Card image

The Covid-19 factor, how the distribution and delivery could look like for e-commerce businesses

With the world brought down to its knees by the Covid-19 virus, life has come to a standstill and businesses are hurting. In this state of quarantine, at a first glance it would seem that e-commerce businesses will be the ones making the most profit out of the pandemic as more and more people of all demographics are forced to shift to online purchasing with no other alternatives. A closer inspection of the situation would however, reveal that e-commerce businesses are posed with new challenges owing to the pandemic. The biggest challenge that e-commerce businesses are having a hard time to overcome is a disrupted supply chain as the pandemic rages on. The Covid-19 situation is and will be affecting the distribution and delivery operations of e-commerce businesses in the following 3 ways.

Shortage of Supply
Complete lockdown in many parts of the world has brought the retail industry to its knees. While a few firms such as popular apparel store J. Crew have undergone bankruptcy, other firms such as Nike, New Model, Kohl's and the TJX Firms shutdown at least 1,000 stores owing to COVID-19 situation. Even though a few retailers are still paying employees, many of them had to furlough their workers. To put things in perspective, owing to COVID-19 Macy’s Inc. had to shut down almost 840 stores and has been reported to have furloughed most of its 130,000 employees. As a result of all this, the world has shifted abruptly from brick and mortar stores to online shopping which includes high frequency purchases such as everyday groceries and pharmaceuticals. It goes without saying most e-commerce businesses don’t have the infrastructure to handle this kind of demand. Thus the businesses are likely to fall short of supplies if they haven’t already by now. And the businesses running out of supplies will have a hard time restocking since most suppliers have their operations at a halt.

Running behind in Deliveries
E-commerce businesses around the world are seeing record sales never before seen and will continue to do so. However, more sales equate to having to make more deliveries. With record sales, even big players in the field like Amazon and Walmart are having a hard time keeping up. Amazon has declared that they will be hiring 100,000 employees to be able to keep up with demand. They have pushed back delivery times for non-essential items. Retail giant Walmart is also facing similar problems. The total delivery system of these e-commerce giants has been stretched thin by COVID-19 and the numbers now are just astounding compared to what it was before.

Sooner or later most e-commerce businesses still operating now will have to face this. They will likely be forced to decide between hiring more employees to make deliveries on time or stop the sale of non-essential items for the time being to sustain with their current workforce.

Having to comply with state imposed safety laws that might disrupt business operations
With governments shutting down everything other than essential services to tackle the pandemic in many parts of the world, e-commerce businesses in these parts are facing the tough reality of having to shut down their supply chains entirely. For example, many e-commerce businesses like the ones in fashion apparels and sporting goods business might not fall under the essential service category whereby they are forced to shut down operations to comply with their local governments “Safer at Home” mandates. Such regulations could bring about drastic changes in supply chain operations for e-commerce businesses.

With the possible supply and demand conditions that lay ahead for e-commerce, it’s evident that the entire indsutry will take a hit and will need time to recuperate. While big businesses will probably survive anyways, small businesses will have a hard time staying afloat. To survive they need to come up with contingencies as to how to tackle the situation and act accordingly.