30 Sep Coronavirus and our shopping habits
These are confusing and scary days. These days will change each of us as every major crisis does. I am in Italy with my wife. Our son is in Vermont (US) in a college dorm without knowing whether classes will re-start. My family is in Spain, with my parents being 90 and 82. I am trying to follow how the pandemic is evolving mostly in these three countries. I am observing that, despite the differences, people, politicians, and governs are acting quite similarly, even committing the same errors – understating the risks until evidence proves them wrong and then reacting a week or so late. It’s in human nature to hope for the best most of the time, probably a bit too much.
I hope that this situation will change us and that we will learn the lesson for the future. Most of us lived the crisis of 2008, and yet, 12 years later, unluckily, it’s clear that we did not learn much. This time we are talking about human lives in our cities, not on some other continent. The economic tsunami will be much bigger than then. I want to think that this time, we will learn some precious lessons.
This pandemic is not the first one, and for sure, it won’t be the last one. Only in this century, we have had at a global level: SARS (2002), H1N1 -swine flu (2009), MERS (2012), Ebola (2014), and Zika virus (2015). These are epidemics that extended globally. Besides, we had another 56 outbreaks around the world since the beginning of the XXI century. Measles, cholera, bubonic plague, dengue fever, and Ebola are the leading causes, but we already know that some other coronavirus will come back again sometime in the future.
What makes this pandemic different from the ones mentioned above is that this new coronavirus is much more contagious and has a higher mortality rate than others. This combination explains the reaction of the different governments to this pandemic, in comparison with, for example, the swine flu. Globalization and international travel, inherent to our economy, make this a reality we need to accept. For sure, globalization will take a hit. Before the pandemic, there were already many voices claiming the downsides of globalization. But we need not forget that the Bubonic Plague, called the Black Death, killed between 75 and 200 million people during the XIV century. We must establish systems to mitigate the next one. We can’t afford to be oblivious and pretend that this won’t happen again.
One evident outcome of this situation is that we are learning to live without many things that we considered we couldn’t. Others are indispensable, like groceries. At the moment of writing this post, it’s still too soon to know how it’ll evolve in the US. Some e-commerce sites are shutting off, adducing the need to protect workers. Others are waiving the minimum order requirements. During the first two weeks of confinement in Italy, we have seen a sales increment of 10% in supermarkets and 82,3% in e-commerce, according to data provided by Nielsen. In Spain, the first week of confinement, superstore sales grew of an astounding 71%, always according to Nielsen, and a study of marketplace Mentta shows that online food sales increased in the same period over 300% according to Foodretail. Many grocery chains had to admit not being able to manage the situation. Mercadona had to shut down its online shop momentarily. Others, including Amazon, are providing much longer delivery times. The online channel wasn’t ready for this sudden increment. Not in Italy, not in Spain.
Of course, this situation will normalize after the first weeks. And when things come to normality, there will be an initial period when we will want to be outside home as much as possible. We will go to restaurants, shopping and to do all the things that we can’t do right now. Anyhow, I believe that people will modify their shopping habits. This pandemic is showing us, that in countries like Italy and Spain, where e-commerce or click and collect systems aren’t as evolved as in the US, the purchase of everyday items has become trickier or slower in the best of cases. Some changes may happen soon.
This event could be the trigger for superstores chains to invest more decisively in e-commerce and in creating systems of click&collect. Another pandemic will arrive. The players that will have then a more robust e-commerce infrastructure, with a well-distributed click&collect system in their superstores, will be more ready to confront the next crisis. These click&collect systems may be similar to ATMs for picking your online order. Or they may be just smart lockers. Adding a system that allows disinfection could help to have a safer grocery system for the next pandemic. A curbside pickup system to help our elders will complement a system that was already growing nicely in the pre-pandemic era. Adopting these systems would be beneficial for business. It would show, at the same time, a necessary responsibility towards their customers and employees, who are having a heroic behavior during this crisis—the same heroic conduct as the people working in the health and logistics sectors.
Some thought about European malls. Here in Europe, malls are still functioning well, even growing. But corporations that run these malls should learn the lesson, looking at what is happening to malls in the US. A fierce competition of e-commerce and changes in customer habits may put at risk their business model. A possible solution for these corporations would be to provide the services that many of their tenants, the shops inside the mall may not have. Several of these shops are not from big chains or franchises. The mall corporation could offer services that allow them to sell online, to dispatch orders to deliver in-home in 30 minutes, 2 or 4 hours, and to provide the services of click&collect that we mentioned above. If the mall could offer these services, many shops could compete better with the e-commerce giant, Amazon, and give a much better experience to customers.
It is always a pleasant experience to walk the mall, shop, and enjoy some food. It would be a much better experience if we could do it without all the bags of different purchases, and we could pick them when we go to the car. Or to have delivered to home that same day. It would also be great to order online, even in several shops, and to pick the order up when we want, and at the moment we want, in one place. European malls are still in time to avoid obsolescence.