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While the giant classic stores are pronouncing big layoffs due to the pandemic, cutting thousands of employees, the coronavirus lockdowns have given e-commerce a major touch in contrast.
Recent knowledge shows a shift towards buying groceries online: according to consultancy group Kantar, foreign e-commerce has grown by 41% in just 3 months, up from 22% by 2020 as a total to date, as the pandemic “is transforming” retail habits.
The trend was highlighted on August 18, when the UK mainstay, Marks & Spencer, announced the reduction of 7,000 employees.
Hours later, by contrast, online giant Amazon said it would hire 3,500 in the United States.
The relief in the length of the M-S is just one component of the image in the UK, with 2,500 additional task clippings advertised at the Debenhams decomposition store, which entered management in April at the moment in a year. Hundreds more tasks will also be lost at other well-known British retail chains.
By contrast, Britain’s largest supermarket chain, Tesco, has put a significant pen on its online limit, saying it is creating 16,000 permanent jobs to cope with the expansion of its online business.
“It is very transparent that the digitization of commerce, (including) that has been in place for a long time, is accelerating tremendously,” said Herve Gilg, Managing Director and Distribution Specialist at Alvarez & Marsal Corporate Transformation Services.
Profits are made through corporations that already had a part of their business online.
This troop is heading through Amazon, which doubled its backline at the time of the virus this year.
Next is the German fashion and e-commerce lifestyle Zalando, which saw its active visitor base increase by 20% in the first part of 2020 to 34 million.
The American giant Walmart, while a natural online player, has also moved in this direction to take advantage of the recovery of virtual commerce in the United States and its quarterly effects skyrocketed after estimates of a 97% increase in sales electronic.
E-presence ‘essential’
In France, the UK, Spain and China, the average share of the e-commerce market has risen from 8.8% (in 2019) to 12.4% in the last quarter of 2020, Kantar said.
He adds that in China, grocery shopping already accounts for “a quarter of customers’ spending.”
The trend that was already underway before COVID-19 began to affect the global economy. But the sharp drop in out-of-home spending has had “a primary domino effect for non-food retail that relies on physical outlets,” Gilg said.
The unprecedented development has “made all retail actors understand or else confirm that it is indispensable to have an online presence and to be as competitive as possible there,” says Stephane Charveriat, senior associate director with the Boston Consulting Group (BCG).
‘Significant investments’
This has meant an evolution that “requires significant resources and investments,” notes Charveriat. But this need comes at a time when corporate coffers are bare and cash set aside for online purposes is cash, so it doesn’t move into physical business.
The business council of the CDCF in France requested the government this summer “tax credits or accelerate the mechanism of excessive depreciation to virtual investment.”
Finance Minister Bruno Le Maire responded on Thursday that “several hundred million euros” would be obtained in the form of grants and from public investment banks “to help corporations go digital” to compete with Amazon. .
“Obviously adopting large plate shapes is a big challenge,” says Charveriat. He says that French corporations want to outline a strategy, whether in the form of alliances with others, to compete in the virtual market with existing big hitters.
Still, Gilg says that the existing physical presence of retail logos can be a primary asset in this regard, for example in welcoming foreign tourists who possibly need to revel in what a logo should offer when touring. . -COVID ends up taking it again.
“Apple has shown very well how a store can act as a stage” for displaying its products, Gilg said, adding that while clicks are purchases, the retail mortar can provide the “authenticity” of the physical brand.