Is there a person among us that can recall a month in their lifetime that was more turbulent, both globally and in their business, than the month we’ve just exited? When we look back on March 2020, it will easily knock September 2008 into a cocked hat, to use a rather antiquated phrase. It seems like all the colourful words we typically use to describe eventful happenings – tumultuous, unprecedented, carnage, turmoil – for the first time seem entirely apt and not at all exaggerated in the current climate.
As we stumble into April, then, we thought that in this post it would be useful to review the rollercoaster month of March as reflected by ecommerce activity across the Volo Origin platform.
This activity is across marketplaces and web stores, and for comparison purposes we’ve taken a ‘same set’ group of established customers, so we can attribute as much of the change as possible to the ‘Covid-19’ effect.
The figures are illuminating. January 2020 was up 5.3% on January 2019, and February was the same, after allowing for the extra leap year day this year. March 2020 was up 55% on March 2019, or more than half as much again for the same set of established customers. If we confine our analysis to the second half of March 2020 to the same period in 2019, it was up a staggering 91%. The second half of March pivoted from ‘business as usual’ to ’emergency online buying’.
When you look at March 2020 week by week, you can see the immediate and directly attributable effects of staying and working at home:
Perhaps your own figures bear this out. It’s certainly a proxy for the whole of the UK experiencing a seismic shift, as evidenced by this survey of 1,000 consumers by Internet Retailing dated 25th March.
Sellers everywhere are experiencing very different fortunes depending on the category they serve. As you can imagine, any category which services the day-to-day needs of people or families confined to their house or apartment and garden is doing very well. The categories that don’t, aren’t. Home exercise and sports equipment is doing very well, and how long that remains the case will depend strongly on a supply chain which might need a minimum of 8 weeks to literally ship product.
A related and vexing challenge is procurement. With stock selling out and increased demand due to the various degrees of lockdown, do sellers take the risk and increase orders on popular SKUs to suppliers, only for lockdown to be lifted? Or, worse still, if the situation descends into full lockdown, they might not able to sell the stock at all and have their cash tied up in stock.
For one thing, if we look at countries that are further ahead of the coronavirus curve than the UK, it appears that a degree of lockdown is going to last longer than the immediate term, and national governments are easing us into this prolonged situation and managing our expectations. Secondly, people are still going to need to buy essential category items.
Some sellers have decided up close up shop for a while, perhaps for good, depending on their financial situation and their medium-to-long term view. We’ve been making sure that our customers who are trading know we’re there for them, while at the same time publishing links for how to put businesses into vacation or holiday mood for those sellers who feel economically or morally obliged to hit pause.
Receiving a surge in orders is one thing, servicing the surge is entirely another. With Amazon changing its restrictions on FBA regularly, global marketplaces relaxing delivery standards and protecting seller statuses, and many other shippers doing the same, the floor is constantly moving for ecommerce retailers.
What do we advise? Well, that depends on whether you’re crazy busy or crazy quiet. If you’re servicing an upswing in demand you probably won’t have time to carry out detailed research on your performance. You should, however, make sure you’re ahead of all the government guidelines on working and social practices for your staff. You should also look carefully at your supply chain for the fast-selling items and do what you can to shore up the supply for the foreseeable future.
This time will pass, eventually, and when it does business will have changed forever, yet we’ll also go back to being preoccupied with things like Brexit.
If you’d like to discuss March 2020 and where you go from here, we encourage you to get in touch here.