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31 Aug 2020
Food & Beverage post COVID-19
The COVID-19 crisis has put supply chain sustainability into the spotlight; it has exposed vulnerabilities across the business spectrum and put the value of sustainability into sharper focus than ever before. The impact of the pandemic has seen online grocery sales surge, growing 129% week-on-week in UK and Europe and expecting to add £5bn to UK e-commerce sales in 2020, totalling over £78bn.

At the same time consumers are expecting more from their online purchasing experience; a ‘want it now’ mindset prevails, which extends to customer service and the ability of retailers to resolve issues as quickly as possible. Increased digital behaviours during the pandemic will further accelerate pre-existing digital behaviours, especially when it comes to e-commerce and digital payments. 

It is clear that the pace of change of consumer habits shows no signs of abating, with more to come. As a result, businesses have to rebalance their store and online presences and, while local businesses are starting to go digital, for many it may be too late. 

According to research, 15% of UK online adults have purchased groceries online for the first time during the pandemic. For these digital newcomers, just over one-third (34%) say they will go on to purchase much more online in the future. This shift, plus the expected raft of store closures coming down the pipe, will force retailers to have to rely more on their digital presence. 

This throws an existing quandary into greater focus: how to redefine the role and number of stores a retailer has when overall growth was already driven by digital before the crisis. The surge in digital traffic and demand across key retail sectors during the pandemic gives a misleading impression that consumers will shift dramatically to buying online post-pandemic. In fact, 47% of UK online adults are hoping to return to normal shopping habits. 

Local dithering

There is also mixed news for local and smaller retailers. Thirty-eight per cent of UK online adults want to support affected local businesses during the pandemic. However, many local shops are just starting to digitise their business, and many will disappear due to the recession, says the report. The crisis will favour the largest retailers that can access cash and loans, have the scale and scope to offer cheaper prices, and have already pivoted to digital. 

Governments are trying to help, but cash flow is king, and some retailers in weaker positions have already gone into administration. 

Conscious consumers

Consumers will also increasingly care about the meaning and impact of their purchases and the values of the companies they engage with. As well as environmental and local community impact, how companies treat their employees during and after the pandemic will also feed into how consumers perceive a brand. 

For example, the UK supermarkets prioritising vulnerable customers for online home deliveries during lockdown and Morrison’s creating a hardship fund for employees needing financial support. Brands will need to consider the tone, added-value content, and authenticity of their communications and actions. More than ever, they should embrace the modern marketing mantra of being human, helpful, and handy. 

How can retailers adapt? 

Top of the list is the need to move beyond agility and become adaptive. In times of unprecedented change, firms must constantly evolve. The crisis will force businesses to step up the execution of strategic plans for digital customer experience and operational excellence.
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