The global outbreak of the Covid‐19 coronavirus brings with it much concern for businesses across all sectors. For retailers, the reality is that changes must be implemented and fast.
Many retail businesses have been forced to temporarily halt operations altogether, while those that are considered essential, such as supermarkets and pharmacies, face a host of new challenges to create a safe shopping environment for customers and staff. This includes keeping people physically apart as per the WHO recommendations, applying stringent disinfection measures and, for those ordering online and delivery drivers, implementing contactless deliveries.
Prior to lockdown, many online retailers might have thought that they would be able to remain operational and deliver their products via essential courier services. Couriers, however, are only permitted to deliver essential goods. As a result, people who sell non‐essential products online must find ways to promote their goods to encourage sales that can be delivered post‐lockdown. Retaining visibility through lockdown may well be key to continuing the flow of business and remaining operational in the long‐term.
That said, there are many factors with deeper roots that will impact the e‐commerce industry. The Covid19 pandemic is impacting world economies on many fronts. Both developed and developing countries are already seeing its effects.
In South Africa, the Rand has further lost value against major currencies, ratings agency Moody’s downgraded the country to “junk” status towards the end of March, and the cost of the country being in lockdown with only essential services remaining operational will only add to existing heavy strain on the country’s financial status.
What do these economic concerns mean for retailers specifically?
South Africa’s economy was already under pressure prior to this global economic crisis, with rolling blackouts severely impacting business confidence (now at its lowest in 21 years, according to FirstRand’s Rand Merchant Bank Unit and Stellenbosch University’s Bureau for Economic Research). On top of this, global investors are being cautious by moving their investments away from riskier markets and developing countries are thus facing incredible challenges to their economies.
The Rand dropping in value means that it becomes more expensive for importers to bring goods into the country. For businesses that source goods from China, there may also be difficulties owing to supply and stock shortages. China is, to an extent, getting back to business, but there will be supply chain bottlenecks that will ultimately affect the many world economies that rely heavily on the supply of goods coming from that country.
“For retailers and suppliers that have not stocked up from the Asian markets to be able to meet local demand, at least until the spread of this virus is contained, it’s going to be difficult to remain in business,” explains Michael Cilliers, After Sales Service Manager at online retailer Teljoy.
Even businesses that are fully stocked up may struggle to meet demand post‐lockdown until the supply chain is reestablished, Cilliers notes, and consumers must be mindful that there may be delays in the delivery of goods when business resumes.
“There is no way to predict something like this happening. Even businesses that manufacture locally may battle to meet demand after lockdown. Teljoy uses suppliers that have assembly plants in South Africa, but the reality is that these businesses are also not currently operational,” Cilliers says.
Teljoy CEO Jonathan Hurvitz adds: “Our business is affected despite many of the products we stock being procured locally. With suppliers being equally affected by lockdown, our business and many others will be impacted. Our team members are all home with their families throughout the nationwide lockdown. We have to change the way we do business to protect everyone.”
For Teljoy, this means that customers can continue to shop online at any time but deliveries, as well as maintenance and repairs on items already in customers' homes, will resume once the ban on non‐essential movement is lifted.
It’s clear that global lockdowns pose a challenge to many businesses. Hurvitz says innovation will be needed for retailers, big and small, to survive.
“It may take some time to get back to business as usual. There will be a lot of work that needs to be done. Even with non‐essential businesses being allowed to operate after lockdown, it is likely that we will still have to do things differently. Social distancing will still be in place until the threat of Covid‐19 has been significantly minimised,” says Hurvitz.
“We encourage consumers to continue shopping online to help all local businesses through these trying times.”