FEATURE STORAGE OPTIMISATION
MANAGING STOCK DURING E-COMMERCE BOOM
store sales” represented a third of all retail in Britain during May, up 19.7 per cent on April. Some of this increase was in food sales (11.3 per cent of total, up from 9.4 per cent in April) but bigger increases were seen elsewhere. Nearly half of all clothing, textile and footwear sales were non-store and 25.2 per cent higher than in April. Other sources suggest that in the week immediately following the lockdown announcement, online home and leisure retail increased by 200 per cent compared to the previous year and that this trend was maintained during April and May. It is not just online retailers who have
By Alex Mills, sales and marketing director at ProSKU
W
ith so many “high street” shops closed during the coronavirus
emergency it is little surprise that e- commerce businesses have seen something of a boom. Online retailers and delivery service providers have reported significant increases in demand since March. This has placed unprecedented pressure on supply chains – including stock control and warehouse management. The challenge is to ensure existing systems work or replace them with something that does. Cloud-based solutions could offer the fastest and simplest solution for many businesses. Customers turned to online in part
because they had no alternative. But many customers have also been reluctant to visit conventional stores. Research analyst Kantar reports that only half of shoppers feel safe when visiting a supermarket or convenience store. Kantar also found around one in five British households bought groceries online during May-June 2020, boosting home delivery volumes by over 90 per cent. Tesco recently reported that its online sales rose 48.5 per cent in the three months to the end of May, although sales at its established stores and convenience outlets also increased, by about a tenth.
12 SEPTEMBER 2020 | IRISH MANUFACTURING Smaller and independent stores have
seen the biggest gains: Kantar’s figures show these increased sales by 69 per cent in the three months after the mid- March lockdown. This growth is reflected by the experience of the Cheshire Cheese Company, a Macclesfield-based online retailer. Its turnover during the first three months of the lockdown exceeded its entire 2019 total. Orders grew to 600 a day. According to Simon Spurrell, the owner
of the Cheshire Cheese Company, there were two phases to this peak: “Initially there was a panic buy situation where people were bulk buying purely for hoarding. For example, we had a run on multi-buy six X cheese packs with a 1000 per cent increase of sales compared to the same period last year. Within six weeks of the lockdown and the approach of Easter this pattern changed to gift buying. This created a large increase in gift purchasing, delivered direct to a friend or relative. Growth in sales remained on average 240 per cent up on the previous year until the passing of Father’s day in June. The inability to purchase and gift personally made people search for an alternative way to deliver a present.” The UK Office for National Statistics (ONS) reported that what it calls “non-
seen a surge in business. Unsurprisingly, home delivery businesses have also seen growth. Hermes reported a 100 per cent year-on-year increase in volumes for its SME customers and was delivering around 700,000 parcels a week for those customers during June. DPD recently announced 6,000 new UK jobs and £200 million investment in infrastructure to cope with added volumes. As part of this it will create 15 new regional depots, ten more than originally planned for 2020. The company says parcel volumes have been more like festive seasonal peak - Easter volumes were double those of last year. ParcelHero forecasts that the closure of conventional businesses could drive a 95 per cent increase demand for new products discovered on social media compared with 2017. There have, of course, been some
high-profile retail casualties during the emergency. Research organisation Opinium and e-commerce consultancy LiveArea suggest 70 per cent of retailers have seen the drop in demand impact their business. The same research revealed retailers plan to respond by revising their supply chains after the pandemic: digital commerce (72 per cent) and IT infrastructure (60 per cent) were named as investment priorities. Many online retailers will have been
able to carry on throughout the emergency with little or no significant disruption to their business. But they will have had to cope with significant increases in volumes, perhaps for the first time. This not only imposes significant burdens on sales and order processing but creates significant challenges for the warehouse. Businesses that could cope with minimal stock
/ IRISHMANUFACTURING
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