It was only a matter of time before online shopping overtook traditional retail.
Way back in 2017, when online shopping represented just 16% of overall retail spend, investment bank UBS was already making the bullish forecast that the ecommerce sector would deliver 15-20% annualised growth in the coming years. The COVID-19 pandemic has simply accelerated the inevitable, and while traditional retailers are now being allowed to open their doors to shoppers once more, there is unlikely to be a reversal of ecommerce’s meteoric rise. New consumer habits have been embedded; awareness of the virtues of online shopping are now widespread.
However, the pandemic has also left the retail sector at something of a crossroads, particularly with regards independent outlets. Consumers do not want to see local retailers go to the wall – 75% claim to be planning to support local merchants more regularly going forwards. But at the same time, if independent retailers are going to survive amidst a deep recession and challenging social distancing restrictions in store, they too must embrace ecommerce and develop a sustainable online presence for their businesses.
And what the pandemic has shown us is that while the move into ecommerce makes sense for SMEs across a wide variety of categories, the barriers to entry have been underestimated leaving thousands of small businesses struggling to fulfil orders and drowning in a flood of customer feedback.
Much has been made of Amazon’s decision to deprioritise third-party inbound at the start of the crisis, creating lead times of up to four weeks and – in many cases – causing customers to abandon their carts and shop around for alternative products. But rather than sticking the knife into the retail giant, Amazon’s move should serve as a cautionary tale for any small business about the perils of over-reliance on a single sales channel. More pertinently, it has a vested interest in protecting its core business; faced with a huge and unexpected spike in demand, coupled with a shortfall in delivery drivers, it’s hard to question the logic of its decision.
At the same time, several other third-party logistics businesses were caught unawares by the crisis and found themselves ill-prepared to meet the demand from small businesses. Many have been forced to turn down new business or close their doors entirely due to challenges remodelling their operations to be COVID-compliant.
Consumers have been admirably patient with online retailers throughout the lockdown. Many have accepted the unprecedented nature of the crisis and let retailers off the hook when items have not been dispatched in a timely manner. Similarly, some independent retailers have managed to survive by fulfilling deliveries themselves at a local level, ferrying goods around in their own cars while prevented from operating their physical stores as normal. Neither trend is sustainable in the longer term. Consumer expectations around online order fulfilment are already rising. Independent retailers will not be able to meet these expectations on their own.
The Micro-Hub Fulfilment Approach
At Huboo, we’ve built a third-party fulfilment business that is specifically designed to enable these retailers to thrive in the ecommerce sector. It’s a fulfilment model that allows SMEs to sell across multiple channels, as well as direct-to-consumer, and that gives every retailer high priority when it comes to the timely delivery of their goods. And it’s a model that today serves more than 300 retailers, on the back of 100% quarter-on-quarter growth over the past year.
Further, our micro-hub approach to warehousing has been social distancing compliant from the outset, while we’ve implemented a variety of further safety measures to keep our staff safe and secure in the workplace. As a consequence, at a time when other third-party providers have been closing their doors to independent retailers, we’ve been able to grow 50% month-on-month throughout the lockdown.
For years, the challenge of creating a sustainable online offering appeared insurmountable for many independent retailers. Today it is unavoidable, which is why it’s vital that these SMEs seek to form strong, lasting partnerships with trusted logistics providers such as ourselves. Ultimately, consumers want to see independent retail flourishing in the post-COVID world. By working together, we can deliver that reality.