According to the e-Commerce Market Outlook 2020-2030, the global e-commerce market will increase from $1.8 trillion in 2019 to about $2.4 trillion in 2020. Online sales have jumped around the world this spring due to the COVID-19 outbreak when the physical stores got closed. In the third week of March 2020, e-commerce sales in the United Stated were 58% higher than over the same period last year.
The rise in online shopping was challenging for retailers. They were not able to process all the orders, deliver parcels on time, promptly react to customers’ negative feedback, and transform their business models when needed. Only those market players who were able to adapt to the new circumstances could benefit.
Surviving in the COVID-19 times
While airlines, fashion, catering, entertainment, and other businesses were adversely affected by the pandemic and lockdown, online retailers and delivery companies got new opportunities for growth and profit-making. Now, when the lockdown is already over in many countries, people still don't hasten to visit brick-and-mortar stores not to get infected with the coronavirus. Since scientists and doctors predict the second wave of COVID-19, the delivery services will be still in high demand in the coming months.
The market cap of SF Holding, one of the largest logistics service providers in China, has grown by almost 50% since the beginning of the pandemic. Its business is almost entirely built on e-commerce, which helped the company increase the delivery volume by more than 40% in January 2020. Instacart, an American company involved in grocery delivery services, managed to increase its sales by 450% compared to December 2019.
The workload on logistics, warehouse processes, and customer service have risen exponentially. The pandemic has changed consumer behavior as well. Before the coronavirus, customers preferred to pick up parcels personally. With the introduction of the self-isolation regime, the demand for courier delivery has gone up by 10%.
Online retailers and delivery companies did not have enough time and resources to prepare and cope with the surge in sales. While delivery businesses solved the issues related to the doubled freight traffic and the lack of staff, millions of parcels accumulated in the warehouses. Due to the canceled flights, delivery companies failed to deliver the parcels on time. As a result, they received tons of negative feedback from their customers.
The delivery quality, speed, and pleasant prices were the retailers' strong points before the COVID-19 outbreak. Clients generally don't care how the dispatch services are organized, they simply want to receive their purchase as soon as possible.
Capgemini Research Institute surveyed almost 3,000 people in Europe and the United States. It was revealed that the index of customer dissatisfaction with delivery services in France was twice lower than in other European countries and three-fold lower than in the USA. In general, 59% of respondents were not pleased with the high delivery cost, 45% – with the impossibility to get their order the next day, 45% – with delivery delays. To win customers’ loyalty back and save their reputation, retailers hired more couriers and hotline staff.
Being unprepared for the pandemic
Even Amazon, a US delivery giant with streamlined processes, was unable to cope with the surge of orders caused by the coronavirus. Overwhelmed operations forced the company to dampen demand and slow down supplies – from a few days to almost a month. According to the data provided by Rakuten Intelligence, a market research firm, the retailer's market share has fallen by 8%. Before the pandemic, the orders to Amazon occupied around 42% of online spending in the USA. Its share has dropped to 34% by mid-April because people were dissatisfied with shipping delays.
To recapture the customers, the company hired 75,000 warehouse workers, and took new safety measures in the warehouses. Thus, they coped with the increased delivery orders. Such delivery companies as JD.com and Alibaba also actively employed people from other sectors who lost their jobs due to COVID-19. Instacart announced that they would hire 300,000 workers, Walmart – 150,000, Domino’s Pizza – 10,000.
Taking care of your employees
At the time of the coronavirus pandemic (it’s still not over in all the countries, and the second wave is predicted), the couriers risk getting infected as they move around the cities delivering parcels to dozens of consumers per day. Since people can be asymptomatic COVID-19 carriers, couriers may not be aware that they are infected. Similarly, consumers are afraid of catching the virus from delivery workers.
In response to these concerns, delivery companies have introduced a contactless delivery. In addition, they’ve equipped their employees with masks, gloves, and antiseptic agents, and started monitoring their health state regularly.
The COVID-19 pandemic has proved that the personnel's health is the most important resource in any company. In developed countries, healthcare management is one of the most powerful approaches available for employers to reduce costs and increase their employees' KPIs.
Cornwall University calculated that a company loses $180 billion annually in the United States because of sick leave certificates. 20 years ago, large international companies got tired of spending money on the employees’ treatment, and required their HR departments to implement healthcare management principles into the corporate structure. 7 years after the introduction of healthcare management programs, the labor losses of the top 100 American companies decreased from 7-8 days to 3-5 days per employee.
The international experience shows that duly organized health management can reduce the disease incidence by 40-50%, decrease the number of sick leaves by 20%, increase the detection of chronic diseases by 10-15% and, as a result, reduce the average period of temporary disability by 30%. Bupa, a British insurance company, revealed that the productivity of healthy people is 20% higher, and their high productivity allows the companies to earn extra hundreds of millions of dollars.
Healthcare management should become a full-fledged corporate system. If it was a part of personnel management services earlier, large companies would begin establishing independent departments with a wide range of functions for this purpose. Healthcare management includes additional health insurance, corporate psychological counseling, gym classes, stress management programs, and more.
Now, companies encourage their employees to take care of their health. According to the World Health Organization, 2/3 of Europeans are not active enough. The share of deaths associated with a sedentary lifestyle is 10% in the total mortality rate. Poor diet, lack of physical activity, and smoking cause up to 80% of all the cases of premature development of coronary heart disease. A range of businesses offer bonuses to those employees who get rid of smoking, and lead a healthy lifestyle.
A tool helping delivery companies look after their staff
The pandemic proves that every human life is invaluable. A company needs a healthy employee, while an employee needs a job. But how can employers take care of their employees’ health?
There is an easy-to-use solution we offer – a Healthcare Dashboard for Delivery Companies allowing for monitoring the health state of a company’s employees and measuring their performance. This dashboard can help companies increase their operational efficiency and revenues. The solution we’ve developed consists of 3 modules:
- A dashboard providing the information about the employees' current health condition, rate of diseases, etc.
- An analytics section containing disease reports and allowing for monitoring the employee's health state statistics, analyzing the cost-effectiveness of implemented Wellness programs, and more.
- A section with the information on the employees providing for a better understanding of the staff’s health condition to properly manage their workload, and displaying health rate, history of diseases, and other health metrics.
On the final note
E-commerce is currently the main market driver. Growing online sales result in high demand for express deliveries. The availability of delivery services is necessary for companies that are now considering online sales as the only way to save their business. It is clear that the pandemic has already changed the world, and these changes will hardly vanish.
Those who have never made orders online will appreciate the convenience an online shopping provides, and the share of online orders will become higher than it was before the crisis. It is obvious that the delivery services will be in demand after the pandemic, too. That's why the companies engaged in this business should take care of their employees right now to be prepared for any unexpected situations in the future.
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