Growth in online shopping impacts supply chains

The Covid-19 lockdown saw many people either increase their use of online shopping or use e-commerce for the first time.

In effect, this created a new category of shopper – people who previously may have preferred or relied on physical stores to meet their retail needs.

McKinsey & Company, in consumer surveys conducted in South Africa, Europe and the US verify this trend, stating that it’s increasingly clear the pandemic has materially changed consumer behaviour, perhaps permanently. This has resulted in many retailers looking to alter their supply chains to compete in the new normal. The survey in South Africa took place between 18 to 29 September, in the US between November 9 and 13 and in Europe between 9 and 16 November.

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Shannon Wellcome, general manager for Bidvest International Logistics’ road-freight division said, “There certainly has been an increase in demand for our services over the last two quarters, dating back to the start of July, with a significant jump in demand for October and November months. I believe this is due to the easing of restrictions related to the national lockdown.”

Craig Lubbe, CEO of bidorbuy, South Africa’s leading online auction site and marketplace, said their experience was slightly different. “We went from exceptional lows in April 2020, to a dramatic surge in July. We’ve seen this increase gradually return to a more ‘normal’ pattern of expected year-over-year shopping behaviour.

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“With protocols which restricted the amount of employees physically present at a workplace, the company learnt to do more with less, in the process maximising output with minimal input. “This led to us partnering with more third-party service providers to increase our delivery footprint,” Wellcome added.

Lubbe is also seeing a pattern as new online shoppers became more comfortable with e-commerce – seeing its advantages in terms of safety, convenience and user experience.

“Consumers who in the past never shopped online, or did so only infrequently, have become regulars, and this new acquired behaviour is becoming entrenched,” Lubbe said. “Continued concerns over the safety of public spaces such as malls have also reinforced this trend, which we expect to see continuing in 2021 and beyond.”

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As people spend more time at home, demand for virtual and tangible entertainment products such as gaming and Spotify vouchers, and sports equipment such as indoor bike trainers continues to show excellent growth. “We’ve also seen impressive interest in our home and living categories, including small and large appliances. These categories have effectively doubled overnight, while music and instruments, as well as crafts, have also shown valuable increases in sales volume,” Lubbe added.

“As South African e-commerce shoppers and platforms become more sophisticated, we can expect to see returns options and subscription-based models move to the mainstream,” Lubbe concluded.

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