March 24, a goods withdrawal service has been allowing consumers to remove basic necessities and emergency products from store parking lots, despite the fact that the stores remain closed. The e-shop is adjusted to the stock available at each point of sale, thus allowing the customer to see directly whether the product is available for collection via the drive of the store in question.
Focus on food
After the “rush” of week 1 on lockdown, the surge in food e-sales is returning to normal, but the level is still significantly higher than before the onset of the nationwide crisis.
In Ile de France, where more convenience stores remain easily open, the food e-trade figure is levelling off.
As in other sectors, delivery times are being extended considerably: firstly on the drive, which Leclerc benefits from while Carrefour misses out. While as well on the home delivery market, where Carrefour makes way for Amazon’s Prime Now delivery service.
The meal delivery market, which had been strongly impacted during the week (-50%), seems to be stabilizing.
Retailers alliance for smart delivery solutions
Many retailers in urban and crisis influenced areas are forming alliances with companies whose core business was initially focused on meal delivery to open up their business to the broader distribution market. One example is Uber Eats in Paris, which handles certain deliveries for Carrefour.
New Holy Grails ?
Some markets are in fact favored by confinement: video games are making strong progress, especially among Generation X (40-60 years old). As for Netflix subscriptions, their already high penetration rate skyrocketed 76% compared to pre-lockdown.
Not to mention the media sites whose traffic is exploding, and whose freemium content is driving traffic.
Which sectors are suffering the most ?
Fashion and home furnishings are being hit hard, as are the luxury goods sector and – of course – the travel sector. Some “historic” French brands (shoes, family holiday clubs, etc.) are making no secret of their concerns. The automobile industry has not been spared either.
E-commerce as the “magic key” back-up solution ?
E-commerce is also experiencing a new wave of activity with all kinds of websites emerging that correspond to brick and mortar brands, whether they are small convenience stores or historic shops. The ability to adapt quickly to these new channels can make all the difference, especially in terms of fresh goods.
A few figures…
85% of websites experience longer delivery times
29% of order cancellations
40% are experiencing supply difficulties
40% of companies do not think they will be able to withstand this situation economically for more than three months.
(Source : Fevad, a study of 136 e-commerce websites between march 23rd and march 25th 2020)
Laure Barillon, Altavia Nativ, et Thierry Strickler, Altavia Watch
Covid-19 : quel impact sur le e-commerce français?
Covid-19 : Les magasins de proximité et le e-commerce privilégiés