MaxOptra MD, Sanjay Gandhi, comments on business and logistics in 2020 and beyond
I think it’s safe to say that 2020 wasn’t the year we all predicted.
The impact of COVID-19, business closures, and redundancies has been vast, all over the world.
Many businesses, and individuals, have been forced into seemingly impossible situations. Many have had to to think on their feet and act quickly to keep their business afloat.
However, figures from the British Retail Consortium (BRC) and accountancy firm KPMG indicated that a recovery is underway, with total retail sales increasing by 3.2% in July compared with the same month a year ago.
Food, furniture and homeware sales boomed as people ditched their usual summer holiday plans and increasingly invested in their homes. In a sign of shoppers returning to their previous habits, separate figures from Barclaycard also revealed a bounce-back in overall consumer spending.
This performance was underpinned by a continued surge in online purchases since the Covid-19 pandemic struck, with online non-food sales up by 42.4% in August 2020. This represented a slight dip compared to the three-month average of 44.2% but was substantially higher than the 12-month average of 22.9%.
Interestingly, Paul Martin, UK head of retail at KPMG gave the following quote:
“While social distancing restrictions have eased and our daily lives have started to return to a degree of normality, shoppers are still focussed on life at home for the most part. Online sales continue to remain prominent – accounting for over 40% – while food and home focussed categories like furniture, homewares and kitchen accessories remained among the strongest performers. With many of us continuing to work from home, sales of computing equipment soared too.”
So we have to ask, what does this mean for the future of businesses and retailers who offer delivery and logistics?
At MaxOptra, we work with over 1,000 customers in 7 different countries. We have heard about the vast and varying challenges that businesses are facing, and we’ve been doing our best to help them not only adapt to COVID-19, but also prepare for the future.
Here are my thoughts on what the future holds.
Businesses will target B2B and B2C
We’ve previously spoken about how many businesses are making the B2C pivot – changing their business model from selling to B2B audiences, to focus on B2C. This is due to many other businesses, such as offices, restaurants and hotels, being forced to close down. Instead businesses have had to sell to individuals, couples and families at their home.
However, this isn’t a trend we predict will change any time soon. With much of the UK still not returning to offices, and many businesses such as restaurants and hotels still seeing a decrease in footfall, the B2C market will continue to have dominance.
On a more positive note, businesses who have pivoted to sell to B2C are reaping the benefits of an expanded audience. Since they have put in place the strategy, systems and operations to supply to a B2C audience, they can now continue to offer their services, post-lockdown, to these new customers, alongside their regular B2B audience.
Our customer, Sambrook’s Brewery, are a fantastic example of this change in strategy. They have seen some positives come out of this situation, enjoying the fact they are now reaching a new audience, and one they plan on supporting long term.
eCommerce will continue to thrive
While retail sales have struggled, online sales are still remaining strong:
This is understandable, as more risk-averse customers are still avoiding regular trips to ‘bricks and mortar’ stores and restaurants. However, many businesses have acted fast, identifying ways to sell online and deliver to their new audiences.
This has sparked some creativity for many industries. Restaurants, for instance, are offering meals delivered. For example, grocery stores, such as our customers Delifresh and Bobtail Fruit, swiftly set up an ecommerce store and are now delivering fruit, veg, meats and other necessities to their customers’ homes.
With lockdown measures still remaining restrictive, and many individuals still hesitant to venture outside for their regular shopping, the increase in ecommerce shows no sign of slowing down.
In fact, as these businesses have made it so easy for customers to purchase online, this may become the preferred retail channel for many customers, long after lockdown.
Communication will be more important than ever
At MaxOptra, we’ve always been advocates for regular communication with customers. But with all of the current uncertainties surrounding business operations and delivery times, end-customers are understandably a little nervous, and at times a little impatient, when deliveries are late or seemingly go awol.
Luckily, this is a challenge that is easily remedied through regular email and SMS updates, keeping the end-customer in the loop regarding when their order has been dispatched, when it is likely to arrive, and when it is nearby.
By keeping the customer up to date from the very start, even if delivery times are longer than usual, the customer’s expectations are managed, and their minds put at ease.
Delivery processes will be streamlined
Given the nature of our business, it’s perhaps not surprising that we would identify delivery processes as a key prediction. However, with businesses changing their entire strategy and supporting entirely new audiences, now is the time to get systems and processes in order.
Afterall, a business can completely change their positioning and set up a new ecommerce website. But if their orders aren’t actually getting to the customer, the business will struggle to succeed
For many businesses, this will likely involve less reliance on drivers’ local knowledge, fixed routes, and manual, paper-based planning. Instead, we predict that businesses will move to a more automated, dynamic route model, using systems that utilise innovative algorithms to optimise their orders, routes, tracking, and even communication – with minimal manual input.
Not only will this lead to a much better experience for the end-customer, but it also frees up time for businesses to focus on strategy, positioning, and navigating a difficult climate.
Businesses will have to get ethical
Covid-19 has given many, both businesses and consumers, time to pause and reflect. This has resulted in some fantastic causes led by businesses. For example our customers Delifresh are delivering food parcels to NHS staff, and Pret Foundation are donating and delivering food to homeless shelters.
As lockdown has lifted, many individuals are still in need of support from others. Therefore we expect these good deeds to continue. This reinforces the need for businesses to streamline their processes, both in terms of delivery and general operations, to free up time and remain reactive to helping the community.
Another future key ethical consideration will be the environment. As businesses increase the amount of deliveries they can offer, they will also be looking to reduce the environmental impact that their vehicles make. This is why using systems to optimise routes; reducing the amount of miles and vehicles needed, will become invaluable.
How can your business prepare for the future?
At MaxOptra, we are regularly supporting businesses who are facing significant changes, whilst also preparing for an unknown future.
Our innovative software, alongside dedicated support and implementation, is helping businesses both large and small, B2B and B2C, deal with these challenges.
We have been supporting business to:
Proven to improve customer service, deliver daily savings, facilitate business growth and change management for big names such as Victoria Plum, Krispy Kreme, JCB, Delifresh, and Pret A Manger, we also pride ourselves in supplying innovative and cost-effective solutions to today’s distribution and service fleet operators running anything from five, to 1,000+ vehicles.
Get in touch if you are planning for the future, and would like support in implementing the best possible delivery and distribution service for your business.