COVID-19 thrusts online grocers into the spotlight
The COVID-19 pandemic has catapulted grocery ecommerce to a new level that UK supermarkets are struggling to cope with, writes eMarketer analyst Karin von Abrams
Online grocers are being swamped with orders but their websites are having a tough time coping with the surge in demand. For example, the UK’s leading online-only supermarket Ocado saw its website and app crash multiple times on March 13 while some customers who managed to place orders found that they couldn’t book a delivery sooner than a week away.
Several tumultuous days later, the firm temporarily suspended access to Ocado.com and refused all new orders to concentrate on work behind the scenes.
A March 19 statement confirmed that the grocer is "fully booked and at full capacity, and will be delivering to over 170,000 households in the next four days.” As of March 20, Ocado site visitors were greeted with an update: “The website is currently only available for customers with a delivery booked for this Saturday and Sunday.”
Backroom staff weren’t just working to boost efficiency in order fulfillment. They were also addressing the issue of panic buying evident online and in-store. A mid-March Ipsos MORI survey of adults in Great Britain found that more than 40% were buying more supermarket items than they normally would.
“The decision to close was not because we could not cope,” Ocado’s finance director, Duncan Tatton-Brown, told The Guardian. “The website closed so we could make changes to the code that supports it to enable us to share our capacity in a more fair and accessible way. You can imagine some people are ordering a much larger basket, and it’s only right for us to consider a fairer allocation. We need to find a way to make it fairer.” Ocado has already capped individual consumer orders to about 500 products, but that list is likely to grow.
On that front, UK online stores are facing the same problems as supermarkets generally: Can supplies of groceries and other key products be sustained? While producers and retailers have assured that fresh and preserved food, toilet paper, household disinfectants and other key items will not run out if consumers buy responsibly, not all shoppers are heeding that advice.
The shift to online food buying is also propelling new market entrants into the limelight. This can be a mixed blessing if customer numbers suddenly outstrip capacity. Oddbox, a small UK firm that provides selections of locally grown fruit and vegetables too irregular to be sold in supermarkets, has seen requests for its weekly deliveries skyrocket. As of March 23, its website too was closed to new business, but it promised to notify by email when service was restored.
Several restaurants now closed to in-person diners are moving online, too. Leon, a UK chain serving healthy fast food, planned to unveil a new ecommerce platform in late March, offering a “direct-to-home delivery service of chef-quality prepared meals.” Orders continue to be available for delivery via Deliveroo and Uber Eats. Leon's current online shop, which is separate from the upcoming ecommerce platform, sells a limited range of bottled goods like chili sauce and vegan mayonnaise.
As April approaches, it’s clear that the coronavirus will devastate many UK businesses. But online grocers have a better chance to weather the storm and prosper in its aftermath.