Posted on April 23, 2020 by staff

Why eCommerce is the only winner from retail’s apocalypse


It’s been described as the retail sector’s apocalypse.

COVID-19 has already been blamed for retail giants like Debenhams, Laura Ashley, Oasis, Warehouse, BrightHouse and Cath Kidston going into administration and more seem certain to follow.

The extended lockdown has forced customers online – but what does COVID-19 mean for the eCommerce world in the short and long-term?

BusinessCloud’s executive editor Chris Maguire brought together eCommerce experts from as far away as Israel to take part in a Zoom roundtable to find out.

Alon Ghelber is the CMO of Israeli tech firm Revuze, which has built a machine-learning system to analyse customer opinion

“We’re seeing a huge shift in what consumers are saying. For example if we look at cosmetics we see some subjects are no longer discussed. People don’t talk about promotions but they do talk about long-lasting and moisterising. People care about how the product is performing. People are talking differently about product. The rate between sales and online reviewing is higher than ever. We speculate that people have more time to write a review. They care more about deliverability and service. Post COVID-19 new products will have to be introduced in a faster way to accelerate the change in consumer taste. We also expect brands to go direct to consumers and they’ll expect it faster than ever.”

Sam Eastwood is the founder of online business Street Solutions UK, which sells traffic products

“We made the decision to invest in advertising because there was going to be demand for anything that promoted social distancing, like traffic cones and barriers. We moved budgets around into areas that were going to be more beneficial and we’ve had quite a big take-up of that. Customers have done a Google search and we’ve been there first time, every time, providing a swift service. I think after COVID-19 you’re going to see companies with a large scale and cash reserves in the bank, look to swallow up smaller independents.”

Matt Mawdesley is the strategy and innovation lead at online electricals giant

“We’ve always based our business model on the assumption that online penetration will continue to increase. I’m generalising but the older generation are getting more used to shopping online. Post COVID-19 I think people will continue to expect things like next-day delivery and a lot of retailers are going to have to adjust their logistics model. There needs to be a lot of investment in UX.”

Jayne Riley is the head of creative content agency Seventy7 Group, which plans, creates, delivers and optimises content for retailers

“Had this hit us five years ago we wouldn’t be here now, that’s for sure. Diversification has, without doubt, saved us on so many fronts. In terms of discretionary spend, every one of us is holding back a little bit. In terms of our clients there was a real slowdown at the end of March and since Easter conversations have started back up again. There’s a real focus on how we’re going to come out of this. If you look at Primark they had sales of £650m in March and nothing in April. Surely they’ll have to accelerate their online presence. Post COVID-19 the retailers that engage with their customers and care for them will be the winners going forward. Independents have a large opportunity to get their messaging right and take market share.”

Hannah Barlow is the joint MD of multi-million pound turnover food wholesaler Dunsters Farm, in Bury. It pivoted its business to become eCommerce when COVID-19 struck

“We were a traditional wholesale business and we delivered the goods direct to the customers on our vehicles. We were pretty much a logistics company at the same time. We didn’t have any eCommerce. Then COVID-19 came along and we build an eCommerce platform in three days! Our sales team is working hard to shift stock. One of the big challenges we have is we have a 20,000 sq ft warehouse full of food. We know we had to move quickly. What we’ve realised is how important our supplier relationships have been.”

Gareth Monger is the operations manager at Bolton-based Ladderstore, which specialise in all things to do with working at height safely

“We’re heavily reliant on our suppliers still being active and being able to ship. In terms of life post COVID-19 I think eCommerce will continue to grow but there will be a different demographic to the traditional online user.”

David Herington is the CEO of Barrow-based eCommerce business Etail Systems which is offering ‘pop up online shops’ to SMEs during the pandemic

“People are staring over the precipice into eCommerce and there’s no going back once they’ve done it. We’ll see a lot more people coming out of this trading online. Small retailers can’t afford not to be doing this now. The other thing is the pace of change will accelerate even more. COVID-19 has opened people’s eyes to what can be achieved in a short period of time.”

Mike Blackburn is the managing director of digital marketing agency I-COM, which creates eCommerce platforms

“Consumers want to use adverts more than ever. It gives them reassurance. If the company is advertising it’s got stock and you can get the product to them. The other thing with eCommerce at the moment is every day is the same. For most eCommerce businesses you’d see dips on perhaps a Thursday or a Friday evening because they’re going out. Now every day is the same. There’s no peaks and troughs. Post COVID-19 I think we’ll continue to see the rise of the independents. This has been an opportunity for many independent brands to break out because a lot of big companies have stopped operating.

Nikki Hesford is the managing director of Hesford Media and an expert in digital PR, PPC and Facebook advertising

“I’ve been doing this for 12 years or so and I’ve never seen CPMs of £1-£2 since 2008/2010. CPM stands for ‘Cost Per Mile’ and is a marketing term to denote the price of 1,000 advertisement impressions on one webpage. The going rate is £6-£12 normally. At peak times like Black Friday and Christmas you’re going to be looking at £10-£15. At the moment CPMs are £1 even for high in demand audiences like children. I’ve got some tiny clients who are doing testers for £10 a day and they’re coming out at 2p-a-click. When I look at the analytics the bounce rate is tiny. I’ve never seen such cheap traffic and so much time being spent onsite. The number of people using eCommerce has expanded and will probably continue after the restrictions are lifted.”

Simon Wharton is director business strategy at award-winning eCommerce agency PushON

“You’re going to find a lot of businesses will take a step back out of fear. When others step back, you step forward and fill that gap. As an agency we’re seeing good opportunities. We’ll be recruiting coming out of this. I think we’ll see some really good talent out there. I think there’s an opportunity for anyone who thinks smartly. Post COVID-19 I think at board level they will have to give digital a full voice and innovate. I’m not a believer in the death of the high street but what we’re seeing is a reinvention of the high street.”

Ollie Hunt is the commercial director of Gene Commerce, which works exclusively with the Magento platform

“This is the biggest thing to happen to eCommerce. Across the board we’re seeing a big spike in conversion rates. It’s the only sales platform for merchants. When we come out of this the conversion rates will drop a bit but this is a change that is not going to stop. The UK eCommerce market is very mature but what’s going to happen in the less mature markets? Post COVID-19 I think we’re going to lose a lot of traditional retail businesses that have not had an eCommerce strategy. You’ll see eCommerce pushed to the top of the agenda for a lot of businesses.”